Opinion ID: 2632800
Heading Depth: 1
Heading Rank: 4

Heading: defendants' um carrier is a third party under the plan

Text: ¶ 23 We are asked on appeal to construe the language of the subrogation/reimbursement provision to determine whether NAICO may be reimbursed from proceeds obtained by its insured from the insured's own UM carrier. [59] The Plan provision in dispute states: Right to Subrogation When We pay benefits under the Plan and it is determined that a third party is liable for the same expenses, We have the right to subrogate from the monies payable from the third party equal to the amount We have paid for such benefits. You must reimburse Us from any monies recovered form (sic) a third party as a result of a judgment against or settlement with or otherwise paid by the third party. You must take action against the third party, furnish all the information and provide assistance to Us regarding the action taken, and execute and deliver all documents and information necessary for Us to enforce Our rights of subrogation. (emphasis added) [60] ¶ 24 Defendants argue that the words third party in the quoted provision do not include an injured insured's UM carrier. We disagree. The plain and ordinary meaning of the term third party is simply someone who is not a party to the health insurance contract. A UM carrier's first party status vis a vis its insured does not alter its third party status vis a vis the health insurance contract. Defendants would have us limit the words third party to the tortfeasor or the tortfeasor's insurer. Nothing in the contract itself justifies interjection of such a restriction. Defendants' reliance on Provident Life & Accident Insurance Company v. Ridenour [61] is misplaced. Ridenour turns on COCA's interpretation of the specific language used in the contract there at issue. That language is distinguishable from the language used in the subrogation/reimbursement provision of the Plan under review and does not support a general rule of law prohibiting subrogation or reimbursement from UM proceeds. ¶ 25 The Plan provides not only that the person or entity from whom reimbursement is sought must be a third party, but that it must be a third party who is liable for the same expenses, . . .  We hold that the defendants' UM carrier is a third party liable for the same expenses. UM coverage is typically described as indemnity insurance because it pays the person who pays for the policy, but the UM insurer's obligation to pay anything at all depends on the liability of the uninsured or underinsured tortfeasor. Under our UM statute, once a vehicle is determined to be uninsured, the UM carrier becomes legally responsible  i.e. legally liable  to pay the insured for the same expenses the tortfeasor or the tortfeasor's liability insurer would be liable to pay were the tortfeasor not uninsured or underinsured.