Opinion ID: 1226544
Heading Depth: 1
Heading Rank: 6

Heading: the question of double recovery

Text: It has been suggested that if Linn prevails against MSB he has effected a double recovery. Double recovery, however, is ordinarily a term used in the context of tort actions, in which the rule is that a plaintiff proceeding to judgment against several defendants cannot collect his judgment from all of them, but is held to one satisfaction of his judgment. But contractual relationships are different. A man may have more than one policy insuring against the loss of his life. That his widow collects on all of the policies is not a double recovery, but rather payment made pursuant to a contractual obligation incurred for a premium paid. Similarly, it has been held that there is no legal or policy reason why an insured should not be allowed to contract with insurance companies for double or multiple medical coverage. See, e.g., Phoenix Insurance Co. of New York v. Leonard, 270 Ala. 427, 119 So.2d 217 (1960); Hensley v. Farm Bureau Mutual Insurance Co., 243 Ark. 408, 420 S.W.2d 76 (1967); Heis v. Allstate Insurance Co., 248 Or. 636, 436 P.2d 550 (Or. 1968); Batchelor v. American Health Insurance Co., 234 S.C. 103, 107 S.E.2d 36 (1959); National Educators Life Insurance Co. v. Morgan, 295 S.W.2d 713 (Tex.Civ.App. 1956); Ciokewicz v. Lynn Mutual Fire Insurance Co., 212 Wis. 44, 248 N.W. 778 (1933). As stated in Heis v. Allstate Insurance Co., supra, 436 P.2d at 552: [T]here is no public policy which dictates a single insurance recovery for medical payments. A person may bargain with as many insurance companies as he pleases for the payment of medical expenses incurred by him. This does not result in any unfairness to the multiple insurers. Each insurer receives a premium which we may assume is computed upon the basis that the insurer alone will be obligated to pay the medical expenses of the insured and not simply the excess or a pro rata proportion of the expenses with other insurers. As we have already noted, if it were the intention to so limit liability it is reasonable to assume that the insurer would have included an excess or pro rata clause in the section of its policy on medical expense coverage. Any other result would put an undue burden on the insured to carefully check all the complexities of any policies he may have to ensure that he is not throwing his money away on wasted double coverage. Moreover, whether the insured pays the premium or negotiates the coverage is also irrelevant. As stated in Lecker v. General American Life Insurance Co., 55 Haw. 624, 525 P.2d 1114, 1118 (1974): Although in Riske [ Riske v. National Casualty Co., 268 Wis. 199, 67 N.W.2d 385 (1954)], the insured had herself actually contributed toward the payment of the premium, we do not regard this feature as of any consequence. Whether in this case the premium was paid by the employer or by someone else, it would seem to us that consideration moved from the insured. It was not a gift from the employer, but rather bargained for compensation. The NELSON TRUST insurance policy was part of the compensation Linn received for his employment. We see no reason to treat this policy any differently than a policy he might have directly purchased for himself. Further, the fact that MSB is a medical service corporation does not alter this conclusion. While it is true that the purpose of these heavily-regulated corporations is to provide minimum standards of health care to as widely dispersed a segment of society as possible, and that they are non-profit, nonetheless the same basic principles of insurance law apply to service corporations as to any other insurance company. The issue in this case as it is in all cases in which the insurance company claims an exclusion, is whether there exists in fact such an exclusion against the claim of the insured. Finally, we note that since the facts were stipulated, we are reviewing only the trial court's conclusions of law. As such, we are not bound to defer to those conclusions. See Harding v. Home Investment & Saving Co., 49 Idaho 64, 286 P. 920 (1930); Scott v. Keever, 212 Kan. 719, 512 P.2d 346 (1973); Rist v. Westhoma Oil Co., 385 P.2d 791 (Okl. 1963).