COURTNEY HUDSON GOODSON
APPEAL FROM THE SEBASTIAN COUNTY CIRCUIT COURT, FORT SMITH DISTRICT [NO. CV-2011-1126]
HONORABLE J. MICHAEL FITZHUGH, JUDGE
REVERSED AND REMANDED.
COURTNEY HUDSON GOODSON , Associate Justice
Appellant Progressive Halcyon Insurance (Progressive) appeals an order of the Sebastian County Circuit Court granting summary judgment in favor of appellee Margarita Saldivar on the basis that Progressive was not entitled to subrogation benefits. For reversal, Progressive argues that the circuit court erred in granting Saldivar's motion for summary judgment on four separate grounds. We reverse and remand.
I. Facts
Progressive issued a motorcycle insurance policy to Brian McCallum that contained accident and healthcare coverage. The policy included a provision for subrogation of payments made for any injury caused by a third party. The subrogation language in the policy stated, "In the event of any payment under this policy, we are entitled to all the rights of recovery that the insured person to whom payment was made has against another after the insured person has been fully compensated for his or her loss."
On July 18, 2008, McCallum rode his 1996 Suzuki motorcycle and traveled northbound on North Eleventh Street in Fort Smith. Saldivar, driving a 1993 Chevrolet Astro, failed to yield at a stop sign and entered an intersection at North Eleventh and North G streets. At that moment, the two collided, causing McCallum to be thrown from the motorcycle. McCallum submitted a claim for no-fault medical benefits to Progressive pursuant to the personal-injury-protection provision of his motorcycle insurance policy. Progressive subsequently paid $2,677 to cover McCallum's medical expenses. Notably, McCallum did not file a suit in tort against Saldivar as the third-party tortfeasor. Subsequently, Saldivar pled guilty for failure to yield, and her insurance company, State Farm, paid for McCallum's property damage.
On July 6, 2011, Progressive filed a complaint, alleging Saldivar's negligence and seeking to receive subrogation benefits from Saldivar. Progressive based its claim on an Arkansas subrogation statute, Arkansas Code Annotated section 23-79-146 (Repl. 2004), which states that "any casualty insurer, accident and health insurer . . . shall be entitled to receive subrogation benefits from the third party." In its complaint, Progressive sought to recover the $2,677 paid to McCallum along with attorney's fees and costs. Saldivar answered and filed a motion to dismiss. The circuit court denied Saldivar's motion to dismiss.
On January 24, 2012, Saldivar filed a motion for summary judgment and argued that Progressive filed suit to recover the no-fault medical payments from her that Progressive had already paid as a first-party claim to McCallum. She alleged that, pursuant to Arkansas Code Annotated section 23-89-207 (Supp. 2011), the insured must "recover[] in tort for injury, either by settlement or judgment," before Progressive could recover any medical payments and that McCallum had not filed suit in tort or settled with Saldivar. She alleged that Progressive lacked standing to pursue subrogation or reimbursement. Further, Saldivar argued that Progressive was time-barred from suing in tort and requested the court to grant summary judgment. Two days later, Progressive responded that, pursuant to Rule 56(a), Saldivar should have filed her summary-judgment motion "no later than 45 days before any scheduled trial date." On February 6, 2012, the circuit court rejected Progressive's argument that it was entitled to subrogation benefits from Saldivar. In its order, the circuit court ruled as follows:
[Progressive] filed this suit to recover medical payments made to its insured. [Progressive's] insured has not filed suit over the accident and is now time barred from doing so. As a result, there is nothing before the court to show that the insured has been [made] whole. Nor has there been evidence of settlement and obviously no judgment has been rendered in favor of the insured.
For these reasons, the circuit court granted summary judgment and dismissed Progressive's case with prejudice. The next day, on February 7, Progressive filed a supplemental response to Saldivar's motion for summary judgment, noting that it had entered into an agreement with McCallum that he had been "made whole."
Subsequently, Progressive also filed a motion for new trial, claiming that the circuit court's order was submitted during Progressive's twenty-one-day response period to the motion for summary judgment and its supplemental response. In its motion, Progressive argued that if the court had waited the full twenty-one days before entering its order, the court could have considered its supplemental response and would have denied Saldivar's motion. Progressive also filed a motion to vacate the order. Saldivar responded to both. The circuit court denied the motions. Progressive timely filed its notice of appeal and now brings its appeal from the February 6, 2012 order granting summary judgment in Saldivar's favor.
Ordinarily, upon reviewing a circuit court's decision on a summary-judgment motion, we would examine the record to determine if genuine issues of material fact exist. Travis Lumber Co. v. Deichman, 2009 Ark. 299, 319 S.W.3d 239. However, in a case such as this one, which does not involve the question of whether factual issues exist but rather the application of legal rules, we simply determine whether Saldivar was entitled to judgment as a matter of law. Schultz v. Butterball, LLC, 2012 Ark. 163, ___ S.W.3d ___.
II. Subrogation v. Reimbursement Statutes
On appeal, Progressive argues that the circuit court erred in applying Arkansas Code Annotated section 23-89-207 to its claim against Saldivar. Progressive contends that the circuit court should have awarded recovery through subrogation, pursuant to section 23-79-146, as it affords relief of an insurer's right to subrogation against a third-party tortfeasor.
