B-158093, AUG. 10, 1966

B-158093, AUG. 10, 1966

TO THE SECRETARY OF THE NAVY:

FURTHER REFERENCE IS MADE TO LETTER DATED JUNE 13, 1966, WITH ENCLOSURES, FROM THE UNDER SECRETARY OF THE NAVY REFERRING TO THE CASE OF HARLAND P. MOULTON, MASTER SERGEANT, USMC, AND REQUESTING ADVICE WHETHER IN THE LIGHT OF THE CIRCUMSTANCES DISCLOSED AND IN VIEW OF OUR DECISION OF JANUARY 26, 1966, B-158093, RECOUPMENT ACTION SHOULD BE PURSUED TO EFFECT RECOVERY OF CERTAIN MEDICAL EXPENSES PAID BY THE GOVERNMENT UNDER THE DEPENDENTS' MEDICAL CARE ACT AND WHETHER PAYMENT OF OUTSTANDING MEDICAL BILLS COVERING SIMILAR EXPENSES SHOULD BE WITHHELD.

IN OUR DECISION OF JANUARY 26, 1966, WE CONSIDERED THE CASE OF SERGEANT MOULTON INVOLVING AN AUTOMOBILE ACCIDENT OCCASIONED BY THE WRONGFUL ACT OF A THIRD PARTY IN WHICH MOULTON'S WIFE AND DAUGHTER SUFFERED EXTENSIVE INJURIES AND WERE TREATED IN CIVILIAN MEDICAL FACILITIES. PART OF THE CIVILIAN MEDICAL EXPENSES INCURRED ($4,789.65) HAVE BEEN PAID FROM GOVERNMENT FUNDS UNDER THE DEPENDENTS' MEDICAL CARE PROGRAM AND PAYMENT OF THE BALANCE OF THE CIVILIAN MEDICAL BILLS HAS BEEN WITHHELD. THE MOULTONS HAD RECEIVED A SETTLEMENT OF $200,000 FROM THE THIRD PARTY TORTFEASOR, $100,000 OF WHICH WAS PAID BY THE INSURANCE COMPANY. THE ACCIDENT IN THIS CASE OCCURRED PRIOR TO THE EFFECTIVE DATE OF THE ACT OF SEPTEMBER 25, 1962, PUB.L. 87-693, 76 STAT. 593, 42 U.S.C. 2651-2653, EFFECTIVE JANUARY 1, 1963.

IN SUPPORT OF OUR CONCLUSION THAT NO FURTHER MEDICAL EXPENSES SHOULD BE PAID IN THE MOULTON CASE AND THAT ADDITIONAL EFFORTS SHOULD BE MADE TO COLLECT THE AMOUNT OF $4,789.65, WE CITED OUR DECISIONS B-107906, DATED APRIL 23, 1952, 31 COMP. GEN. 534, AND B-147227, DATED NOVEMBER 2, 1961, AND FEBRUARY 19, 1962, AND WE SAID:

"WE DO NOT BELIEVE THAT IN ENACTING LAWS PROVIDING MEDICAL CARE AND EXPENSES FOR DEPENDENTS OF MEMBERS OF THE UNIFORMED SERVICES CONGRESS INTENDED THAT PUBLIC FUNDS SHOULD BE USED TO PAY FOR MEDICAL CARE WHERE FUNDS FOR THE PAYMENT OF SUCH MEDICAL EXPENSES ARE FURNISHED BY A THIRD PARTY SUCH AS AN INSURANCE CARRIER OR A NEGLIGENT THIRD PARTY. THE APPARENT PURPOSE OF THE LAW IS TO RELIEVE THE MEMBER CONCERNED FROM THE NECESSITY OF MEETING NECESSARY MEDICAL EXPENSES, NOT TO ENRICH HIM OR HIS DEPENDENTS AT GOVERNMENT EXPENSE.'

THE UNDER SECRETARY SAYS THAT DOUBT EXISTS CONCERNING THE PROPRIETY OF PURSUING FURTHER COLLECTION EFFORTS IN THE MOULTON CASE IN THE LIGHT OF EVENTS SURROUNDING AN ANALOGOUS CASE WITHIN THE DEPARTMENT OF THE ARMY, AS INDICATED IN THE TWO ENCLOSURES SUBMITTED WITH HIS LETTER.

ONE OF THE ENCLOSURES IS A LETTER DATED MAY 18, 1966, FROM THE CHIEF, LITIGATION DIVISION, OFFICE OF THE JUDGE ADVOCATE GENERAL OF THE ARMY, TO THE ATTORNEY GENERAL, REQUESTING HIS ADVICE WHETHER SUIT SHOULD BE INITIATED TO COLLECT PAYMENT OF $2,159.05, THE AMOUNT THE GOVERNMENT PAID UNDER THE DEPENDENTS' MEDICAL CARE PROGRAM. THE LETTER STATES THAT THE DEPENDENT OF AN ARMY SERGEANT, MRS. BARBARA C. JAWORSKI, LIVING WITH HER PARENTS WHILE HER HUSBAND WAS OVERSEAS WAS INVOLVED IN AN AUTOMOBILE ACCIDENT DUE TO THE NEGLIGENCE OF A THIRD PARTY. MEDICAL EXPENSES INCURRED BY THE DEPENDENT TOTALED $11,028.92 OF WHICH THE GOVERNMENT PAID $2,159.05 UNDER THE PROVISIONS OF THE DEPENDENTS' MEDICAL CARE PROGRAM AND THE BALANCE OF THE CHARGES HAVE EITHER BEEN PAID BY THE DEPENDENT OR HAVE NOT BEEN PAID. IT IS STATED THAT THE INJURED PARTY HAS NEGOTIATED A SETTLEMENT WITH THE NEGLIGENT DRIVER'S INSURANCE COMPANY IN THE AMOUNT OF $30,000. IT IS POINTED OUT IN THE JUDGE ADVOCATE GENERAL'S LETTER THAT ON THE BASIS OF OUR DECISION IN THE MOULTON BASE, AN ATTEMPT WAS MADE TO COLLECT THE MEDICAL EXPENSES PAID BY THE GOVERNMENT BUT SUCH DEMAND WAS DENIED BY THE ATTORNEY FOR THE ENLISTED MAN'S WIFE.

