make whole doctrine in Ohio

2012We agree. {¶9} In Northern Buckeye Education Council Group Health Benefits Plan v. Lawson, 103 Ohio St.3d 188 , 2004-Ohio-4886 , the Supreme Court held the following at syllabus: {¶10} "A provider of health-insurance benefits and an insured who has been injured by an act of a third party may agree prior to payment of medical benefits that the insured will reimburse the insurer for any amounts later recovered from that third party, third party's insurer, or any other person through settlement or satisfaction of judgment upon any claims arising from the third party's act.

2004In Northern Buckeye Educational Council Group Health Benefits Plan v. Lawson, 103 Ohio St.3d 188 , 2004-Ohio-4886 , the syllabus provides: "1.

2004It has determined that a plan may avoid the application of the rule only by including language that is “clear in establishing both a priority to the funds recovered and a right to any full or partial recovery.” (Emphasis sic.) Copeland Oaks v. Haupt (C.A.6, 2000), 209 F.3d 811, 813 ; accord Hiney Printing Co. v. Brantner (C.A.6, 2001), 243 F.3d 956 . {¶ 27} We adopt the Copeland Oaks standard applied by the Sixth Circuit.

2004The make-whole rule provides "that an insurer cannot enforce its subrogation [or reimbursement] rights unless and until the insured has been made whole by any recovery, including any payments from the insurer." Copeland Oaks, 209 F.3d at 814 .

2003Co. v. Ohayon (1999), 73 F.Supp.2d 862 , the United States District Court for the Northern District of Ohio, Eastern Division, held that the absence of certain clear disclosures in a subrogation agreement would create ambiguity and, thereby, necessitate the application of the make-whole doctrine.

2003Co. v. Ohayon (1999), 73 F. Supp.2d 862 , 867 . 3 The Court, in Ohayon, specifically held, in part, as follows: {¶ 24} "Although this language gives Community Insurance a right to subrogation or reimbursement against claimants who recover damages from third parties, the language does not clearly define these rights. . . .

2006"While subrogation and reimbursement may have similar effects, they are distinct doctrines." Unisys Medical Plan v. Timms, 98 F.3d 971 , 973 (7th Cir. 1996).

2006Pilot Life, 481 U.S. at 41 .

2004Therefore, the make-whole rule is inapplicable as the reimbursement language is unambiguous. {¶ 22} Appellant asserts that the United States Supreme Court case Great West Life Annuity v. Knudson (2002), 122 S.Ct. 708 , does not allow a plan or plan's administrators to seek legal relief, namely the imposition of personal liability on its employee's contractual obligation to subrogate and/or reimburse, against a plan participant.

2004Where various written documents exist, it is the court’s duty to interpret their meaning, and reach a decision by using the usual tools of contractual interpretation (e.g., the written documents, the intent of the parties, and the acts of the parties) and not by a determination of what is fair, equitable, or just.” 25 Ohio St.2d at 239-240 , 54 O.O.2d 361 , 267 N.E.2d 769 . {¶ 21} We have, however, applied the make-whole doctrine in cases where an insurer’s subrogation is based in contract but the contract does not specify whether the insurer or the insured has priority to the recovered funds.

2004Where various written documents exist, it is the court’s duty to interpret their meaning, and reach a decision by using the usual tools of contractual interpretation (e.g., the written documents, the intent of the parties, and the acts of the parties) and not by a determination of what is fair, equitable, or just.” 25 Ohio St.2d at 239-240 , 54 O.O.2d 361 , 267 N.E.2d 769 . {¶ 21} We have, however, applied the make-whole doctrine in cases where an insurer’s subrogation is based in contract but the contract does not specify whether the insurer or the insured has priority to the recovered funds.

2004A reimbursement agreement between an insured and a health-benefits provider clearly and unambiguously avoids the make-whole doctrine if the agreement establishes both (1) that the insurer has a right to a full or partial recovery of amounts paid by it on the insured's behalf and (2) that the insurer will be accorded priority over the insured as to any funds recovered." Thus, the court, noting that courts should not rewrite contracts, clarified its earlier decision in Blue Cross Blue Shield Mut. of Ohio v. Hienko (1995), 72 Ohio St.3d 120 , 647 N.E.2d 1358 .

2004A reimbursement agreement between an insured and a health-benefits provider clearly and unambiguously avoids the make-whole doctrine if the agreement establishes both (1) that the insurer has a right to a full or partial recovery of amounts paid by it on the insured's behalf and (2) that the insurer will be accorded priority over the insured as to any funds recovered." Thus, the court, noting that courts should not rewrite contracts, clarified its earlier decision in Blue Cross Blue Shield Mut. of Ohio v. Hienko (1995), 72 Ohio St.3d 120 , 647 N.E.2d 1358 .