Title: Blue Cross & Blue Shield of Miss. v. Larson
Citation: 485 So. 2d 1071
Docket Number: 55312
State: Mississippi
Issuer: Mississippi Supreme Court
Date: March 19, 1986

485 So. 2d 1071 (1986) BLUE CROSS &amp; Blue Shield of Mississippi, Inc. v. Kenneth W. LARSON, et ux. No. 55312. Supreme Court of Mississippi. March 19, 1986. Warren C. Dorsey, Jr., Jackson, for appellant. Roland J. Mestayer, Jr., Megehee, Brown, Williams &amp; Mestayer, Charles J. Weeks, Pascagoula, for appellees. Before PATTERSON, C.J., and SULLIVAN and ANDERSON, JJ. PATTERSON, Chief Justice, for the Court: This appeal concerns the construction of insurance contract provisions. One is a Coordination Of Benefits (C.O.B.) provision in a Blue Cross &amp; Blue Shield group policy of Moss Point Marine covering Kenneth Larson, a participating employee, and his wife, Carolyn, as his dependent. The second is an "Other Insurance" provision contained in the Pascagoula-Moss Point Bank Employee Medical Expense Reimbursement Trust (Trust) covering Carolyn as a bank employee participant. Carolyn was an employee of the Pascagoula-Moss Point Bank which created the Trust to pay medical expenses of its employees if there was no other medical coverage. Carolyn was also protected by Blue Cross &amp; Blue Shield as a dependent through her husband's policy as an employee of Moss Point Marine. Medical expenses of over $600.00 were incurred by Carolyn for which she unsuccessfully *1072 sought reimbursement from Blue Cross. The claim was denied because Blue Cross maintained its obligation was secondary, and that her employer's Trust was primarily liable. Accordingly, it tendered less than $200.00 (excess) to the Larsons as a secondary insurance carrier. The original complaint for declaratory relief was filed in the County Court of Jackson County where, after submission of joint stipulations of fact, oral arguments and briefs, the court determined Blue Cross to be primarily liable and the Trust liable to Carolyn for "contingent excess liability" for her medical expenses. Blue Cross appealed this judgment to the circuit court where it was affirmed. This appeal follows. The Blue Cross policy contains a C.O.B. provision to limit benefits for a single medical risk to not more than one hundred percent of the medical expenses. The C.O.B. is intended to avoid duplication of coverage, and thereby avoid twofold payment exceeding the actual medical expenses to a claimant. The C.O.B. provision of the Blue Cross policy follows: The Bank's Trust for its employees contained a clause relating to "Other Insurance," viz: Coordination of benefits is a valid method to contain health care cost within reasonable limits by the prevention of duplication of payments in excess of actual medical charges. These provisions provide an orderly procedure for the determination of primary and secondary coverage responsibilities. Complexities have arisen largely because our society supports, and family economics demand, the employment of both spouses outside the family unit. The Supreme Court of Kansas in Blue Cross &amp; Blue Shield of Kansas Inc. v. Riverside Hospital, 237 Kan. 829, 703 P.2d 1384 (1985), in recognition of the need for C.O.B. clauses stated: The procedures for equitably resolving the issues arising from duplicating coverage have been addressed by this Court. In Travelers Indemnity Co. v. Chappell, 246 So. 2d 498 (Miss. 1971), we gave examples of three broad categories of "other insurance" clauses where the phraseology of the policies permitted. The first is a "pro rata" clause in which one company is primary but agrees to pay its prorata share with other *1073 primary insurers. The second category is the "excess" clause, which insures the loss only to the extent it is not paid by other insurance. The third category is the "escape" clause where the insurer disclaims any liability where there is other coverage. We discussed the development of these legal principles stating: We observed, however, that if there were conflicting clauses not within similar categories whereby one clause of a policy predominates over a somewhat similar clause of another policy, legal entanglements would likely follow. We observed: Our interpretation of the C.O.B. provision of Blue Cross encompasses not only its language to achieve the prevention of over-payment of claims; but necessarily entails other considerations in resolving, or attempting to, the procedural steps necessary to the resolution of primary and secondary coverage. One such fact employed in the resolution is the status of the protected employee; i.e., whether a subscribing beneficiary of his employer's protection plan, or whether the claimant is a dependent beneficiary of the subscribing beneficiary, but who is also a primary beneficiary of another program of a different employer. In this circumstance the dependent claimant, by ordinary C.O.B. agreements, would be required to seek primary medical benefit payments from the insurer to whose services he or she subscribes. By this method of determining primary and secondary liability coverage, the claimant's status as a designated beneficiary in coverage provided by a spouse is largely overlooked. By invoking this procedure the liability of Blue Cross in this case is secondary simply because the claimant enjoys or is burdened by the protection plan of her own employer. Although this expedient procedure undoubtedly has admirable persuasions to support it such as simplicity and the avoidance of litigation with its cost, it overlooks and erodes the privileged right of the several parties to contract, assuming such is not against public policy, by expressing their intentions through the language of their choice. Other well intended devices such as primary and secondary liability being established according to the time in which coverage was attained, in our opinion, detract from the language expressing the intentions of the insurer and the insured. It is our opinion the issue now before us can best be determined by resolving the protection intended to be afforded by Blue Cross and that intended by the Trust as expressed in their contracts without employment of devices to expedite contractual interpretation. In Blue Cross &amp; Blue Shield of Kansas, Inc. v. Riverside Hospital, supra, the court considered two employee health care benefit plans to determine which plan had primary coverage of the claim. This issue was resolved in favor of Blue Cross because of the language of the policies. The Kansas Court explained: Relying on Northeast Dept. ILGWU v. Teamsters Local U. No. 229, 764 F.2d 147 (3rd Cir.1985), the Kansas Court remanded the cause by stating: We do not have the same language under consideration in this case. In Starks v. Hospital Service Plan of N.J., Inc., 182 N.J. Super. 342, 440 A.2d 1353, 25 A.L.R. 4th 1022 (1981), the New Jersey Court held against Blue Cross-Blue Shield because the overall objective of the two policies revealed one policy had primary coverage and the other had only a provision for excess coverage in the event there was primary coverage for the claimant emanating from another policy source. This is to say the claimant's policy never intended to provide primary coverage where another policy existed containing primary coverage for the spouse of the primary beneficiary, but was only secondary or excess coverage if a spouse was protected by the provisions of another policy. In other words, we do not think the C.O.B. provision of Blue Cross and the "Other Insurance" expression in the Trust are compatible to a construction permitting a plan against which the benefits of the two policies could be coordinated. This appears to be the precise situation now before us. We find Starks, supra, to be precisely on point and because this is so, we quote from it somewhat extensively. For the foregoing reasons we are of the opinion the trial court and the circuit court on appeal reached the proper result in the resolution of the issue before them. We also hold that Blue Cross &amp; Blue Shield is primarily liable to Carolyn Larson for her medical expenses and the Bank Trust is liable only for "Contingent Excess Liability." The judgment of the circuit court on appeal is affirmed. AFFIRMED. WALKER and ROY NOBLE LEE, P.JJ., and HAWKINS, DAN M. LEE, PRATHER, ROBERTSON, SULLIVAN and ANDERSON, JJ., concur.