FILED April 25, 2022 released at 3:00 p.m. No. 20-0792 – Auto Club v. Jessica A. Moser EDYTHE NASH GAISER, CLERK SUPREME COURT OF APPEALS OF WEST VIRGINIA Armstead, Justice, dissenting:
I write separately in this matter because I believe the majority has
misinterpreted the term “incurred” in the insurance contract at issue in this case and such
interpretation may result in serious implications on the recovery of damages in this State.
Because I further believe that the majority’s decision opens the potential for windfall
damages and double recoveries, I respectfully dissent.
Here, Ms. Moser operated a car owned by Joshua Jandreau. Mr. Jandreau
was insured by an insurance policy issued by Auto Club. While operating Mr. Jandreau’s
car, Ms. Moser was involved in an accident where she suffered bodily injury. The
insurance policy included a Medical Payments Coverage (“MPC”) with a policy limit of
$5,000. She submitted a bill from Rankin Physical Therapy for $2,165 (the original billed
amount) to Auto Club for payment under the MPC. Auto Club denied payment and stated
that no balance was owed, and the “policy does not allow duplication of benefits.” Another
denial letter was sent, and Auto Club stated that since the bill was paid for in full by
Medicaid, Ms. Moser never “incurred” the bill. Ms. Moser then filed this action. Granting
Ms. Moser’s motion for summary judgment, the circuit court found in favor of Ms. Moser
and allowed her to recover damages that she never incurred. Ms. Moser never paid for any
amount of her physical therapy—the bill was written off, in part, and the remaining amount
1 was paid by Medicaid. As such, Ms. Moser was awarded money that was both (1) paid for
already; and/or (2) written off by Rankin Physical Therapy and not paid for by anyone.
The MPC provision in the insurance policy provides that Auto Club “will
pay reasonable medical expenses incurred for necessary medical and funeral services
because of bodily injury[.]” The word “incurred” is not defined in the policy, and this
lawsuit arose because of the parties’ dispute as to the meaning of this term. The majority
opinion simply finds that the term “incurred” is clear and unambiguous. In fact, the
majority opinion states that “[t]he typical consumer would understand that a medical
expense is incurred at the time the services are rendered.” I disagree. First of all, the term
is not defined in the insurance policy and is far from clear and unambiguous. Secondly,
because both parties put forth compelling arguments supporting their respective positions
as to the definition of “incurred.” I believe that this debate is evidence of the term’s
ambiguity.
To support its position that Ms. Moser deserved to be compensated, the
majority cites a general dictionary definition of “incur” as “to become liable or subject to,”
ignoring the fact that Ms. Moser never ultimately became “subject to” having to pay the
charges. Under the majority’s interpretation, “incurred” would include the total bill for the
medical treatment of the insured rather than the bill for which the insured is directly and
legally liable. In sum, the majority adopts a definition of “incurred” so broad that it does
not matter whether Ms. Moser was liable for the medical bill or not.
2 I view this case differently. First of all, it is clear that the charges a patient
ultimately becomes responsible to pay often vary substantially from those charges that
were noted at the time a patient is treated. For example, the patient usually receives an
explanation of benefits which shows the original amount billed. Then, the insurance
company and the provider will usually negotiate, and write off a portion of the bill. Next,
the insurance company pays for portion of the remaining amount—often times, the
insurance company will pay for most, or all, of the remaining bill. Finally, the patient is
held responsible for payment of the final amount once such amount is reduced by insurance
payments and other offsets. This is precisely what occurred in this case.
As mentioned above, Ms. Moser never paid for any medical bills out of
pocket—this payment was made by the insurance carrier. Because Ms. Moser never paid
for her medical bills, she has already been fully compensated. The decision of the circuit
court, as affirmed by the majority, affords Ms. Moser a double recovery—and this Court
has long disfavored double recoveries. In fact, it is the “preeminent public policy of this
state ... that the injured person be fully compensated for his or her damages[.]” State
Automobile Mut. Ins. Co. v. Youler, 183 W.Va. at 564, 396 S.E.2d at 745 (emphasis in
original). The mere fact that an insured has a variety of coverages available to compensate
him or her does not increase his or her damages. It is only when, by operation of a policy
provision, an insured’s available coverage results in less than “full compensation” that we
would need to consider awarding additional compensation.
3 Although in a slightly different context (i.e. underinsured coverage), this
Court has recognized that insurers providing underinsured motorist coverage are “liable
for the excess or uncompensated damages up to the underinsured motorist coverage
limits.” Youler, 183 W.Va. at 568, 396 S.E.2d at 749 (emphasis added). Quite simply, the
damages covered by the tortfeasor’s liability policy and the medical payments coverage do
not constitute “uncompensated” damages. Many other courts have also concluded that
uninsured and/or underinsured motorist coverage may be properly offset by medical
payments to prevent a double recovery. See Ostransky v. State Farm Ins. Co., 252 Neb.
