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Stout v. AMCO Insurance Co.6/13/2002
Jason Stout sustained injuries to his knees when a car insured by AMCO Insurance Company hit him. Stout was billed $25,638.73 by medical service providers for the treatment of his injuries. The amount billed was discounted pursuant to Medicaid and MinnesotaCare fee schedules, leaving a balance of $12,471.44. The parties agree that, under the Minnesota No-Fault Automobile Insurance Act, Minn. Stat. ยงยง 65B.41-.71 (2000), AMCO must reimburse Stout's loss. The sole issue on appeal is whether Stout's loss is equal to the amount originally billed or the post-discount balance. The district court and the court of appeals concluded that Stout was entitled to the amount originally billed. We affirm.
I.
Stout was hit by a car in July 1993, as he walked near a gas station in Wadena, Minnesota. Stout's legs were pinned between the car's front bumper and a metal guardrail, causing injuries to both of his knees. At the time of the accident, Stout did not have health insurance. He later applied for and received medical assistance benefits from the Department of Human Services (DHS) in the form of Medicaid and MinnesotaCare. The car that struck Stout was insured by AMCO. The limit of medical expense loss payable under AMCO's no-fault automobile insurance policy was $20,000.
In a letter dated April 25, 1995, Stout notified the car owner of his claims arising from the accident. AMCO was placed on notice of Stout's claims in late April or early May 1995, when it received a copy of Stout's letter. In May 1995, Stout submitted an application for no-fault benefits to AMCO. AMCO denied Stout's claim for benefits in November 1995, on the grounds that Stout's injuries were the result of an intentional act by the driver of the car rather than an accident, and that the car was not being used for transportation purposes when the accident occurred.
In February 1996, DHS notified AMCO that it had paid medical assistance benefits on Stout's behalf. DHS also filed a lien in the amount of $1,054.90, the amount it had paid to Stout's medical service providers up to that point, against any person or entity liable for damages arising out of the accident.
AMCO commenced a declaratory judgment action seeking confirmation of its denial of coverage. In July 1998, the district court entered an order granting judgment in favor of Stout and requiring AMCO to provide Stout "with all no-fault benefits to which he may be entitled." AMCO appealed the district court's order and the court of appeals affirmed.
In February 1999, while AMCO's appeal of the district court's order was pending in the court of appeals, Stout commenced the present action against AMCO to recover basic economic loss benefits and statutory interest under AMCO's no-fault automobile insurance policy and the Act. Approximately nine months later, Stout underwent arthroscopic surgery on his left knee. Prior to this surgery, most of Stout's medical treatment had been directed toward his right knee. AMCO, acting on the expert opinion of an orthopedic surgeon it hired to review Stout's medical records, took the position that the injury to Stout's right knee was caused by the accident, but the injury to his left knee was not.
In July 2000, AMCO issued a check to Stout in the amount of $4,831.27. The parties agree that this payment covered all of the medical expenses paid by the DHS and Stout for the treatment of Stout's right knee. It did not, however, cover the difference between the amount billed and the post-discount amount paid for the treatment of Stout's right knee, nor did it cover any of the medical expenses, either billed or paid, for the treatment of his left knee.
The next mo
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