Dignity Health v. Farmers Ins. Co. of Ariz.

444 P.3d 743, 247 Ariz. 39
CourtCourt of Appeals of Arizona
DecidedJune 11, 2019
DocketNo. 1 CA-CV 18-0292
StatusPublished
Cited by4 cases

This text of 444 P.3d 743 (Dignity Health v. Farmers Ins. Co. of Ariz.) is published on Counsel Stack Legal Research, covering Court of Appeals of Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Dignity Health v. Farmers Ins. Co. of Ariz., 444 P.3d 743, 247 Ariz. 39 (Ark. Ct. App. 2019).

Opinion

THUMMA, Chief Judge:

*745¶1 The dispositive issue in this appeal is whether payments under optional medical payments coverage in an automobile insurance policy (what the parties call "medpay coverage") are "health insurance" and, therefore, not subject to a health care provider lien. As discussed below, because medpay coverage is not health insurance for purposes of the lien statute, those payments are subject to the health care provider lien. Accordingly, the grant of defendant Farmers Insurance Company of Arizona's motion to dismiss is vacated and this matter is remanded.

FACTS1 AND PROCEDURAL HISTORY

¶2 Farmers issued an automobile insurance policy to Bethanie Elliott that included optional medpay coverage. Plaintiff Dignity Health, doing business as Mercy Gilbert Medical Center, provided Elliott medical services after she was injured in a car accident. The usual and customary charges for those services exceeded $ 160,000. Dignity perfected and recorded a health care provider lien for more than $ 140,000 to secure payment for those services. See Ariz. Rev. Stat. (A.R.S.) § 33-931 (2019).2 Notwithstanding that lien, Farmers directly paid Elliott $ 99,000 in medpay benefits under her automobile insurance policy.

¶3 Dignity timely filed this lien enforcement action, claiming Farmers' payment to Elliott violated the lien. Farmers successfully moved to dismiss for failure to state a claim, arguing its payment was not subject to the lien. Dignity timely appealed from the resulting final judgment. See Ariz. R. Civ. P. 54(c). This court has jurisdiction pursuant to Article 6, Section 9, of the Arizona Constitution and A.R.S. §§ 12-120.21(A)(1) and - 2101(A)(1).

DISCUSSION

¶4 Under A.R.S. § 33-931, a health care provider may obtain a lien to secure payment of customary charges for services provided to an injured person, with certain express exceptions to the scope of such a lien:

A lien pursuant to this section extends to all claims of liability or indemnity, except health insurance and underinsured and uninsured motorist coverage as defined in § 20-259.01 , for damages accruing to the person to whom the services are rendered ... on account of the injuries that gave rise to the claims and that required the services.

A.R.S. § 33-931(A) (emphasis added). Thus, if Farmers' payment of medpay benefits to Elliott was a health insurance benefit, it was exempt from Dignity's lien. But if the payment was not a health insurance benefit, it violated the lien.

¶5 Determining whether medpay is health insurance is complicated by the record and arguments on appeal. The insurance policy containing the medpay coverage is not included in the record. Moreover, the parties cite no statutory definition of "health insurance" or "medpay coverage," and this court has found no such definitions applicable to Section 33-931(A). Although aspects of medpay coverage have been the subject of litigation in Arizona for decades, e.g. , Sahadi v. Mid-Century Ins. Co. , 132 Ariz. 422, 423, 646 P.2d 307, 308 (App. 1982), the issue here is one of first impression.

*746¶6 In moving to dismiss based on an exception to the lien statute, Farmers had the burden to show Dignity's lien enforcement claim failed as a matter of law. See Ariz. R. Civ. P. 12(b)(6) ; cf. Troutman v. Valley Nat'l Bank of Ariz. , 170 Ariz. 513, 517, 826 P.2d 810, 814 (App. 1992) (stating burden to show applicability of statutory exception is "on the party asserting that exception"). This court reviews de novo both the interpretation of a statute and the grant of a Rule 12(b)(6) motion to dismiss. Coleman v. City of Mesa , 230 Ariz. 352, 355 ¶ 7, 284 P.3d 863, 866 (2012) ; Canon Sch. Dist. No. 50 v. W.E.S. Constr. Co. , 177 Ariz. 526, 529, 869 P.2d 500, 503 (1994).

¶7 "[T]he best and most reliable index of a statute's meaning is its language and, when the language is clear and unequivocal, it is determinative of the statute's construction." State v. Hansen , 215 Ariz. 287, 289 ¶ 7, 160 P.3d 166, 168 (2007) (citation omitted). "In giving effect to every word or phrase, the court must assign to the language its 'usual and commonly understood meaning unless the legislature clearly intended a different meaning.' " Bilke v. State , 206 Ariz. 462, 464-65 ¶ 11, 80 P.3d 269, 271-72 (2003) (citation omitted). Only where statutory text is ambiguous and susceptible to more than one plausible interpretation does the court use tools of statutory construction, looking to "the statute's context; its language, subject matter, and historical background; its effects and consequences; and its spirit and purpose." Hayes v. Cont'l Ins. Co. , 178 Ariz. 264, 268, 872 P.2d 668, 672 (1994).

I. As Used In A.R.S.

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Cite This Page — Counsel Stack

Bluebook (online)
444 P.3d 743, 247 Ariz. 39, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dignity-health-v-farmers-ins-co-of-ariz-arizctapp-2019.