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Samsel v. Allstate Insurance Co.2/27/2001
AFFIRMED
This appeal asks us to determine whether the medical payments coverage of an automobile insurance policy issued by Allstate Insurance Company covers accident-related health care expenses of its insured, Lisa Samsel, even though most of the expenses were covered by her health care services organization (HMO). Based on the following undisputed facts, we conclude that the policy covers those expenses.
Lisa sustained injuries in an automobile accident and was taken by ambulance to University Medical Center (UMC), where she received medical care and signed a "Conditions of Admission" form, agreeing "to pay all of [her UMC] charges as and when billed." At the time, Lisa was enrolled in Partners Health Plan, an HMO governed by the provisions of A. R.S. ยงยง 20-1051 through 20-1077. Lisa was also an insured under her parents' Allstate automobile policy. Although the policy included medical payments coverage, for which the parents paid an additional premium, Allstate paid only those hospital and medical charges that were not covered by Lisa's HMO and denied coverage on the remaining charges billed to Lisa, asserting that because her HMO was obligated to pay them, Lisa had not "actually incurred" those charges, as required by the policy.
Lisa and her parents sued Allstate, alleging breach of contract, bad faith, and other claims. After both parties moved for summary judgment on the breach of contract claim, the trial court granted summary judgment in favor of Lisa and her parents and expressly entered final judgment pursuant to Rule 54(b), Ariz. R. Civ. P. , 16 A. R. S. The trial court then denied Allstate's motions for a new trial and discovery. T his appeal followed.
"Our standard of review for a grant of summary judgment is de novo for both factual and legal determinations." Aranki v. RKP Inv. , Inc. , 194 Ariz. 206, , 979 P. 2d 534, (App. 1999). A trial court properly grants summary judgment when "there is no genuine issue as to any material fact and . . . the moving party is entitled to a judgment as a matter of law. " Ariz. R. Civ. P . 56(c). See also Orme School v. Reeves, 166 Ariz. 301, 802 P.2d 1000 (1990).
The trial court granted summary judgment based primarily on Coconino County v. Fund Administrators Ass'n, Inc., 149 Ar iz. 427, 719 P. 2d 693 (App. 1986). There, a high school student had been injured while participating in an interscholastic wrestling meet. Because the student was eligible for county medical care, however, the administrator for the group insurance policy covering the event refused reimbursement for the student's hospital expenses, arguing that the policy provided reimbursement "only for 'expenses actually incurred' by the covered person. " Id. at 430, 719 P.2d at 696. Division One of this court rejected the argument, finding that "' ncur ' is generally accepted to mean 'to become liable for', not 'to pay for'" and that the hospital admission form signed by the student's legal guardian "expressly provided that [the student] and his guardian were the ultimate guarantors of the treatment costs." Id., quoting Collins v. Farmers Ins. Exch., 135 N. W.2d 503, 507 (Minn. 1965). The court thus held that because the hospital "could have pr oceeded against [the student] . . . and sought payment, " he "did actually incur expenses during his hospitalization. " Id.
Other courts have reached a similar conclusion. For example, in Hermitage Health and Life Insurance Co. v. Cagle, 420 S. W.2d 591, 593 (Tenn. Ct. App. 1967), the court observed: "We believe the word 'incur' means 'to become liable for' and does not mean to actually 'pay for' as insisted by the defendant [insurance company]." And, in Dillione
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