Pierce and Dominguez: Legislative Interpretation and Judicial Inconsistency at Work
By David White
Two decisions handed down by the Supreme Judicial Court in early March, 1999, demonstrate the wide variety of techniques used by the court when interpreting statutes. Though separated by just one day, the two cases represent the opposite poles of statutory interpretation despite clear statutory language in each case. Both cases yielded similar results: The insurers' arguments were accepted, and longstanding practices in the field of personal injury were drastically altered.
The two cases were Pierce v. Christmas Tree Shops, 429 Mass. 91 (1999) and Dominguez v. Liberty Mutual Insurance Company, 429 Mass. 112 (1999). The Pierce case concerned the interpretation of the medical lien statute, and the Dominguez case concerned the interpretation of the personal injury protection statute.
No Imagination Required. In Pierce, the court made short work of plaintiff's contention that she was entitled to a reduction of a medical care lien under G.L. c. 111, § 70A-70D. The underlying facts were straightforward. Ms. Pierce suffered personal injury while shopping at the defendant's premises as a result of the defendant's negligence. She incurred significant medical bills, which were paid by her medical provider, Harvard Pilgrim Health Care of New England. The case settled shortly before trial.
Difficulties arose when the medical insurer refused to accede to plaintiff's request for a reduction of the lien. Plaintiff filed a motion in Superior Court for determination of the lien amount, and the judge determined that HPHC should bear a proportional share of the attorney's fees, namely one-third as provided by the plaintiff's contingent fee agreement.
Of course, this result was in harmony with common practice among plaintiffs and medical lien holders; plaintiff's counsel typically requested and received reductions in the liens of insurers and hospitals. These reductions were in consideration of the work performed by plaintiff's counsel, as well as in consideration of the fact that a compromise of the lien was often the necessary ingredient to allow the case to settle, guaranteeing some measure of satisfaction to all. Equitable principals were at work as well. Lien holders recognized that fees were incurred to recover on their behalf. As with workers' compensation liens (G.L. c. 152, § 15) and Medicare liens 42 C.F.R. § 411.37, which provide a specific statutory framework for sharing attorney's fees, medical lien holders consistently recognized the equitable duty to share the burden of counsel fees.
The equitable considerations had no sway with the Supreme Judicial Court. Instead, the court resorted to a very precise statutory interpretation of the language of the statute. Finding no express provision for payment of attorney's fees or costs, the court completely rejected plaintiff's arguments for relief. The court also, in a portentous footnote, rejected the notion that the subrogation clause in the insurance contract should be the basis for relief. The court reasoned that, although subrogation is an equitable doctrine, the contract is silent as to attorney's fees, leaving the plaintiff responsible for them.
The court's decision was a grave disappointment to the plaintiffs' bar, and it upset decades of tradition and practice. Two net results are obvious: Plaintiffs will recover less, and cases will become more difficult to settle. But at the same time, the basis for the court's unanimous decision was clear: Both the contract and the statute were silent on the matter of attorneys' fees and costs. The court quoted a number of cases in support of its method of statutory interpretation. "'We cannot interpret a statute so as to avoid injustice or hardship if its language is clear and unambiguous and requires a different construction' . . . 'If the Legislature has intentionally omitted a provision from a statute, no court may then reintroduce it.'" Pierce at 93, quoting (respectively) Rosenbloom v. Kokofsky, 373 Mass. 778, 780-781 (1977), Bay State Gas Co. v. Local No. 273, Util. Workers Union, 415 Mass. 72, 75 (1993). These standards would have seemed applicable to other matters pending before the court.
What a Difference A Day Makes. After reading Pierce, one was left with the conviction that our court would, at least, hew to a straightforward line regarding interpretation of the plain language in insurance statutes. Instead, on the following day the court delivered its opinion in Dominguez, in which it subscribed to a completely different set of standards for statutory interpretation. Dominguez concerned the interpretation of the definitions in the Personal Injury Protection statute, G.L. c. 90, § 34A. The plaintiff, Mr. Dominguez, was the victim of an automobile accident. As a result of the car crash, she incurred medical expeneses. The first $2,000 of his medical bills was covered, without question, by the PIP carrier, Liberty Mutual. The bill for the balance was rejected by the Liberty Mutual since it had not been submitted to the health maintenance organization, Harvard Community Health Plan. HCHP rejected the bill because the provider was outside of the group. Liberty Mutual then rejected the bill, arguing the plaintiff was required to treat within his plan.
The statutory language in § 34A, the section which provides definitions regarding the PIP statutes, is very simple and clear. In pertinent part, in the subsection for the definition for "personal injury protection," it reads, "Nothing in this subsection shall be construed to compel a claimant to renew or maintain any policy of insurance in force prior to receipt of the said tender, or to interfere in any way with the claimant's choice of physician or course of medical treatment." Unfortunately, the majority of the court reasoned away the broad application of that sentence.
Instead of turning to the plain meaning of the sentence, the court looked first to the overall intent of the PIP statute, which the court determined was to control the costs of compulsory auto insurance. The court next determined that there was a "mandate" that claimants utilize existing health insurance for medical expenses that exceed the $2,000 PIP limit. The court then determined that the word "subsection" in the portion of § 34A quoted above applied only to the last three sentences of the paragraph in which it was found, rather then the entire paragraph, and rather than the entire logical subsection of § 34A concerning the definition of "personal injury protection." Continuing, the court reasoned that any shifting of expenses to the PIP carrier would "frustrate" the goal of the statute. Dominguez at 116-117
The strained reasoning of the statute and its legislative history was certainly bad enough. The court did not end there. Instead, the majority pronounced that Mr. Dominguez had failed to cooperate and deal in good faith with his insurance companies, and had violated the applicable law. Id. at 118.
There was a sharp dissent, authored by Justice Ireland, and joined by Justice Lynch. As the dissent points out, the statute was susceptible to a much more sensible reading, one that preserved the overall statutory scheme of coordinating benefits, but also providing coverage for all reasonable expenses, including expenses outside of the medical plan, incurred as a result of an automobile accident. The dissent also illustrated the flaws in majority's assessment of the intent of the statute. "The amendment was intended to stop insured parties from receiving double recoveries, not to complicate the inured party's ability to obtain payment for medical-related expenses." Dominguez at 120, citing Creswell v. Medical W. Community Health Plan, Inc., 419 Mass. 327, 329-330 (1995).
The dissent also correctly realized the magnitude of the injustice worked by the majority opinion. "Given the absence of notice to policyholders to date, we should not permit our decision to deny coverage of benefits to policyholders for injuries already suffered and for medical treatment already received." Dominguez at 120.
The result is, again, a shock to the plaintiff's bar. Roughly ten years of practice regarding coordination of benefits was turned on its head. There are many injustices worked by the result of the case. The biggest of these is that claimants with limited health insurance are left with the most limited options for health care, while claimants with no health insurance have no limitations whatsoever on their choice of providers. The decision left an important question unanswered: How will bills for care outside of the health plan be covered? In other words, if the health plan does not provide coverage for a service, such as physical therapy, will the PIP carrier still be obligated to cover that service? Arguments can be made either way based on the language of Dominguez.
Conclusion. These most recent cases demonstrate again the determination of the court to construe insurance statutes in a manner which achieves the purpose of keeping insurance rates low. While this may be a laudable goal, it certainly constitutes an intrusion into the legislative arena. This is especially so where, as in Dominguez, the statutory language, nearly a decade of practice, and significant consumer interests militate against the court's conclusion. Sadly, once again, it is the unfortunate victims of accidents who bear the burdens of the court's decisions.
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