eNotes: Liability – March 2022 – Maryland

MARYLAND CASE SUMMARY

Westfield Ins. Co. v. Gilliam
Maryland Court of Appeals
2022 Md. LEXIS 54 (reported)

Decided: February 8, 2022

The Maryland Court of Appeals holds that the difference between a higher amount billed by a healthcare provider and the amount actually paid by a worker’s compensation insurer is not a part of the statutory offset against underinsured motorist benefits.

Background

Plaintiff Michael Gilliam was rear ended in an automobile accident. At the time, Gilliam was driving a vehicle provided by his employer, Ecomize USA, LLC. Ecomize held a motor vehicle insurance policy with Westfield Ins. Co., which included uninsured/underinsured motorist (UM/UIM) coverage of $1,000,000. Ecomize also carried workers’ compensation (WC) insurance. The other driver had a motor vehicle insurance policy with liability coverage of $30,000.

Gilliam’s health care providers billed Gilliam a total of $243,399.33 for services related to the accident. Gilliam filed a workers’ compensation claim and the WC insurer paid $118,369.15 to Gilliam’s health care providers pursuant to the Fee Guide of the Workers’ Compensation Commission, which the providers accepted in full satisfaction for their services. The WC insurer also paid $510,316.47 in temporary total and permanent disability benefits. The WC insurer asserted a statutory lien against any benefits Gilliam might receive from the other driver. The other driver’s insurer paid Gilliam the policy limits of $30,000, and the WC insurer accepted $10,000 in satisfaction of the lien.

Gilliam then made a claim against Westfield under the UIM portion of the Westfield policy. After the claim could not be resolved, Gilliam filed a one-count breach of contract complaint against Westfield in the Circuit Court for Baltimore City. Westfield removed the case to federal court based on diversity of citizenship.

In Federal Court, Gilliam and Westfield filed Cross-Motions for summary judgment. Under Maryland law, any UIM recovery Gilliam obtained from Westfield would be offset by unreimbursed benefits Gilliam received from the WC insurer. Both parties agreed that any UIM recovery would be offset by the $510,316.47 in temporary total and permanent disability payments from the WC insurer, the $30,000 paid by the other driver’s policy, and the $118,369.15 in medical payments from the WC insurer. However, Westfield argued that the total face amount of Gilliam’s medical bills, $243,399.33, should be deducted from any UIM recovery. Gilliam disagreed, and argued that Westfield could only deduct the amounts actually paid by the WC insurer: $118,369.00. The Federal Court submitted the issue as a certified question of law to Maryland’s Court of Appeals, Maryland’s highest court.

Holding

The Court of Appeals held that “only the amount that the workers’ compensation insurer actually paid for medical expenses is part of the statutory offset against underinsured motorist benefits.” Therefore, the difference between the fair and reasonable value of the health care services provided to Gilliam and the amount actually paid by the WC insurer would not offset Gilliam’s UIM recovery.

Questions about this case can be directed to Andrew White at (443) 641-0572 or awhite@tthlaw.com.