    IN THE COURT OF APPEALS FOR THE STATE OF WASHINGTON



KING COUNTY, a municipal
corporation,                                       No. 68226-1-1


                      Respondent,
                                                   DIVISION ONE
              v.



                                                   UNPUBLISHED OPINION
JOHN J. JONES and MARY ANN
MORBLEY JONES,

                     Appellants.                   FILED: August 26. 2013



       Spearman, A.C.J. — Under the "made whole" doctrine, an insurer is entitled to

reimbursement from an insured who recovers from a tortfeasor, but only for the excess

remaining after the insured is fully compensated for his loss. Where an insured accepts

a settlement of less than policy limits, that is evidence the insured was fully     ^

compensated, i.e., "made whole."                                                   g     ;^P

       Here, King County came forward with evidence on summary judgmenfthat Jcflnr

Jones and Mary Ann Morbley Jones accepted a settlement oftheir claims thajwas^ss
                                                                                  Co    -;'r
than the limits of the tortfeasor's liability policy. Because the Joneses failed tft^ebut this

evidence, the trial court did not err in concluding King County was entitled to

reimbursement for medical payments. Accordingly, we affirm the order granting King

County's motion for summary judgment.
No. 68226-1-1/2




                                           FACTS


       John Jones injured his ankle while on a Hendrickx Construction worksite. After

filing suit against Hendrickx Construction, Inc., Jones settled with Hendrickx's liability

carrier, Contractors Bonding and Insurance Company ("CBIC"). Jones' settlement

amount was $610,000, of which $152,000 was apportioned to his wife Mary Ann

Morbley Jones for her loss of consortium, wage loss, and other claims. The CBIC policy

had coverage limits of $1,000,000.

       Jones' medical costs, which are not in dispute here, totaled $46,315.98, and

were paid as medical benefits by King County. Jones received these benefits because

his wife worked for King County and enrolled in KingCare, one of the two medical

benefits plans available to employees of King County. The KingCare plan is a self-

funded government medical benefits program.

       A provision in the KingCare plan provides that, when a person covered by the

plan obtains a recovery for an injury caused by a third party, King County is entitled to

reimbursement:


       When you or your covered dependent is injured or becomes HI
       because of the actions or inactions of a third party, KingCare may
       cover your eligible medical and prescription drug expenses.
       However, to receive coverage, you must notify the plan that your
       illness or injury was caused by a third party, and you must follow
       special plan rules....



       By accepting plan benefits to pay for treatments, devices, or other
       products or services related to such illness or injury, you agree that
       KingCare SM:
No. 68226-1-1/3


        • has an equitable lien on any and all monies paid (or payable to)
        you or for your benefit by any responsible party or other recovery to
        the extent the plan paid benefits for such illness or injury; [and]

        • may appoint you as constructive trustee for any and all monies
        paid (or payable to) you or for your benefit by any responsible party
        or other recovery to the extent the plan paid benefits for such illness
        or injury;



        If you (or your attorney or other representative) receive any payment
        from the sources listed below-through a judgment, settlement or
        otherwise-when an illness or injury is the result of a third party, you
        agree to place the funds in a separate, identifiable account and that
        KingCareSM has an equitable lien on the funds, and/or you agree to
        serve as constructive trustee over the funds to the extent the plan
        has paid expenses related to that illness or injury. This means that
        you will be deemed to be in control of the funds.

        You must repay KingCareSM first, in full, outof such funds for any
        health care expenses the plan has paid related to such illness or
        injury. You must repay KingCare up to the full amount of the
        compensation you receive from the responsible party, regardless of
        whether your settlement or judgment says that the money you
        received (all or part of it) is for health care expenses.

        Furthermore, you must repay KingCareSM whether the third party
        admits liability and whether you've been made whole or fully
        compensated for your injury. If any money is left over, you may keep
        it.

        Additionally, KingCareSM isn't required to participate in or contribute
        to any expenses or fees (including attorneys' fees and costs) you
        incur in obtaining the funds.

Clerk's Papers (CP) at 35-41.

        After King County's subrogation agent, the Rawlings Company LLC, learned that

Jones had obtained a $610,000 settlement, it sought reimbursement for King County.

Jones refused to reimburse the County, and the County filed suit against Jones and his

wife.
No. 68226-1-1/4




      The County moved for summary judgment. The Joneses responded that the

County was precluded from recovering under the "made whole" doctrine, which

precludes an insurer from being reimbursed for personal injury protection payments until

the insured has been made whole. They also sought a continuance under CR 56(f). The

County argued it was not an insurer.

      At the summary judgment hearing, the trial court questioned whether it needed to

decide if King County was an insurer, because if Jones had been made whole, then the

County was entitled to reimbursement regardless of the County's status as an insurer.

The trial court granted the Jones' CR 56(f) motion to continue, and ordered the County

to provide copies of all KingCare plans for the years 2006-2008, along with notices to

employees about any changes to the KingCare plan, between those years. The court

set the new hearing date for the summary judgment motion six weeks out, and allowed

the Joneses and King County to submit supplemental briefing on the motion. King

County produced the documents it was ordered to produce and filed a supplemental

brief. The Joneses did not file a supplemental brief, nor did they seek additional

discovery.

      After the second summary judgment hearing, the trial court granted the summary

judgment motion, ordering that "King County is entitled to be reimbursed $46,315.98,

minus an equitable share of the expenses and fees incurred in recovering those funds,"

plus its fees and costs for bringing the action. CP at 186-88. The Joneses appeal.
No. 68226-1-1/5




                                       DISCUSSION


       The Joneses chief argument on appeal is that the "made whole" doctrine applies

to bar King County's recovery of medical expenses it paid on behalf of Jones. We

disagree.

