Vass v. COMPREHENSIVE MAJOR MEDICAL PLAN

379 S.E.2d 26, 324 N.C. 402, 1989 N.C. LEXIS 247
CourtSupreme Court of North Carolina
DecidedMay 4, 1989
Docket213PA88
StatusPublished
Cited by23 cases

This text of 379 S.E.2d 26 (Vass v. COMPREHENSIVE MAJOR MEDICAL PLAN) is published on Counsel Stack Legal Research, covering Supreme Court of North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Vass v. COMPREHENSIVE MAJOR MEDICAL PLAN, 379 S.E.2d 26, 324 N.C. 402, 1989 N.C. LEXIS 247 (N.C. 1989).

Opinion

MITCHELL, Justice.

In 1984, the plaintiff Thomas Vass was a State employee whose health was insured through the Teachers’ and State Employees’ Comprehensive Major Medical Plan (hereinafter “the Medical Plan”). Under the Medical Plan the State was a self-insurer. EDS Federal Corporation (hereinafter “EDS”) was the “Claims Processor” which administered the Medical Plan, and the Board of Trustees of the Medical Plan (hereinafter “the Board”) supervised its administration.

For several years prior to 1984, the plaintiffs vision in his right eye had steadily deteriorated. The plaintiffs ophthalmologist referred him to Dr. Frederick B. Kremer, an ophthalmologist and director of the Refractive Eye Surgery Center in Philadelphia, Pennsylvania. After consulting Dr. Kremer, the plaintiff underwent radial keratotomy to correct the vision in his right eye. Radial keratotomy involves making laser incisions on the front *404 surface of the cornea. The surgery was successfully performed on the plaintiff and, as a result, he incurred medical expenses of $1,725.00.

The plaintiff filed a claim with EDS under the Medical Plan to recover his costs for the surgery. His claim was denied by EDS, and he appealed to the Board. On 14 November 1984, the Board denied his claim, purporting to do so pursuant to: (1) N.C.G.S. § 135-40.6(6)h, which states that “[n]o benefits will be payable for surgical procedure specifically listed by the American Medical Association or the North Carolina Medical Association as having no medical value”; (2) N.C.G.S. § 135-40(b) which states that “[t]he [Medical] Plan benefits will be provided under contracts between the State and the Claims Processor selected by the State . . . and shall be administered by the respective Claims Processor of the State which will determine benefits and other questions arising thereunder”; (3) the recommendation of the Medical Director of EDS, the administrator of the Medical Plan; and (4) the Board’s belief that the procedure was basically a substitute for eyeglasses which were not covered under the Medical Plan.

The plaintiff later attempted to convince EDS, administrator of the Medical Plan, to reconsider his case. He then received a letter from the EDS Medical Director, Dr. Sarah T. Morrow, which indicated that the plaintiff had exhausted all administrative appeal processes and that “[t]here is no further appeal other than through litigation.” Thereafter, the plaintiff instituted this action for breach of contract against the Board, the Medical Plan Director Geoffrey Elting, and EDS.

The trial court allowed motions to dismiss on behalf of the defendants Elting and EDS. Both the plaintiff and the remaining defendant, the Board, filed motions for summary judgment. The trial court granted summary judgment in favor of the defendant Board and denied the plaintiffs motion. The plaintiff appealed to the Court of Appeals from the trial court’s entry of summary judgment in favor of the defendant Board. The Court of Appeals remanded the case to the trial court to be dismissed for lack of subject matter jurisdiction.

The Court of Appeals relied on the current version of the Administrative Procedure Act, codified as Chapter 150B of the Gen *405 eral Statutes of North Carolina, in resolving the issues presented by the plaintiffs appeal from the judgment of the trial court. The Court of Appeals concluded that the defendant Board, established by N.C.G.S. § 135-39, is an administrative agency covered by the Act. The Court of Appeals also noted that the Act specifically provides that when a dispute between a State agency and another person arises and cannot be resolved by informal procedures, “either the agency or the person may commence an administrative proceeding to determine the person’s rights, duties, or privileges at which time the dispute becomes a ‘contested case.’ ” N.C.G.S. § 150B-22 (1987). The Court of Appeals then ordered this civil action remanded to the trial court to be dismissed for lack of subject matter jurisdiction, apparently on the theory that by failing to initiate such an administrative proceeding to determine his rights, the plaintiff had failed to exhaust the administrative remedies provided him by the Administrative Procedure Act. By obiter dictum, the Court of Appeals implied that the plaintiff should thereafter proceed to bring his dispute with the Board “under the Administrative Procedure Act.”

The defendant-appellant Board agrees with the Court of Appeals that the trial court lacked subject matter jurisdiction in this dispute, but contends that the plaintiff cannot now pursue any remedy provided by the Administrative Procedure Act. The plaintiff, on the other hand, argues that the Court of Appeals was correct in stating that the “plaintiffs dispute with the Board should be brought under the Administrative Procedure Act” and, by implication, that he is not time-barred from so doing.

The only issue that we find it necessary or proper to address on the record before us is whether the Court of Appeals was correct in holding that the trial court was required to dismiss this civil action due to a lack of subject matter jurisdiction. We conclude that the trial court did not have subject matter jurisdiction and, for reasons hereinafter stated, modify and affirm the result reached by the Court of Appeals.

To decide whether the trial court had subject matter jurisdiction in this case, we first consider whether either the former version of the Administrative Procedure Act, N.C.G.S. Chapter 150A, or the current version, N.C.G.S. Chapter 150B, applies 1 to *406 decisions of the defendant-appellant Board. Both versions clearly state that the purpose of the Administrative Procedure Act is to establish as nearly as possible a uniform system of administrative procedures for State agencies. N.C.G.S. § 150B-l(b) (1987); N.C.G.S. § 150A-l(b) (Cum. Supp. 1981) (rewritten and recodified 1985). Both versions also clearly indicate that the Administrative Procedure Act shall apply to every agency of the executive branch 2 of State government, except to the extent and in the particulars that any statute “makes specific provisions to the contrary.” N.C.G.S. § 150B-l(c) (1987) (emphasis added); N.C.G.S. § 150A-l(a) (1978 & Cum. Supp. 1981 & Cum. Supp. 1983) (rewritten and recodified 1985) (emphasis added). Further, it is equally clear that the defendant-appellant Board is an “agency” of the executive branch of State government under either version of the Administrative Procedure Act. N.C.G.S. § 150B-2(1) (1987); N.C.G.S. § 150A-2(1) (1978) (rewritten and recodified 1985).

Because the defendant-appellant Board is an “agency” as that term is defined under either version of the Administrative Procedure Act, the Act applies to the Board except to the extent and in the particulars that any statute makes specific provisions to the contrary. The Board contends that article 3 of Chapter 135 of the General Statutes of North Carolina, creating the Medical Plan, makes such “specific provisions” exempting the Board. Specifically, the Board directs our attention to N.C.G.S. § 135-39.7 which provides:

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Cite This Page — Counsel Stack

Bluebook (online)
379 S.E.2d 26, 324 N.C. 402, 1989 N.C. LEXIS 247, Counsel Stack Legal Research, https://law.counselstack.com/opinion/vass-v-comprehensive-major-medical-plan-nc-1989.