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COURT OF APPEALS DECISION DATED AND RELEASED October 3, 1995 |
NOTICE |
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A party may file with the
Supreme Court a petition to review an adverse decision by the Court of
Appeals. See § 808.10 and
Rule 809.62, Stats. |
This opinion is subject to
further editing. If published, the
official version will appear in the bound volume of the Official Reports. |
No. 95-1648-FT
STATE
OF WISCONSIN IN COURT OF
APPEALS
DISTRICT III
SCOTT A. ROBINSON and
PHYLLIS M. ROBINSON,
his wife,
Plaintiffs-Appellants,
STATE FARM MUTUAL
AUTOMOBILE
INSURANCE COMPANY,
Plaintiff,
MASSACHUSETTS MUTUAL
LIFE INSURANCE
COMPANY,
Plaintiff-Respondent,
v.
STEPHANIE A. VISSERS,
NORBERT L. VISSERS and
AMERICAN STANDARD
INSURANCE
COMPANY OF WISCONSIN,
Defendants.
APPEAL from a judgment
of the circuit court for Oneida County:
MARK A. MANGERSON, Judge. Affirmed.
Before Cane, P.J.,
LaRocque and Myse, JJ.
PER CURIAM. Scott A. Robinson and
Phyllis M. Robinson appeal a judgment determining that the Massachusetts Mutual
Life Insurance Company (MassMutual) was entitled to subrogation rights.[1] The trial court concluded that the Rimes[2]
made whole doctrine was inapplicable because the policy was part of an employee
benefit plan subject to the federal Employee Retirement Income Security Act of
1974 (ERISA), which preempts state law.
The Robinsons contend that the plan was not subject to ERISA because the
plan purchased stop-loss coverage. The
Robinsons further contend that, even if the plan is subject to ERISA, the
language of the policy makes the claim subject to the Rimes made
whole doctrine. Because we conclude
that the plan was subject to ERISA and the language of the policy did not
subject the claim to the Rimes made whole doctrine, we affirm the
judgment.
The Robinsons were
injured in an automobile accident due to the negligence of Stephanie A.
Vissers. At the time of the accident,
the Robinsons were covered by an employee benefit plan sponsored by Scott
Robinson's employer, Marcus Cable Management, Inc. The plan was uninsured; however, Marcus purchased stop-loss
coverage from MassMutual for claims exceeding a certain amount. In addition, MassMutual and Marcus entered
into an agreement whereby MassMutual provided claim administration and processing
services to Marcus.
The Robinsons reached a
settlement agreement in their negligence claim against the defendants. MassMutual, as claims administrator, sought
reimbursement for health care benefits paid to the Robinsons under the plan. The Robinsons moved the trial court for a Rimes
hearing to determine whether MassMutual was entitled to subrogation, alleging
that they had not been made whole by the settlement. The trial court granted MassMutual's motion for summary judgment
on the grounds that its subrogation claim was not subject to the Rimes
doctrine because it was an uninsured employee benefit plan governed by ERISA
which preempts Wisconsin state law.
We review a grant of
summary judgment de novo. Dailey
v. Secura Ins. Co., 164 Wis.2d 624, 628, 476 N.W.2d 299, 300 (Ct. App.
1991). Summary judgment methodology has
been set forth numerous times and it need not be repeated here. See Grams v. Boss, 97
Wis.2d 332, 338, 294 N.W.2d 473, 476 (1980).
The Robinsons contend
that the plan is not governed by ERISA because the plan purchased stop-loss
insurance from MassMutual. We
disagree. It is settled law that the
purchase of stop-loss coverage does not convert a self-funded, uninsured plan
to an insured plan for purposes of determining ERISA preemption. Ramsey County Medical Ctr. v. Breault,
189 Wis.2d 269, 277-78, 525 N.W.2d 321, 325 (Ct. App. 1994). When the employee benefit plan is uninsured,
ERISA preempts state subrogation laws including the Rimes made
whole doctrine. Id. Because ERISA applies to this plan and ERISA
permits subrogation without regard to the rule of law applicable in the state,
we conclude the trial court properly permitted subrogation without regard to
the Rimes made whole doctrine.
The Robinsons further
contend that the language of the plan's reimbursement clause requires
application of the Rimes made whole doctrine. The interpretation of an insurance policy
presents a question of law that we determine independent from the trial
court. Allstate Ins. Co. v.
Gifford, 178 Wis.2d 341, 346, 504 N.W.2d 370, 372 (Ct. App. 1993).
The Robinsons quote the
language: "[t]he purpose of this provision is to prevent duplication of
benefits payable under the group plan."
They read the language as a limitation on the subrogation clause and
contend that the contract itself would preclude subrogation if they were not
made whole by the settlement. We
disagree. First, subrogation is
provided for under ERISA and because this is an ERISA controlled plan,
subrogation would be applicable.
Second, the language cited is not a limitation on recovery but an
explanation as to the reason subrogation rights are included in the
contract. Finally, additional language
in the clause states that the covered person agrees "to reimburse the insurer
the benefits advanced under the group plan, up to the amount of any recovery
received from the third party."
(Emphasis added.) Accordingly,
we conclude that the unambiguous language of the plan does not subject the
claim to the Rimes made whole doctrine.
Because we conclude the
plan is governed by ERISA which preempts state law and the language of the plan
does not subject the Robinsons' claim to the Rimes made whole
doctrine, we affirm the judgment.
By the Court.—Judgment
affirmed.
This opinion will not be
published. See Rule 809.23(1)(b)5, Stats.