In response, Saldivar argues that Progressive, as an insurer issuing no-fault medical benefits, should have pursued McCallum's benefits through reimbursement. Saldivar further asserts that section 23-79-146 refers to subrogation generally while section 23-89-207, which references Arkansas Code Annotated section 23-89-202 (Repl. 2004), specifically governs recovery of no-fault medical payments. Saldivar maintains that section 23-89-207 allows for reimbursement only following a settlement or judgment, and section 23-79-146 does not contemplate such a scenario.
We duly note the distinction between subrogation and reimbursement. Subrogation is the substitution of one party for another. S. Farm Bureau Cas. Ins. Co. v. Tallant, 362 Ark. 17, 207 S.W.3d 468 (2005). The party asserting subrogation is making a demand under the right of another. Id. Because insurers pay the obligations of their insureds, a right in equity to subrogation in the insurers arises. Id. This assures against unjust enrichment of the insureds by way of double recovery. Shelter Mut. Ins. Co. v. Bough, 310 Ark. 21, 834 S.W.2d 637 (1992). An insurer is not entitled to subrogation unless the insured has been made whole for his or her loss. See id.; see also Franklin v. Healthsource of Ark., 328 Ark. 163, 942 S.W.2d 837 (1997). While subrogation and reimbursement are similar in their effect, they are different doctrines. Provident Life & Accident Ins. Co. v. Williams, 858 F. Supp. 907 (W.D. Ark. 1994). With subrogation, the insurer stands in the shoes of the insured. Id. With reimbursement, the insurer has a direct right of repayment against the insured. Id.
In order to resolve the issue presented, we must interpret the pertinent Arkansas statutes. We review issues of statutory construction de novo. Ryan & Co. AR, Inc. v. Weiss, 371 Ark. 43, 263 S.W.3d 489 (2007). It is for this court to decide what a statute means, and we are not bound by the circuit court's interpretation. Id. In determining the meaning of a statute, the first rule is to construe it just as it reads, giving the words their ordinary and usually accepted meaning in common language. Voltage Vehicles v. Ark. Motor Vehicle Comm'n, 2012 Ark. 386, ___ S.W.3d ___.
We now review the three relevant statutes at play. Progressive asserted its right to subrogation, relying on section 23-79-146, which provides as follows:
(a)(1) Any casualty insurer, accident and health insurer, health maintenance organization, self-funded group, multiple-employer welfare arrangement, or hospital or medical services corporation that issues, delivers, or renews a contract of accident and health insurance or individual or group accident and health care coverage containing a provision for subrogation for any benefits or services of any kind furnished to an insured, or for payments made or credit extended to or on behalf of any covered person for a physical condition or injury caused by a third party or for which a third party may be liable, shall be entitled to receive subrogation benefits from the third party.
(2) In the event that an insured or covered person recovers from a third party, reasonable cost of collection and attorney's fees thereof shall be assessed against the insurer and the insured in the proportion each benefits from the recovery.
(b) In the event more than one (1) casualty insurer, accident and health insurer, health maintenance organization, self-funded group, multiple-employer welfare arrangement, or hospital or medical services corporation having contractual subrogation rights is entitled to the subrogation benefits specified in subsection (a) of this section, reasonable cost of collection and attorney's fees thereof shall be assessed against the insurers and the insured in the proportion each benefits from the recovery.
In contrast, Saldivar asserts that Progressive should have sought the recovery of its no-fault medical benefits through reimbursement. Progressive paid no-fault medical benefits contemplated by section 23-89-202, which provides in pertinent part:
Every automobile liability insurance policy covering any private passenger motor vehicle issued or delivered in this state shall provide minimum medical and hospital benefits . . . to the named insured . . . as follows: (1) Medical and Hospital Benefits. All reasonable and necessary expenses for medical, hospital, nursing, dental, surgical, ambulance, funeral expenses, and prosthetic services incurred within twenty-four (24) months after the automobile accident.
Section 23-89-207 specifically provides for the recovery of such no-fault medical benefits and states as follows:
(a) Whenever a recipient of benefits under § 23-89-202(1) and (2) recovers in tort for injury, either by settlement or judgment, the insurer paying the benefits has a right of reimbursement and credit out of the tort recovery or settlement, less the cost of collection, as defined.
(b) All cost of collection thereof shall be assessed against the insurer and insured in the proportion each benefits from the recovery.
(c) The insurer shall have a lien upon the recovery to the extent of its benefit payments.
(d) The insurer for the party who is liable in damages to the injured party shall not condition settlement or payment of a judgment in favor of the injured party upon issuing a single check jointly to the injured party and the injured party's insurance company.
Here, the plain language of section 23-89-207 clearly mandates that an insurer's right of reimbursement from its insured only arises "[w]henever" no-fault medical benefits have been paid to the insured, pursuant to section 23-89-202, "and" the insured has recovered in tort for injury, either by settlement or judgment. The use of the conjunctive word "and" indicates that these criteria serve as prerequisites before an insurer shall have a right to reimbursement from its insured. Notably, section 23-89-207 does not provide an exclusive remedy in the case at bar. When McCallum failed to satisfy these criteria under section 23-89-207, Progressive then properly sought general "subrogation benefits from the third party," as permitted by section 23-79-146. Therefore, we hold that the circuit court erred in its interpretation of section 23-89-207 in conjunction with section 23-79-146. Because the circuit court erred in granting summary judgment on this basis, we reverse and remand. For this reason, we decline to reach the merits of appellant's remaining arguments.
Reversed and remanded.
The McHughes Law Firm, LLC, by: Josh E. McHughes, Becky A. McHughes, and Diane Torres-Porter, for appellant.
Munson, Rowlett, Moore & Boone, P.A., by: Mary Carole Crane, for appellee.