833, 566 N.W.2d 399 (1997); Mid–Century Ins. Co. of Texas v. Kidd, 997 S.W.2d 265
(Tex.1999); Ellison v. California State Auto. Ass'n, 106 Nev. 601, 797 P.2d 975
(1990); Wing, 17 P.3d 783 (Alaska 2001); Rowzie, 556 F.3d 165 (4th Cir.2009)
(interpreting South Carolina statute); Welborn, 480 F.3d 685 (5th Cir.2007) (interpreting
Mississippi law); Miera v. Dairyland Ins. Co., 143 F.3d 1337 (10th Cir.1998) (applying
New Mexico law); Standard Mut. Ins. Co. v. Pleasants, 627 N.E.2d 1327
(Ind.App.1994); Barnes v. Allstate Ins. Co., 608 So.2d 1045 (La.App. 1992); Taxter v.
Safeco Insurance Co. of America, 44 Wash.App. 121, 721 P.2d 972 (1986); Yates v.
Dean, 244 Ga.App. 333, 535 S.E.2d 335 (2000); Kessler v. Shimp, 181 N.C.App. 753, 640
S.E.2d 822 (2007).
In this case, interpreting “incurred” as including only damages for which the
victim is actually liable does not undercompensate the victim or “short” them in any way.
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FILED April 25, 2022 released at 3:00 p.m. No. 20-0792 – Auto Club v. Jessica A. Moser EDYTHE NASH GAISER, CLERK SUPREME COURT OF APPEALS OF WEST VIRGINIA Armstead, Justice, dissenting:
I write separately in this matter because I believe the majority has
misinterpreted the term “incurred” in the insurance contract at issue in this case and such
interpretation may result in serious implications on the recovery of damages in this State.
Because I further believe that the majority’s decision opens the potential for windfall
damages and double recoveries, I respectfully dissent.
Here, Ms. Moser operated a car owned by Joshua Jandreau. Mr. Jandreau
was insured by an insurance policy issued by Auto Club. While operating Mr. Jandreau’s
car, Ms. Moser was involved in an accident where she suffered bodily injury. The
insurance policy included a Medical Payments Coverage (“MPC”) with a policy limit of
$5,000. She submitted a bill from Rankin Physical Therapy for $2,165 (the original billed
amount) to Auto Club for payment under the MPC. Auto Club denied payment and stated
that no balance was owed, and the “policy does not allow duplication of benefits.” Another
denial letter was sent, and Auto Club stated that since the bill was paid for in full by
Medicaid, Ms. Moser never “incurred” the bill. Ms. Moser then filed this action. Granting
Ms. Moser’s motion for summary judgment, the circuit court found in favor of Ms. Moser
and allowed her to recover damages that she never incurred. Ms. Moser never paid for any
amount of her physical therapy—the bill was written off, in part, and the remaining amount
1 was paid by Medicaid. As such, Ms. Moser was awarded money that was both (1) paid for
already; and/or (2) written off by Rankin Physical Therapy and not paid for by anyone.
The MPC provision in the insurance policy provides that Auto Club “will
pay reasonable medical expenses incurred for necessary medical and funeral services
because of bodily injury[.]” The word “incurred” is not defined in the policy, and this
lawsuit arose because of the parties’ dispute as to the meaning of this term. The majority
opinion simply finds that the term “incurred” is clear and unambiguous. In fact, the
majority opinion states that “[t]he typical consumer would understand that a medical
expense is incurred at the time the services are rendered.” I disagree. First of all, the term
is not defined in the insurance policy and is far from clear and unambiguous. Secondly,
because both parties put forth compelling arguments supporting their respective positions
as to the definition of “incurred.” I believe that this debate is evidence of the term’s
ambiguity.
To support its position that Ms. Moser deserved to be compensated, the
majority cites a general dictionary definition of “incur” as “to become liable or subject to,”
ignoring the fact that Ms. Moser never ultimately became “subject to” having to pay the
charges. Under the majority’s interpretation, “incurred” would include the total bill for the
medical treatment of the insured rather than the bill for which the insured is directly and
legally liable. In sum, the majority adopts a definition of “incurred” so broad that it does
not matter whether Ms. Moser was liable for the medical bill or not.
2 I view this case differently. First of all, it is clear that the charges a patient
ultimately becomes responsible to pay often vary substantially from those charges that
were noted at the time a patient is treated. For example, the patient usually receives an
explanation of benefits which shows the original amount billed. Then, the insurance
company and the provider will usually negotiate, and write off a portion of the bill. Next,
the insurance company pays for portion of the remaining amount—often times, the
insurance company will pay for most, or all, of the remaining bill. Finally, the patient is
held responsible for payment of the final amount once such amount is reduced by insurance
payments and other offsets. This is precisely what occurred in this case.
