# FILED

May 28, 1996 Cecil W. Crowson Appellate Cou rt Clerk IN THE SUPREME COURT OF TENNESSEE AT NASHVILLE

FOR PUBLICA

TION JAMES STAGGS, Successor and ) Representative of Mary Staggs, ) Filed: May 28, 1996 Deceased, ) ) Plaintiff/Appellant, ) LAWRENCE CIRCUIT ) v. ) ) Hon. JIM T. HAMILTON, NATIONAL HEALTH ) JUDGE CORPORATION, ) ) Defendant/Appellee. ) No. 01S01-9408-CV-00090

For Appellant: For Appellee: Ben Boston Paul B. Plant Christopher V. Sockwell J. Jay Cheatwood Boston, Bates & Holt Harwell, Plant & Ch eatwood Lawrenceburg, Tennessee Lawrenceburg, Tennessee



# O P I N I O N

TRIAL COURT REVERSED. ANDERSON, C.J.1 Mar y Stag gs die d on J anu ary 29 , 199 3, wh ile the first a ppe al of th is cas e wa s pen ding in this Court ; she was survived by her husban d and two minor chi ldren. Her husband, James Staggs, was substituted as succ essor and represen tative of Mary Staggs by order of this Court entered on May 25, 1993. -2- We review the conclusions of law of the Special Workers' Compensation Appeals Panel to determine w hether an employee is entitl ed to collect postjudgment interest on an aw ard of discretionary cos ts or on medical expenses an employer is ordered to repay to a third-party health insurance carrier.

The trial court decided that under the general statutes regarding interest on judgments, Tenn. Code Ann. §§ 47-14 -121 and -122, an employee is entitled to collect post-judgment i nterest on both the reimbursed medi cal expenses and the award of discretionar y costs. The Appeals Panel, however, concluded that the employee is not entitled to post-judgment interest o n either the reimbursed medical expenses or the award of discretionary costs.

For the reasons articula ted below, we find that the conclusions of the Special Workers’ Compensation Appeals Panel are correct, and the trial court is therefore, reversed.

BACKGROUND On December 19, 1990, Mary Staggs injured her back in the course of her employment with the defendant, N ational Health Corporati on, and thereafter filed a complaint seeking wor kers' compensation benefits. At trial, the court awar ded Staggs 1 permanent partial disabili ty benefits and temporary t otal benefits. The trial court also order

ed National Health to reimbur se Staggs for medical expenses she had paid from her per sonal funds and to reimburse Metr opolitan Life Insurance Company, Staggs’ husband’s health insurance com pany, for all-3- medical expenses paid by them. Litigation expens es were also award ed as discretionary costs. The trial court decision was appealed, affirmed by this Court, and remanded.

Following remand, N ational Health tendered the amounts due under the trial court order. Sta

ggs accepted payment under protest and moved the court t o require National Heal

th to pay interest on the s ums due. The trial court order ed that post-judgment interest be paid on the temporary total and permanent partial disability benefits as pr escribed by the Workers’ Compensation Act. In addition, relying on the gener

al statutes regarding

interest on judgments, Tenn. C ode Ann. §§ 47-14-121 and -122, the court o rdered that post-judgment i nterest be paid by National Health to Stagg s at the rate of 10 percent per y ear on the amount awarded for discretionar y costs ($1,466.33); on th e amount reimbursed to Metropolitan L ife for medi cal expenses ($11 ,252.30); and on the sum Staggs personally paid for medical expenses ($1,048.00).

On appeal, National Health c onceded that Staggs wasentitled to postjudgment interest on the medica l expenses paid from her ow n funds, but questioned the trial court’s decision allowing post-judgment interest on the award of discretionary costs and the reimbursement of medical ex penses to Metropolitan Life Insurance C ompany.

The Special Workers’ Compensation Appeals Panel concluded that Staggs was not entit led to post-judgment intere st on either the medical ex penses reimbursed to Metropolitan Life or the award of discretionary costs. Therea fter, we granted Staggs’

motion for full court revi ew and now review the conclusions of law of the Appeals Panel de novo
. See Tenn. Code Ann. § 50-6-225(e)(2) (1991 & Supp. 1995).-4- INTEREST ON MEDICA L EXPENSES Relying on Tenn.Code Ann. §§ 47-14-121 and -122, Staggs argues that the Appeals Panel erred in concluding that an employee is not entitled to collect post-judgment interest on medi cal expenses which the employer is ordered to repay to a third-party

insurer.

Staggs contends that the tr ial court’s judgment, or dering National Health to repay medical expense s to Metropolitan Life, is a money judgment and, therefore, is subject to the general post-judgment interest statu tes. Staggs also argues that the Panel’s disallowance of interest on reimbursed med ical bills encourages employers to delay payments, and resul ts in ”an unjust enrichment that rewards the party at fault without reimbursing the innocent party for the use of his or her funds."

National Health responds th at the Panel’s decision is correct - that an employee is not entitled to collect post-judgment interest on any amount for medical expenses whic h are paid by a third-par ty insurance carrie r on behalf of the employee and later reimbur sed by an employer. Nat ional Health relies upon West American Insurance Co. v. Montgome ry , 861 S.W.2d 230 (Tenn. 1993)

Staggs, however, argues that Montgomery is inapposite because this case is governed by

Tenn. Code Ann. §§ 47-14-121 and 122, the general postjudgment interest statutes. We disagree.

