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United States of America v. Cincinnati Insurance Company

August 11, 2011

UNITED STATES OF AMERICA, PLAINTIFF,
v.
CINCINNATI INSURANCE COMPANY, SHERRY HEUER, AND STEPHEN C. MATHER, DEFENDANTS.



The opinion of the court was delivered by: J. Phil Gilbert United States District Judge

MEMORANDUM AND ORDER

This matter coming before the Court on defendant Stephen C. Mather's motions to dismiss (Doc. 7) and for summary judgment (Doc. 19) and on the United States of America's motion for summary judgment (Doc. 11).

I.Background

This matter arose after defendants Mather and Sherry Heuer were in a car accident in late 2008. Mather was injured in the accident and, because he was an active duty United States Air Force ("USAF") officer, received medical care from Scott Air Force Base Medical Treatment Facility that is valued at $5,265.15. TRICARE, the health care coverage program for uniformed service members, also paid $10,732.24 to civilian health care treatment for Mather. Additionally, Mather was placed on convalescent leave from the Air Force, which was valued at $5,967.78.

In March 2009, the USAF sent notice to Heuer's insurer, defendant Cincinnati Insurance Company ("CIC"), that it was claiming payment for the reasonable value of Mather's medical care. It continued to notify CIC of the increasing value of its claim until it reached $21,965.17 on October 26, 2010. Also on that day, Mather's counsel Stephen R. Clark asked Medical Cost Reimbursement Program paralegal Susan Thompson to request a reduction of the USAF's lien. Thompson sent him a letter informing him that the USAF's claim against Heuer was independent of Mather's injury claim and that it could not be settled for less than the full amount without the United States' approval. The letter further outlined the information Clark would need to provide in writing before the United States would consider reducing its lien. Clark never responded to that letter.

In the meantime, in May 2010 Mather sued Heuer in state court, and in late 2010, CIC issued a check in the amount of $21,965.17 payable to Mather, Clark's law firm and the USAF as part of the settlement of that case. As part of the settlement agreement, Mather agreed to indemnify CIC if it was liable to the United States. On November 18, 2010, Clark mailed the USAF a "Petition to Adjudicate Liens" and filed it in the state court action the following day. The petition was not served on the designated USAF official, the United States Attorney General or the United States Attorney for the Southern District of Illinois. In a letter dated December 6, 2010, Thompson sent the court a letter stating that under the Federal Medical Care Recovery Act ("FMCRA"), 42 U.S.C. § 2651, the USAF has a right to recover medical expenses independent of Mather's right of recovery and that Clark did not represent the interests of the USAF. The court filed the letter on December 9, 2010. Notwithstanding the letter, on December 20, 2010, the court entered an order adjudicating liens on the $21,965.17 tendered by CIC, including the amount to be paid to the USAF. That order awarded $15,997.39 to the USAF attributable to medical care costs, less $5,332.46 in attorney's fees to Clark pursuant to the common fund doctrine, for a total award to the USAF in the amount of $10,664.93.

On February 22, 2011, the United States sued CIC, Mather and Heuer in federal court under the FMCRA for $21,965.17. Funds in that amount were deposited with the Court in May 2011. Mather now asks the Court to dismiss the United States' claim because he believes it seeks to relitigate in a federal district court the judgment adjudicating liens entered in state court, which he believes is forbidden by the Rooker-Feldman doctrine. The United States and Mather have also filed cross-motions for summary judgment. There are no material disputed facts, and the parties argue as to who is entitled to judgment as a matter of law.

II.Analysis

A. FMCRA

The FMCRA provides the United States a right to recover for medical care it provides to an injured person:

In any case in which the United States is authorized or required by law to furnish or pay for hospital, medical, surgical, or dental care and treatment . . . to a person who is injured . . . under circumstances creating a tort liability upon some third person . . . to pay damages therefor, the United States shall have a right to recover (independent of the rights of the injured or diseased person) from said third person, or that person's insurer, the reasonable value of the care and treatment so furnished, to be furnished, paid for, or to be paid for and shall, as to this right be subrogated to any right or claim that the injured or diseased person . . . has against such third person to the extent of the reasonable value of the care and treatment so furnished, to be furnished, paid for, or to be paid for.

42 U.S.C. § 2651(a). It also provides a right to recover the cost of paying an injured uniformed servicemember who is unable to perform his duties:

If a member of the uniformed services is injured . . . under circumstances creating a tort liability upon a third person . . . for damages for such injury or disease and the member is unable to perform the member's regular military duties as a result of the injury or disease, the United States shall have a right (independent of the rights of the member) to recover from the third person or an insurer of the third person, or both, the amount equal to the total amount of the pay that accrues and is to accrue to the member for the period for ...


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