As mentioned above, Ms. Moser never paid for any medical bills out of
pocket—this payment was made by the insurance carrier. Because Ms. Moser never paid
for her medical bills, she has already been fully compensated. The decision of the circuit
court, as affirmed by the majority, affords Ms. Moser a double recovery—and this Court
has long disfavored double recoveries. In fact, it is the “preeminent public policy of this
state ... that the injured person be fully compensated for his or her damages[.]” State
Automobile Mut. Ins. Co. v. Youler, 183 W.Va. at 564, 396 S.E.2d at 745 (emphasis in
original). The mere fact that an insured has a variety of coverages available to compensate
him or her does not increase his or her damages. It is only when, by operation of a policy
provision, an insured’s available coverage results in less than “full compensation” that we
would need to consider awarding additional compensation.
3 Although in a slightly different context (i.e. underinsured coverage), this
Court has recognized that insurers providing underinsured motorist coverage are “liable
for the excess or uncompensated damages up to the underinsured motorist coverage
limits.” Youler, 183 W.Va. at 568, 396 S.E.2d at 749 (emphasis added). Quite simply, the
damages covered by the tortfeasor’s liability policy and the medical payments coverage do
not constitute “uncompensated” damages. Many other courts have also concluded that
uninsured and/or underinsured motorist coverage may be properly offset by medical
payments to prevent a double recovery. See Ostransky v. State Farm Ins. Co., 252 Neb.
833, 566 N.W.2d 399 (1997); Mid–Century Ins. Co. of Texas v. Kidd, 997 S.W.2d 265
(Tex.1999); Ellison v. California State Auto. Ass'n, 106 Nev. 601, 797 P.2d 975
(1990); Wing, 17 P.3d 783 (Alaska 2001); Rowzie, 556 F.3d 165 (4th Cir.2009)
(interpreting South Carolina statute); Welborn, 480 F.3d 685 (5th Cir.2007) (interpreting
Mississippi law); Miera v. Dairyland Ins. Co., 143 F.3d 1337 (10th Cir.1998) (applying
New Mexico law); Standard Mut. Ins. Co. v. Pleasants, 627 N.E.2d 1327
(Ind.App.1994); Barnes v. Allstate Ins. Co., 608 So.2d 1045 (La.App. 1992); Taxter v.
Safeco Insurance Co. of America, 44 Wash.App. 121, 721 P.2d 972 (1986); Yates v.
Dean, 244 Ga.App. 333, 535 S.E.2d 335 (2000); Kessler v. Shimp, 181 N.C.App. 753, 640
S.E.2d 822 (2007).
In this case, interpreting “incurred” as including only damages for which the
victim is actually liable does not undercompensate the victim or “short” them in any way.
4 Rather, this interpretation ensures “full and complete recovery” while also preventing a
double recovery, which this Court has long found violative of public policy: “It is generally
recognized that there can be only one recovery of damages for one wrong or injury. Double
recovery of damages is not permitted; the law does not permit a double satisfaction for a
single injury.” Syl. Pt. 7, in part, Harless v. First Nat'l Bank in Fairmont, 169 W.Va. 673,
289 S.E.2d 692 (1982); see also McDavid v. U.S., 213 W.Va. 592, 601, 584 S.E.2d 226,
235 (2003) (noting that it is “axiomatic” that only one recovery is permitted for each
loss); see also McCormick v. Allstate Ins. Co., 202 W.Va. 535, 505 S.E.2d 454
(1998); Smithson v. United States Fid. & Guar. Co., 186 W.Va. 195, 411 S.E.2d 850
(1991); Meade v. Slonaker, 183 W.Va. 66, 394 S.E.2d 50 (1990); Sewell v. Gregory, 179
W.Va. 585, 588 n. 4, 371 S.E.2d 82, 85 n. 4 (1988) (“The Appellants, of course, would not
be entitled to recover twice for the same damages, but may assert available alternate
theories of liability”); Wiggins v. Eastern Associated Coal Corp., 178 W.Va. 63, 66, 357
S.E.2d 745, 748 (1987) (“The appellant could not have been granted any additional relief
under the parallel West Virginia statute because ‘[d]ouble recovery of damages is not
permitted; the law does not permit a double satisfaction for a single injury.’” (citing Syl.
Pt. 7, in part, Harless)).
The very purpose of MPCs is to protect the insured from having to pay out-
of-pocket expenses. Ms. Moser did not have to pay uncompensated out-of-pocket
expenses. Indeed, Ms. Moser was never obligated to pay amount for her physical therapy,
and she willingly settled for $60,000 of the $100,000 available from the tortfeasor. To
5 compensate her beyond that, for bills she did not incur, would be unfair and against this
State’s longstanding policy of reasonable compensation.
Ultimately, based on the information put forth above, I disagree with the
majority’s decision, and I would reverse the circuit court’s order granting summary
judgment in favor of Ms. Moser. The majority’s decision misinterprets the contractual
term “incurred” to include charges for which Ms. Moser never became personally
responsible to pay and sanctions windfalls and the double recovery of damages, which is
against the longstanding public policy and longstanding posture of this State. Insurance
exists to prevent victims from having to pay out of pocket expenses; however, it does not
exist to award victims for being involved in accidents or to provide them with an excess of
damages. For these reasons, I respectfully dissent.