Opinion ID: 2635029
Heading Depth: 1
Heading Rank: 1

Heading: facts

Text: ¶ 2 Hayden Williams' father, Justin Williams, was employed by Mellor Engineering. During his employment, Mr. Williams participated in Mellor Engineering's employee welfare benefits plan, which was provided through Wasatch Crest Insurance Company (Wasatch Crest). Both Ms. Mellor and Hayden were beneficiaries under the Wasatch Crest plan. When Mr. Williams' employment with Mellor Engineering terminated in August 2000, he elected to continue health coverage for himself and his family through the Wasatch Crest plan under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). Mr. Williams and Ms. Mellor divorced in March 2001. COBRA premiums continued to be paid for Hayden, and Wasatch Crest continued to accept them, through November 7, 2001. ¶ 3 On August 3, 2001, Hayden suffered a near drowning accident which resulted in catastrophic, permanent injuries. Because of the overwhelming medical expenses and the prospect of ongoing expenses for Hayden's future care, Ms. Mellor applied for Medicaid coverage for Hayden two weeks after the accident. The application was approved in September 2001. Under Medicaid guidelines, and because of the need to ensure coverage for Hayden's past and future medical expenses, Hayden's effective coverage date was backdated to August 1, 2001. ¶ 4 The Wasatch Crest plan continued to make payments for Hayden's medical care until November 2001. At that time, Wasatch Crest asserted that under language of the plan, it had no obligation to continue coverage for Hayden after Medicaid coverage began on August 1, 2001. Wasatch Crest requested reimbursement from Hayden's health care providers and collected from many of them. In August of 2002, the Utah State Office of Recovery Services (ORS) began an effort to collect money from Wasatch Crest which it alleged had been improperly paid by Medicaid and should have been paid by the Wasatch Crest plan. A month later, ORS entered into a Collection Agreement with Ms. Mellor which authorized Ms. Mellor to include ORS's claim for reimbursement with her civil claims against Wasatch Crest, with ORS as an assignee of her rights of recovery. ¶ 5 On July 11, 2003, Wasatch Crest was declared insolvent. The district court set July 31, 2004 as the deadline for filing a proof of claim against the Wasatch Crest estate in liquidation. Ms. Mellor filed a timely claim. The claims in liquidation are being administered by Utah Life and Health Insurance Guaranty Association (ULHIGA), which thus became a party to this action. ¶ 6 A referee appointed to adjudicate disputes between claimants and Wasatch Crest's liquidator ruled that, under the language of the Wasatch Crest Plan, Wasatch Crest had no obligation to pay any of Hayden's medical expenses as of August 1, 2001. Ms. Mellor filed an objection with the Third District Court. At the subsequent hearing, Wasatch Crest and ULHIGA alleged that Ms. Mellor did not have standing to file a claim in the liquidation proceeding. The court agreed that Ms. Mellor did not have standing in her own right, but ruled that Ms. Mellor did have standing to file a claim on behalf of Hayden. The court further determined that while some of the documents that had been generated in connection with the claim had not always clearly designated that Ms. Mellor was acting in Hayden's behalf, it had been understood since the time that Ms. Mellor first initiated civil action that she was acting for Hayden. Nevertheless, the court approved the referee's findings as to Wasatch Crest's liability, ruling that Hayden had not been covered by the Wasatch Crest plan at the time of his accident. Ms. Mellor appealed the ruling on coverage to this court, and Wasatch Crest and ULHIGA cross-appealed on the issue of standing.