                 IN THE COURT OF APPEALS OF TENNESSEE
                              AT JACKSON

                                    April 20, 2000 Session

          HEALTH COST CONTROLS, INC. v. RONALD GIFFORD

                  An Appeal from the Chancery Court for Weakley County
                       No. 15726    W. Michael Maloan, Chancellor



                    No. W1999-02598-COA-R3-CV - Filed April 24, 2001


This is an insurance case. The defendant sustained injuries in an automobile accident while riding
as a passenger in a car owned by his mother. The defendant’s insurance policy did not cover
expenses for injuries “when a person, other than the person for whom the claim is made, is
considered responsible for the sickness or injury.” Unaware of any third party responsible for the
accident, the insurance company paid part of the defendant’s medical bills. The defendant
subsequently recovered from his mother’s automobile insurance carrier. When the defendant’s
insurance company learned of the subsequent recovery, it filed suit seeking repayment of the amount
it paid for the defendant’s medical bills. The trial court granted summary judgment to the insurance
company, finding that it was entitled to recovery based on the policy. The defendant appeals. We
affirm, finding inter alia that a person need not be at fault in the automobile accident to be
“considered responsible” under the policy.

              Tenn. R. App. P. 3; Judgment of the Chancery Court is Affirmed.

HOLLY KIRBY LILLARD, J., delivered the opinion of the court, in which ALAN E. HIGHERS, J., and
DAVID R. FARMER , J., joined.

H. Max Speight, Dresden, Tennessee, for the appellant Ronald Gifford.

Thomas H. Lawrence and John M. Russell, Memphis, Tennessee, for the appellee Health Cost
Controls, Inc.

                                            OPINION

       In March 1997, Defendant/Appellant Ronald Gifford (“Gifford”) was injured in an
automobile accident while riding as a passenger in a car driven by his brother and owned by his
mother. Gifford had insurance coverage provided by Prudential Insurance Company (“Prudential”).
Gifford’s insurance policy with Prudential contained a provision limiting recovery for injuries
sustained as the result of the actions of a third party:

       BENEFIT MODIFICATION FOR THIRD PARTY LIABILITY

       This modifies any Coverage of the Group Contract that:

       (1) is a health care expense Coverage; or

       (2) provides weekly disability benefits.

       A. This Modification applies when a person, other than the person for whom a claim
          is made, is considered responsible for a Sickness or Injury. To the extent
          payment for the Sickness or Injury is made, or may be made in the future, by or
          for that responsible person (as a settlement, judgment or in any other way):

               (1) charges arising from that Sickness or Injury are not covered; and

               (2) benefits for any period of Total Disability resulting (in whole or in part)
                   from that Sickness or Injury are not payable.

       B. But when claim is received by Prudential, benefits which would be payable
          except for A above will be paid if:

               (1) payment by or for the responsible person has not yet been made; and

              (2) the Covered Person(s) involved (or if incapable, that person’s legal
                  representative) agrees in writing to pay back promptly the benefits paid
                  as a result of the Sickness or Injury to the extent of any future payments
                   made by or for the responsible person for the Sickness or Injury. The
                   agreement is to apply whether or not: (a) liability for the payments is
                          admitted by the responsible person; and (b) such payments are
       itemized.               A reasonable share of fees and costs incurred to obtain such
       payments                 may be deducted from amounts to be repaid to Prudential.

       C. Amounts due Prudential to repay benefits, agreed to as described in B. above,
          may be deducted from other benefits payable by Prudential after payments by
          or for the responsible person are made.

Although the provision generally denied coverage for medical expenses when a third party is
responsible for the injury, it allowed payment for such injuries if the responsible third party had not
yet paid and the insured agreed in writing to reimburse Prudential when the insured recovered from
the third party or from someone on the third party’s behalf.

                                                  -2-
        Prudential paid $37,795.08 in medical expenses on behalf of Gifford in connection with his
injuries. Gifford subsequently recovered $100,0001 from his mother’s insurance carrier, State Farm
Insurance Company, for the injuries he sustained in the accident. A State Farm claim affidavit states
that $44,000 of the $100,000 Gifford recovered from State Farm was for the medical expenses
incurred by Gifford in connection to the injuries he received in the accident; the remaining $56,000
was for Gifford’s pain and suffering. Gifford signed a full release with State Farm, discharging all
claims, including medical expenses, that he may have had against his mother and brother.

        Upon learning of Gifford’s recovery from State Farm, Plaintiff/Appellee Health Costs
Controls, Inc. (“HCC”), Prudential’s assignee for the purposes of investigating and prosecuting all
of Prudential’s rights and claims of reimbursement or overpayment of claims, initiated contact with
Gifford’s attorney seeking the $37, 795.08 Prudential paid for Gifford’s medical expenses. Gifford
refused to return the amount paid by Prudential. HCC then filed a lawsuit against Gifford seeking
return of the payment. HCC alleged that it was entitled to reimbursement of the payment because
Prudential had been unaware that there was a third party responsible for Gifford’s injuries and, as
a result, mistakenly overpaid Gifford for claims not covered under the policy. HCC later filed a
motion for summary judgment. In the motion, HCC asserted that the claims were not covered under
the terms of the Prudential policy and that Prudential overpaid Gifford based on a mistake of fact,
namely, that it was unaware that Gifford’s injuries were the responsibility of third party.

        The trial court found that the terms of the Prudential policy unambiguously denied coverage
for charges arising from an injury for which a third party is responsible and payment is made by the
responsible party by “settlement, judgment, or in any other way.” The trial court also found that it
was undisputed that Gifford was injured in an automobile accident, a portion of his medical expenses
were paid by Prudential, and that he “settled his personal injury claim with the automobile owner’s
insurance company, State Farm.” On this basis, the trial court granted HCC’s motion for summary
judgment and ordered Gifford to reimburse Prudential. From this grant of summary judgment,
Gifford now appeals.

