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Bayham v. State

Court of Appeals of Louisiana, First Circuit

August 29, 2019

LYNETTE BAYHAM AND ADAM BAYHAM
v.
STATE OF LOUISIANA, THROUGH THE OFFICE OF GROUP BENEFITS

          Appealed from the 19th Judicial District Court In and for the Parish of East Baton Rouge State of Louisiana Docket No. C628132 The Honorable Judge Wilson E. Fields Presiding

          Lindsey J. Leavoy Baton Rouge, Louisiana Counsel for Plaintiff/Appellant Lynette Bayham

          Marjorie G. O' Connor Tameika Richard Paul Holmes Baton Rouge, LA Counsel for Defendant/Appellee State of Louisiana, through the Office of Group Benefits

          BEFORE: WHIPPLE, C.J., WELCH, AND LANIER, JJ

          LANIER, J.

         In the instant appeal, the plaintiff/appellant, Lynette Bayham, challenges the judgment of the Nineteenth Judicial District Court in favor of the defendant/appellee, the State of Louisiana through the Office of Group Benefits OGB), which awarded OGB $ 32, 252.74, with judicial interest and costs. For the following reasons, we affirm.

         FACTS AND PROCEDURAL HISTORY

         On June 13, 2012, Lynette Bayham and her adult son Adam were involved in an automobile accident on La. Hwy. 44 in Ascension Parish. Adam was operating his vehicle with Mrs. Bayham as his passenger, when they were rear-ended by another vehicle. Mrs. Bayham and her son were both injured in the accident.

         As a result of the accident, on December 6, 2012, Mrs. Bayham underwent a primary anterior interbody fusion from C5 to C7 with discectomy at C5-C6 and C6-C7. Treatment for her accident-related injuries was completed by December 31, 2013. Mrs. Bayham's past medical expenses totaled $105, 432.61. From the time of the accident until December 31, 2013, Mrs. Bayham had health coverage through OGB under its HMO plan. OGB issued medical benefits to Mrs. Bayham in the amount of $32, 252.74 for treatment of her accident-related injuries.

         The OGB HMO plan under which Mrs. Bayham was covered contained a "Subrogation and Reimbursement" section, which read as follows:

Subrogation and Reimbursement
Upon payment of any eligible Benefits covered under this Plan, the Office of Group Benefits shall succeed and be subrogated to all rights of recovery of the covered Employee, his Dependents or other Covered Persons, or their heirs or assigns, for whose benefit payment is made, and they shall execute and deliver instruments and papers and do whatever is necessary to secure such rights, and shall do nothing after loss to prejudice such rights.
The Office of Group Benefits has an automatic lien against and shall be entitled, to the extent of any payment made to a covered Employee, his Dependents or other Covered Persons, to 100% of the proceeds of any settlement or judgment that may result from the exercise of any rights of recovery of a covered Employee, his Dependents or other Covered Persons, against any person or entity legally responsible for the disease, illness, accident or injury for which said payment was made.
To this end, covered Employees, their Dependents, or other Covered Persons agree to immediately notify the Office of Group Benefits of any action taken to attempt to collect any sums against any person or entity responsible for the disease, illness, accident, or injury.
These subrogation and reimbursement rights also apply when a Covered Person recovers under, but not limited to, an uninsured or underinsured motorist plan, homeowner's plan, renter's plan, medical malpractice plan, worker's compensation plan or any general liability plan.
Under these subrogation and reimbursement rights, the Office of Group Benefits has a right to first recovery to the extent of any judgment, settlement, or any payment made to the covered Employee, his Dependents or other Covered Persons. These rights apply regardless of whether such recovery is designated as payment for, but not limited to, pain and suffering, medical benefits, or other specified damages, even if he is not made whole (i.e., fully compensated for his injuries).

         Mrs. Bayham received a total of $155, 000.00 in insurance proceeds as a result of the accident. The insurance proceeds were comprised of the following: $5, 000.00 medical payments coverage limits from Progressive Insurance Company (Progressive), Mrs. Bayham's insurer; $50, 000.00 bodily injury coverage limits from State Farm Insurance Company (State Farm), the insurer of the at-fault driver; and $100, 000.00 underinsured bodily injury coverage limits from Progressive. Upon receiving these payments, Mrs. Bayham and her son released the at-fault driver, State Farm, and Progressive from all liability related to the accident.

         On several occasions, OGB issued notices to Mrs. Bayham and her son of its reimbursement/subrogation rights in relation to the medical expense payments. In response, Mrs. Bayham and her son sent letters to OGB, in which they informed OGB that their case had been settled, but that OGB was not entitled to any of the settlement funds pursuant to the "Make Whole" doctrine. Nevertheless, Mrs. Bayham and her son stated that the proceeds were being kept in a trust account in case it was later determined that OGB was entitled to any of the proceeds. Mrs. Bayham also requested from OGB any statutory or legal authority that established OGB's entitlement to the funds. Mrs. Bayham and her son alleged that OGB never responded to their letters.

         Mrs. Bayham and her son filed a petition for declaratory judgment on February 6, 2014, requesting the district court to rule that, given their contention that the settlement funds had not fully remedied their injuries from the accident, and pursuant to the "make whole" doctrine, OGB was barred from recovering any of the settlement funds. OGB filed a reconventional demand on March 7, 2014, claiming that OGB was entitled to recover all of the medical benefits it had issued to Mrs. Bayham and her son.

         After a hearing on April 10, 2018, the district court signed a judgment on May 29, 2018 in favor of OGB in the amount of $32, 252.74, plus judicial interest and costs. Mrs. Bayham has appealed this judgment.[1]

         ASSIGNMENTS OF ERROR

         Mrs. Bayham alleges the following assignments of error:

1. The district court abused its discretion in "essentially" ruling Mrs. Bayham's damages were only ...

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