In Montgomery , we held that an employee is not entitled to collectpostjudgment interest on unaccr ued workers’ compensati on benefits. We stated that allowing interest

on unaccrued benefits "would not be in consonance with the2 Tenn. Code Ann. § 47-14-1 21 provides: “Interest

on judgments, i ncluding decr ees, shall

be computed at the effect ive rate of ten percent (10%) per annum, except as may be otherwise provided or permitted by

statute; provided, that -5- purpose and intent of the W orkers Compensation Act and would result in unjust enrichment to the employee." Montgomery , 861 S.W .2d at 23 2. Accord ingly, Montgomery stands for the proposition that an employee may not collect intere st unless and until the employee becomes entitled to receiv e the moneyon which interest is sought to be imposed. Applying that pr inciple to the facts in this case, it is clear that Staggs claim for entitlement to post- judgment interest on the money reimbursed to Metropolitan Life must fail.

As we observed in Montgomery , an employee is not entitled to personally receive payment for medical expenses unless he or she has personally paid the medical expenses and is due r eimbursement. Instead, employer s must pay the providers of medical car e directly for incurr

ed medical expenses. See Tenn. Code Ann. § 50-6-204. Here, St aggs was never entitled to receive the mone y on which she now seeks to collect post-judgment i nterest. National Health owed that money to Metropolitan Life directly as reimbursement fo r the medical bills it had paid. Accordingly , under the rationale articulated in Montgomery , Staggs is not entitled to collect post -judgment interest on the r eimbursed medical expenses.

Although the holding in Montgomery was based specifically upon the interest provision of the workers' compensation s tatute, Tenn. Code Ann. § 50-6- 225(h), we also discus

sed the general statutes r elating to post-judgment interest, noting that while they

provide for interest on ev ery judgment “from the day on which the jury or

the court, sitting w

ithout a jury, returned

the verdict without regard to a motion for a new trial,” 2 they do not “mean that the party securing thewhere a judgment is ba sed on a note, cont ract, or other wri ting fixing a rate of i nterest wi thin t he limit s provided i n § 47-14-103 for th at part icula r cate gory of transa ction,

the ju dgment shall bear i nterest at t he rate so fixed. ” Tenn C ode Ann. § 47-14-12 2 provides:

“Interest shal l be computed on every judgment from the day on wh ich the jury or the court, sitting w ithout a jury, returned the verdict without regard to a motion for a new trial.” -6- judgment may have inter est on the entire judgment unless he is entitle d to have the use of the proceeds of the judgment from a nd after the date the judgment was entered. " Id . (emphasis added). Thus, in Montgomery we recognized that the Legislature did not i ntend for a party to litig ation to be unjustly enri ched through the payment of post-jud gment interest. See also Price v. Price , 225 Tenn. 539, 472 S.W.2d 732 (1971)(interest accrued a s of date party entitled to money judgment).

In this case, Staggs w

as never entitled to hav e the use of that portion of the judgment reflecting the medi cal bills paid by M etropolitan Life on her behalf. The trial court merely found that the defend ant "is liable for all medical bills incident to [th e] injury which have be en paid by [Metrop olitan Life]. " Staggs never used her own money to pay for these medical ser vices, and therefore, an award of interest would amount to unjust enrichment. Accordingly, we reverse the trial court judgment and hold that neither Tenn. Code Ann. § 50-6-225(h) nor Tenn. Code Ann. §§ 47-14-121 and -122 aut horize the payment of postjudgment interest to an employ ee on medical expenses init ially paid by a thi rdparty health insurance c arrier and reimbursed to t hat carrier by the emplo yer.3 See no te 2, supra
. -7- INTEREST ON AWARD FOR DISCRETIONA RY COSTS We next consider whether a litig ant is entitled to collect post-judgment interest on an award of disc retionary costs. In t his case, the trial cour t ordered the defendant to pay interest in the amount o f 10 percent per year on the award of discretionary costs. The Appeals Panel, however, concluded that "[t]he discretionary costs

were an award, and not a judgment within the pur view of Tenn. Code Ann. § 47-14-122." 3

Arguing that the Appeals Panel’s conclusion is c orrect, National Health relies upon Gatewood v. Palmer , 29 Tenn. 466 (1850). In that case, this Court interpreted a predecessor i nterest statute which pr ovided that "all judgments entered up in any of the courts of record in this State, or by any justices of the peace, shall bear interest until paid,” and concluded that it did not authorize the collection of interest on a j udgment for court costs. Id . at 469; see 1835 Tenn. Pub. Acts, ch. 50, § 2; see also Green-Rea Co. v. Hol man , 107 Tenn. 544, 546, 64 S.W. 889 (1901).

Staggs argues that Gatewood is distinguishable because it involved court costs, not discretionary costs, and because the decisi on in Gatewood was rendered long be fore the Rules of Civil Procedure were promulgated . Staggs contends that since she did not receive reimbursement of the l itigation expenses for two years, she is

entitled to post-judgment i nterest.

We disagree. In our view, ther e is no distinction betw een an award of court costs and an award of discretionary costs when determining whether postjudgment interest should be pa yable. We, therefore, apply and reaffirm the-8- Gatewood rule that an award of discretionary costs is not a "judgment" on which post-judgment interest is due under Tenn. Code Ann. §§ 47-14-121 a nd -122. The trial court judgment i s, therefore, reversed.

CONCLUSION For the reasons discussed above, we conclude that S taggs is not entitled to collect post-judgment i nterest on either the medical expenses which Nati onal Health must repay to Metr opolitan Life or on the award of discretionary costs. Accordingly, the judgment of the trial court is reversed. Costs on appeal are taxed to the plaintiff, James Staggs.

RILEY ANDERSON, Chief Justice

CONCUR: Drowota, Reid, and White, JJ. Birch, J., not particip

ating