         On appeal, Gifford argues that the trial court erred in granting HCC’s motion for summary
judgment because the trial court never determined whether there was a third party responsible for
his injuries. Gifford contends that, under the terms of the policy, reimbursement is required only
upon the determination that a third person was responsible for the injuries he sustained in the
accident and if he agrees, in writing, to pay back the amount received from Prudential. Gifford
asserts that the trial court never made the required determination that a third party was responsible
for the injuries he sustained. In the alternative, he argues that, even if the trial court had made such
a determination, he never agreed in writing to reimburse Prudential for the payment. In addition,
Gifford argues that the policy is ambiguous because it does not define the term “responsible person”

         1
            HCC’s amended complaint and memorandum in support of summary judgment state that Gifford recovered
$105,000 from State Farm. How ever, in an affidavit filed in support of HCC’s motion for sum mary ju dgme nt, State
Farm claim specialist Na ncy Th omas sta ted that State Farm p aid Giffo rd the po licy limit of $ 100,00 0. In addition, the
trial court, in its find ings of fac ts, also listed the su m as $1 00,000 .

                                                            -3-
or explain whether the third person must be at fault for causing the accident in which the injury
occurred in order to be “responsible” for the injury.

          On a motion for summary judgment, the court must take the strongest legitimate view of
the evidence in favor of the nonmoving party, allow all reasonable inferences in favor of that party,
and discard all countervailing evidence. Bain v. Wells, 936 S.W.2d 618, 622 (Tenn. 1997).
Summary judgment is only appropriate when the facts and the legal conclusions drawn from the facts
reasonably permit only one conclusion. Carvell v. Bottoms, 900 S.W.2d 23, 26 (Tenn. 1995). A
motion for summary judgment should be granted when the moving party demonstrates that there are
no genuine issues of material fact and that it is entitled to a judgment as a matter of law. Tenn. R.
Civ. P. 56.04. Since only questions of law are involved, there is no presumption of correctness
regarding a trial court's grant of summary judgment Bain, 936 S.W.2d at 622. Thus, our review of
the trial court’s grant of summary judgment is de novo on the record before this Court. Warren v.
Estate of Kirk, 954 S.W.2d 722, 723 (Tenn. 1997).

         When interpreting or enforcing a contract, the contract must be considered as written,
according to its plain terms. See Warren v. Metropolitan Gov’t of Nashville & Davidson County,
955 S.W.2d 618, 622-23 (Tenn. App. 1997). A contract is ambiguous only when its meaning is
uncertain, in that the language may be reasonably understood in more ways than one. However, “a
strained construction may not be placed on the language used [in the contract] to find an ambiguity
where none exists,” nor does an ambiguity arise “merely because the parties may differ as to
interpretation of certain provisions.” Id. (citations omitted) When the clear language of the contract
reveals the intent of the parties, the court need not apply the rules of construction. The meaning of
a plain and unambiguous contract is a question of law for the court. Id. Therefore, our review of
the trial court’s interpretation of the policy is de novo with no presumption of correctness.

        The provision at issue in this case states that the policy does not cover expenses arising from
a sickness or injury when a third party is considered responsible “to the extent payment for the
Sickness or Injury is made, or may be made in the future, by or for that responsible person (as a
settlement, judgment, or in any other way).” Nothing in the language indicates that the person must
be found at fault for the accident that resulted in the injury in order to be considered responsible.
The policy refers to responsibility in terms of payment for the injury. It is undisputed that State
Farm paid Gifford $100,000 to settle his personal injury claims arising from the injuries he sustained
in the March 1997 automobile accident. Thus, under the plain language of the policy, the expenses
arising from the injuries Gifford sustained in the accident were not covered by the policy.

       Gifford argues in the alternative that the policy provides for Prudential to recover such
monies paid by a responsible third party only where Gifford has agreed in writing to pay back the
benefits. Gifford executed no such agreement. However, HCC does not seek repayment pursuant




                                                 -4-
to this policy provision. Rather, HCC’s lawsuit seeks recoupment of a payment which should never
have been made:

       When money is [paid by a mistake] of fact, that is, upon the supposition that a
       specific fact is true which would entitle the other to the money, but which fact is
       untrue and the money would not have been paid if the fact had been known to the
       payor an action will lie to recover it back, and this right proceeds upon the ground
       that the plaintiff has paid money which he was under no obligation to pay, and which
       the party to whom it was paid has no right to either receive or retain.

Guild v. Baldridge, 32 Tenn. 295, 295-96 (Tenn. 1852). It is undisputed that Prudential would not
have paid Gifford’s medical expenses had it known that a third party was responsible for payment.
It is also undisputed that Prudential would not have paid for Gifford’s medical expenses had it
known that a third party was responsible and that Gifford had not signed the reimbursement
agreement.

        Prudential’s alleged negligence in failing to ascertain that a third party was responsible for
payment does not bar its claim for recoupment: “Ordinary negligence in failing to ascertain the facts
is not alone sufficient to bar a recovery in cases of money paid under a mistake of fact.” W.E.
Richmond & Co. v. Security Nat’l Bank, 64 S.W.2d 863, 867 (Tenn. Ct. App. 1933). There is no
evidence to suggest that Prudential willfully or intentional neglected to investigate the facts. See Id.
Consequently, we find that the trial court did not err in finding that Prudential was entitled to
recoupment of the overpaid benefits and in granting summary judgment in favor of HCC.

        The decision of the trial court is affirmed. Costs are taxed to the appellant, Ronald Gifford,
and his surety, for which execution may issue if necessary.



                                                        ___________________________________
                                                        HOLLY K. LILLARD, JUDGE




                                                  -5-
