Opinion ID: 1926975
Heading Depth: 1
Heading Rank: 6

Heading: Subrogation Rights Claim

Text: In July 1994, Kaiser Foundation Health Plan of Massachusetts, plaintiff's health insurance provider, filed a motion to intervene with the superior court, asserting its subrogation rights in plaintiff's lawsuit against Ford and other defendants. Plaintiff's subsequent summary judgment motion was granted by the court in an August 1995 ruling which held that the subject policy gave Kaiser only a right to reimbursement after recovery, not an equitable subrogation right. Kaiser now appeals that ruling. We affirm the court's dismissal. We review a motion for summary judgment under the same standard as the trial court: summary judgment is appropriate only when the record clearly shows that there is no genuine issue of material fact and that the movant is entitled to judgment as a matter of law. See V.R.C.P. 56(c); Bacon v. Lascelles, 165 Vt. 214, 218, 678 A.2d 902, 905 (1996). In making this determination, we regard as true all allegations of the nonmoving party that are supported by admissible evidence, and we also give the nonmoving party the benefit of all reasonable doubts and inferences. See Messier v. Metropolitan Life Ins. Co., 154 Vt. 406, 409, 578 A.2d 98, 99-100 (1990). Kaiser's first argument is that the policy's language creates a right of subrogation, thereby granting the insurer the right to intervene in this lawsuit. The language at issue, appearing under the heading Third Party Liability/Motor Vehicle Insurance Recoveries, reads: Sometimes we will provide or arrange health services when you have a legal right against a person, organization or insurer to recover for those services. This may happen, for example, if you are in an automobile accident or have a job-related injury. It may also happen if you are injured and another party is legally responsible. If an injury or illness is caused by a third party or in an accident covered by motor vehicle insurance, you must reimburse Health Plan for services or benefits you receive as a result of the injury or illness, or allow us to recover directly from the third party insurer. Even if the payment by the third party or insurer is less than the full amount of your damages, Health Plan has a right to be reimbursed for the services it provided or paid for. Our recovery can be no more than the fee-for-service cost of these services. (Emphasis added.) An insurance policy must be construed according to its terms and the evident intent of the parties as expressed in the policy language. See Northern Security Ins. Co. v. Hatch, 165 Vt. 383, 385-86, 683 A.2d 392, 394 (1996). Disputed terms should be read according to their plain, ordinary and popular meaning. See American Protection Ins. Co. v. McMahan, 151 Vt. 520, 522, 562 A.2d 462, 464 (1989). Where a disputed term in an insurance policy is susceptible to two or more reasonable interpretations, the ambiguity must be resolved in favor of the insured. See City of Burlington v. Associated Elec. & Gas Ins. Servs., 164 Vt. 218, 221, 669 A.2d 1181, 1183 (1995). Here, the policy's language does not explicitly provide a right of subrogation or Kaiser. While the conjunction or between the clear reimbursement right and the direct recovery provision indicates that there is an option available, the policy does not clearly assign the right to exercise that option to the insurer, an opportunity to which Kaiser easily could have availed itself in drafting the policy. See, e.g., Lopez v. Concord Gen. Mut. Ins. Group, 155 Vt. 320, 324, 583 A.2d 602, 605 (1990) (as condition of obtaining medical payments benefits from automobile insurance policy, insured signed proof of loss form, which included following language: I (we) hereby subrogate the said Company to all rights and causes of action I(we) have against any person, persons or corporation whomsoever for the above listed claim for services arising out of or incident to said accident.). Despite Kaiser's arguments to the contrary, if any inference at all can be drawn from the direct recovery language here, it is that the option belongs to the insured who may allow Kaiser to subrogate if the insured chooses not to sue the third party himself. As the superior court observed in its summary judgment ruling, the [p]olicy provision in question merely creates a right of reimbursement after recovery or right to allow insurer to recover. The latter does not ripen until plaintiff has elected to do so. Nor are we persuaded that the language of the policy at issue and the facts of this case compel the application of the doctrine of equitable subrogation. See Norfolk & Dedham Fire Ins. Co. v. Aetna Casualty & Surety Co., 132 Vt. 341, 344, 318 A.2d 659, 661 (1974) (Subrogation is an equity creature akin to and derived from the law of unjust enrichment and restitution.). This doctrine permits an insurer to be subrogated to the claims of its insured, even if the policy lacks an express provision reserving such a right. See id. The doctrine's purpose is purely equitable. Kusserow v. Blue Cross-Blue Shield, 140 Vt. 328, 334, 437 A.2d 1114, 1118 (1981). Plaintiff in this case  unlike the insured in Kusserow  has acknowledged his legal obligation to reimburse the insurer for the medical expenses paid on behalf of the plaintiff. Insurer in this case  unlike the insurer in Kusserow  cannot point to a plain and unambiguous subrogation clause. See id. at 331, 437 A.2d at 1116 (subrogation provision read that No Benefits Shall Be Provided ... unless and until the [insured] shall in writing grant [the insurer] an assignment of his right of recovery equal to the amount of benefits to be paid him hereunder in connection with injuries....). The equitable purpose of subrogation is not served when, as here, neither the actions of the insured nor the policy of the insurer require judicial recognition of a right of subrogation. We decline to recognize such a right for Kaiser. Affirmed.