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05/06/96 EDMUND AND SALVINA KLEM v. CLAUDIA ROONEY

May 6, 1996

EDMUND AND SALVINA KLEM, INDIVIDUALLY AND AS PARENTS AND NEXT FRIENDS OF ANDREW KLEM, A MINOR, PLAINTIFFS-APPELLEES,
v.
CLAUDIA ROONEY MANN, DEFENDANT-APPELLANT, HEALTH COST CONTROLS OF ILLINOIS, INC., INTERVENOR-APPELLANT, V. EDMUND AND SALVINA KLEM, INDIVIDUALLY AND AS PARENTS AND NEXT FRIENDS OF ANDREW KLEM, A MINOR, CLAUDIA ROONEY MANN AND EDMUND J. SCANLAN, LTD., RESPONDENTS-APPELLEES.



APPEAL FROM THE CIRCUIT COURT OF COOK COUNTY. HONORABLE JENNIFER DUNCAN-BRICE, JUDGE PRESIDING.

The Honorable Justice Wolfson delivered the opinion of the court: Buckley and Braden, JJ., concur.

The opinion of the court was delivered by: Wolfson

JUSTICE WOLFSON delivered the opinion of the court:

This case concerns a group health plan's attempt to recover some of the money it paid for medical expenses incurred by a six-year-old after he was hit by a car.

The trial judge, relying on a long-standing rule that subrogation liens against recoveries received by the estates of minors are invalid, found that the plan was not entitled to any recovery. We agree with that conclusion, but we disagree with the trial court's dismissal of the plan's amended intervening complaint against the minor's father.

FACTS

On April 24, 1990, six-year-old Andrew Klem (Andrew) was injured when he was hit by a car driven by Claudia Mann (Mann). Andrew's medical expenses of $26,739.37 were paid by the Anchor Organization for Health Maintenance (Anchor), a group health care plan sponsored by the City of Chicago. Andrew's father, Edmund Klem, was employed by the City.

Anchor was authorized by the plan to extend benefits to members injured in accidents caused by third parties. The subscription certificate, which is the contract of insurance, provided that a "Member/Beneficiary shall mean either a Subscriber or a Family Dependent."

The certificate had a reimbursement provision which read:

"Section 9.4: Right of Recovery from Third Party *** ANCHOR retains *** the right to be reimbursed in the event of a recovery from [third] parties. Therefore, the beneficiary or anyone acting on his or her behalf, agrees:

(a) to fully cooperate with ANCHOR in obtaining information about the loss and its cause;

(b) to notify ANCHOR of any claim for damages made on behalf of the beneficiary in connection with the loss;

(c) to include the amount of the benefits paid by ANCHOR on behalf of the beneficiary in any claim for damages made against other parties;

(d) that ANCHOR (i) shall have a lien on all sums recovered by or on behalf of the beneficiary in connection with the loss to the extent of its payments; and (ii) may give notice of that lien to any party who may have contributed to the loss; and

(e) to reimburse ANCHOR from any funds received from these other parties by or on behalf of the beneficiary whether received by settlement, judgment, or otherwise. *** If the funds from the other parties are received by settlement, the amount ANCHOR is to be reimbursed will be the lesser ...


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