McCord v. HealthCare Recoveries, Inc., et al.
| Docket Number: | 2005-CA-01353-SCT Linked Case(s): 2005-CA-01353-SCT |
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| Supreme Court: | Opinion Link Opinion Date: 05-10-2007 Opinion Author: CARLSON, J. Holding: Affirmed |
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| Additional Case Information: |
Topic: Insurance - Bad faith - Tortious interference - Equitable subrogation Judge(s) Concurring: SMITH, C.J., WALLER, P.J., AND DICKINSON, J. Judge(s) Concurring Separately: EASLEY, J. JOINED BY DIAZ, P.J., AND RANDOLPH, J. Dissenting Author : EASLEY, J. Dissent Joined By : DIAZ, P.J., AND RANDOLPH, J. Concurs in Result Only: GRAVES, J. Procedural History: Bench Trial Nature of the Case: CIVIL - INSURANCE |
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| Trial Court: |
Date of Trial Judgment: 06-03-2005 Appealed from: LEE COUNTY CHANCERY COURT Judge: Jaqueline Mask Disposition: The Lee County Chancery Court, Chancellor Jacqueline Estes Mask, presiding, found that Travelers Insurance Company and Healthcare Recoveries, Inc., were not liable to Courtney Jo Ashmore McCord for damages for alleged tortious interference with the settlement of a minor’s personal injury claim. Case Number: 97-0525 |
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| Party Name: | Attorney Name: | |||
| Appellant: | CORTNEY JO ASHMORE McCORD |
ROY O. PARKER
ROY O. PARKER, JR. |
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| Appellee: | HEALTHCARE RECOVERIES, INC. AND TRAVELERS INSURANCE COMPANY | MICHAEL DAVID TAPSCOTT CLIFFORD KAVANAUGH BAILEY, III |
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Synopsis provided by:  If you are interested in subscribing to the weekly synopses of all Mississippi Supreme Court and Court of Appeals hand downs please contact Tammy Upton in the MLI Press office. |
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| Topic: | Insurance - Bad faith - Tortious interference - Equitable subrogation |
| Summary of the Facts: | Courtney Jo Ashmore was injured while riding an all-terrain vehicle. On the date of the accident, Courtney, as a dependent of her step-father, Michael Mask, was covered under a health plan provided by the Tennessee Valley Regional Housing Authority. Michael Mask was an employee of TVRHA. Benefits were paid under a group policy issued by Travelers Insurance Company to TVRHA. Courtney incurred medical expenses in the amount of $31,904.45, of which $26,222.79 was paid pursuant to the TVRHA plan. Betty Ashmore Mask, Courtney’s mother, hired a lawyer in an effort to recover damages for Courtney’s injuries. A personal injury claim was asserted against Joseph Arnold, the adjacent landowner who had strung the wire cable across the road which had caused the accident. Arnold was insured by Mississippi Farm Bureau Mutual Insurance Company. An apparent settlement was reached on the personal injury claim, necessitating the filing of a petition in chancery court seeking authority to compromise a minor’s doubtful claim (Courtney’s personal injury claim). The chancellor appointed Betty as Courtney’s guardian; authorized Betty to settle this doubtful claim with the landowner (Farm Bureau’s insured); and, authorized the disbursement of $100,000 received from Farm Bureau as settlement of the doubtful claim. Based on a subrogation dispute, the chancellor ordered the sum of $26,222.79, representing the amount of medical expenses, to be held in the registry of the court until the subrogation issue had been resolved by the court. After the authorized payment of attorneys’ fees, the remaining settlement proceeds of $39,837.88 were placed into an authorized account for Courtney’s benefit. Courtney’s lawyer filed an amended petition for authority to compromise the minor’s doubtful claim, joining Travelers as a respondent. Travelers was added as a defendant and Courtney asserted a claim of bad faith against Healthcare Recoveries, Inc., a recovery service for healthcare insurance payors, and Travelers. HRI removed this case to federal court, only to have a federal judge later remand the case back to state court. When Courtney reached her eighteenth birthday, the chancellor terminated the guardianship, and the remaining monies (exclusive of the escrowed amount of $26,222.79) were released from the guardianship account. Travelers filed a motion for summary judgment which the court denied. Travelers did not appeal. The chancellor found that the actions of HRI/Travelers did not constitute bad faith and that the proof was insufficient to show any harm or injury which was suffered in the ultimate settlement of the case by HRI/Travelers’s activities during the negotiation process. The chancellor entered a judgment denying Courtney’s claims, and Courtney appeals. |
| Summary of Opinion Analysis: | Issue 1: Tortious interference Courtney argues that HRI and Travelers tortiously interfered with her settlement with Farm Bureau by means of gross negligence and intentional misrepresentation that contractual subrogation existed as a basis for its claim, when such did not in fact exist in the policy. The elements of intentional or fraudulent misrepresentation are a representation, its falsity, its materiality, the speaker’s knowledge of its falsity or ignorance of its truth, his intent that it should be acted on by the hearer and in the manner reasonably contemplated, the hearer’s ignorance of its falsity, his reliance on its truth, his right to rely thereon, and his consequent and proximate injury. Travelers and HRI did not tortiously interfere with the settlement through gross negligence or intentional misrepresentation, because Courtney suffered no damages from the incorrect assertion of contractual subrogation. As the chancellor found, Courtney’s decision to settle the case was not prompted by the actions or false information of the respondents, and there was no evidence that the respondents’ actions had any impact on the amount of the settlement. Issue 2: Equitable subrogation Even though Travelers and HRI eventually abandoned their contractual subrogation claim, they continued to pursue an equitable subrogation claim, which Courtney argues constituted bad faith on the part of Travelers and HRI. Travelers and HRI had a legitimate or arguable reason to believe that equitable subrogation might have been available to them, based on the Supreme Court’s language in Cooper Tire & Rubber Co. v. Striplin, 652 So. 2d 1102 (Miss. 1995). Additionally, requesting a court to decide whether equitable subrogation is a viable theory of recovery does not in itself equate to the commission of a willful or malicious wrong or action with gross and reckless disregard for the insured’s rights. |
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