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HEALTH COST CONTROLS v. ROGERS

August 30, 1994

HEALTH COST CONTROLS, Plaintiff,
v.
NICOLINA ROGERS and BRIAN ROGERS, Defendants.


Grady


The opinion of the court was delivered by: GRADY

The parties have filed cross-motions for summary judgment. For the reasons stated in this opinion, the court denies defendants' motion and grants summary judgment in favor of plaintiff.

 BACKGROUND

 This lawsuit seeks enforcement of the terms of an employee benefit plan regulated by the Employee Retirement Income Security Act of 1974, 29 U.S.C. ยง 1001 et seq. Plaintiff Health Cost Controls ("HCC") administers a self-funded health care plan ("the Plan") that was sponsored and maintained by the employer of defendant Nicolina Rogers ("Nicolina") at a time in 1990 when her son, defendant Brian Rogers ("Brian"), sustained injuries in a traffic accident. At the time of the September 21, 1990, accident, Brian was 15 years old and was eligible for medical benefits under the Plan. The parties do not dispute that the Plan paid $ 29,978.80 in medical benefits to Brian's health care providers. They do not dispute that Nicolina and Brian brought a negligence action in state court against the driver of the vehicle that struck Brian, and that the state court action was dismissed on October 22, 1992, as part of a $ 50,000.00 settlement with the driver and his insurer. The dispute concerns the purely legal question of whether the Plan is entitled to any reimbursement from the settlement monies received by either or both of the defendants.

 The Plan contained the following provisions concerning reimbursement:

 
(3.) RIGHT OF RECOVERY FROM THIRD PARTY
 
AHCP [HCC's assignor concerning the Plan rights] shall pay benefits for a Member's loss caused or contributed by the acts or omissions of others except to the extent otherwise excluded or limited by the Subscription Certificate. AHCP will, however, have the right to be reimbursed in the event of a recovery from the other parties. Therefore, the Member or anyone acting on his or her behalf agrees:
 
(A.) To fully cooperate with AHCP in obtaining information about the loss and its cause;
 
(B.) To notify AHCP of any claim for damages made on behalf of the Member in connection with the loss;
 
(C.) To include the amount of the benefits paid by AHCP on behalf of the Member in any claim for damages made against the other parties;
 
(D.) That AHCP:
 
(i.) shall have a lien on all sums recovered in connection with the loss to the extent of its own payments, and
 
(ii.) may give notice of that lien to any party who may have contributed to the loss;
 
(E.) To reimburse AHCP from any funds from these other parties, whether received by settlement, judgment or otherwise;
 
There will be a pro rata reduction in the amount AHCP is to ...

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