       The "made whole" doctrine was announced by our Supreme Court in Thirinqer v.

American Motors Ins. Co.. 91 Wn.2d 215, 219-20, 588 P.2d 191 (1978): see also Averill

v. Farmers Ins. Co. of Washington, 155 Wn. App. 106, 229 P.3d 830 (2010) (analyzing

Thiringer). In Thiringer, an insurer refused to pay personal injury protection (PIP)

benefits to its insured, and the insured settled with the tortfeasor. Jd. at 216-17. The

insured then demanded PIP benefits, arguing his damages exceeded the amount of the

settlement. Id. at 217. The Supreme Court affirmed the trial court, holding that the

settlement amount should first be applied to the insured's general damages and then, if

any excess remained, toward the payment of the special damages to which the PIP

coverage applied affirmed:

       The general rule is that, while an insurer is entitled to be reimbursed to
       the extent that its insured recovers payment for the same loss from a
       tort-feasor responsible for the damage, it can recover only the excess
       which the insured has received from the wrongdoer, remaining after the
       insured is fully compensated for his loss.

id. at 219.

       A large portion of the parties' briefs are devoted to whether the "made whole"

doctrine applies in this case. King County argues it does not because the County is not

an insurer and is therefore not subject to the doctrine. Thus the County contends it can
No. 68226-1-1/6




recover under its contract reimbursement from Jones regardless of whether he was

made whole. Jones, on the other hand, contends that subrogation "can arise without an

insurance policy or statute giving an insurer or any other party a right of subrogation or

reimbursement...." Reply Brief at 1. Each party cites numerous cases in support of

their respective positions, although none appears to directly address the issue of

whether the "made whole" doctrine applies to an entity that provides a self-funded

medical benefits program.

       The posture of this case, however, provides us no occasion to address the issue

of whether the "made whole" doctrine applies. Because, even if it did, the evidence

shows Jones was, in fact, made whole. Under Peterson v. Safeco Ins. Co. of Illinois, 95

Wn. App. 254, 976 P.2d 632 (1999), where an insured accepts a settlement of less than

policy limits, this is evidence that the insured was fully compensated:

       Farmers had $250,000 available to settle this claim. After negotiations
       and consultation with an experienced plaintiffs personal injury lawyer,
       Mr. Peterson accepted $20,000. And in exchange for that money, he
       fully released Farmers and Mr. Carroll from any further liability. He
       also agreed to indemnify them from any claim by Safeco for its PIP
       interest. Ifthe gross settlement did not reflect what Mr. Peterson, or
       his attorney, believed to be full compensation, then they had no
       obligation to accept it. They could have, instead, completed arbitration
       to have the question of full compensation decided.

Peterson, 95 Wn. App. at 259-60; see also Truong v. Allstate Property and Cas. Ins.

Co., 151 Wn. App. 195,205,211 P.3d 430 (2009) ("Peterson shows that a settlement

with a tortfeasor for less than limits is evidence that the PIP recipient received full

compensation"). Truong at 205. In Troung, after the insurer set forth facts in a summary
No. 68226-1-1/7




judgment motion showing the insured accepted a settlement less than policy limits, the

court held the insured had the burden of rebutting that evidence:

      Allstate set forth facts showing that Truong freely accepted an arms-
      length settlement from Dinh in an amount less than the limits of
      Dinh's liability insurance. Such a settlement is some evidence, even
      if not irrefutable evidence, that the settlement fully compensated
      Truong.

             A nonmoving party in a summary judgment may not rely on
             speculation, argumentative assertions that unresolved factual
             issues remain, or in having its affidavits considered at face
             value; for after the moving party submits adequate affidavits,
             the nonmoving party must set forth specific facts that
             sufficiently rebut the moving party's contentions and disclose
             that a genuine issue as to a material facts exists.

       Seven Gables Corp. v. MGM/UA Entm't Co., 106 Wn.2d 1, 13, 721 P.2d 1
       (1986). Thus, Truong had the burden of rebutting that evidence by showing that
       his damages were greater than the amount he settled for. Truong did not meet
      this burden.

Troung. 151 Wn. App. at 201-02.

       Here, as was the case with the insured in Troung, Jones accepted a settlement

of $610,000, less than the $1,000,000 policy limits. After King County presented this

evidence in its motion for summary judgment, the burden shifted to Jones to come

forward with evidence that his damages were greater than the amount of settlement.

Although Jones' summary judgment response failed entirely to address this issue, the

trial court nevertheless gave Jones additional time. Indeed, the trial court granted Jones'

request for a continuance for that very purpose, and ordered the County to disclose

additional evidence, namely copies of all the KingCare plans for the years 2006-2008,

along with notices to employees about any changes to the KingCare plan between
No. 68226-1-1/8




those years. Jones, however, never filed a supplemental response, nor did he seek

additional discovery on this issue.

       In other words, Jones was unable to meet his burden; he provided no evidence

rebutting the County and failed to show "his damages were greater than the amount he

settled for." Truong. 151 Wn. App. at 202. Therefore, even if the "made whole" doctrine

applies in this case, the unrebutted evidence showed Jones was made whole, and King

County is not precluded from seeking reimbursement. The trial court did not err in

granting summary judgment.

       Affirmed.




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WE CONCUR:




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