THE JUDGE ADVOCATE GENERAL'S OFFICE SAID THAT THERE IS NO STATUTE AUTHORIZING RECOVERIES OF THE TYPE HERE CONTEMPLATED AND THAT OFFICE EXPRESSED THE VIEW THAT THEY HAVE BEEN UNABLE TO DEVELOP ANY THEORY OF RECOVERY WHICH IN THEIR JUDGMENT WOULD BE CONSIDERED PERSUASIVE BY A FEDERAL COURT. THIS REASONING IS STATED TO BE BASED ON THE CITED COURT CASES, NAMELY, UNITED STATES V. STANDARD OIL COMPANY, 332 U.S. 301 (1947); UNITED STATES V. GILMAN, 347 U.S. 507 (1954), AND UNITED STATES V. AMMONS AND BENNETT, 242 F.SUPP. 461 (1965). THE ATTORNEY GENERAL BY LETTER DATED MAY 24, 1966, CONCURRED WITH THE ARMY'S VIEW THAT SUIT NOT BE INSTITUTED IN THAT CASE (THE JAWORSKI CASE) AND STATED THAT "THE ACCIDENT TOOK PLACE PRIOR TO THE EFFECTIVE DATE OF THE MEDICAL CARE RECOVERY ACT AND WOULD THEREFORE BE BARRED BY UNITED STATES V. STANDARD OIL COMPANY, 332 U.S. 301 (1947).'

IN THE STANDARD OIL COMPANY CASE, THE SUPREME COURT HELD THAT IN THE ABSENCE OF LEGISLATION BY CONGRESS, THE UNITED STATES COULD NOT RECOVER FROM THIRD PARTY TORTFEASORS FOR LOSS OF SERVICES AND EXPENSES OF MEDICAL AND HOSPITAL CARE FURNISHED A SOLDIER ON ACCOUNT OF INJURIES SUSTAINED IN A TRAFFIC ACCIDENT. THAT CASE, HOWEVER, INVOLVED THE GOVERNMENT'S RIGHT OF INDEPENDENT RECOVERY FROM A THIRD PARTY TORTFEASOR AND DID NOT RELATE TO ITS LIABILITY FOR EXPENSES WHICH HAD ALREADY BEEN PAID BY AN INSURANCE CARRIER. IN THE GILMAN CASE, THE SUPREME COURT HELD THAT THE UNITED STATES IS NOT ENTITLED TO RECOVER INDEMNITY FROM ONE OF ITS EMPLOYEES FOR WHOSE NEGLIGENCE IT HAS BEEN HELD LIABLE UNDER THE FEDERAL TORT CLAIMS ACT, 28 U.S.C. 1346. HERE AGAIN, THERE WAS NO QUESTION OF THE GOVERNMENT HAVING FURNISHED MEDICAL CARE OR MEDICAL EXPENSES HAVING BEEN PAID BY AN INSURANCE CARRIER.

IN THE AMMONS CASE, THE GOVERNMENT ATTEMPTED TO RECOVER UNDER THE PROVISIONS OF THE ABOVE MENTIONED ACT OF SEPTEMBER 25, 1962, THE COST OF MEDICAL CARE FURNISHED THE SERVICEMAN AT GOVERNMENT EXPENSE. IN THAT CASE, THE COURT HELD THAT IN THE ABSENCE OF AN ASSIGNMENT TO THE UNITED STATES OF THE INJURED PARTY'S RIGHTS AGAINST THE THIRD PARTY TORTFEASOR, THE UNITED STATES COULD NOT UNDER THE 1962 ACT RECOVER ANY AMOUNTS COLLECTED BY THE INJURED PARTY FROM THE THIRD PARTY. IN THIS CONNECTION, WE HAVE QUESTIONED THE CORRECTNESS OF THE DECISION IN THE AMMONS CASE IN THAT THE COURT GAVE THE GOVERNMENT'S INDEPENDENT RIGHT AND THE SUBROGATION PROVIDED BY THE ACT (WHICH DOES NOT REQUIRE AN ACTUAL ASSIGNMENT OF CLAIMS) NO WEIGHT WHATSOEVER, BUT DECIDED THE CASE SOLELY ON FAILURE TO OBTAIN AN ASSIGNMENT OR REQUIRE NOTICE OF SETTLEMENT TO BE GIVEN. WE HAVE BEEN ADVISED INFORMALLY BY THE DEPARTMENT OF JUSTICE THAT THEY CONCUR WITH OUR VIEWS OF THE AMMONS CASE AND THAT THEY HAD INTENDED TO APPEAL IT BUT WERE PREVENTED FROM DOING SO BY THE FACT THAT SHORTLY AFTER THE DECISION WAS RENDERED THE INSURANCE COMPANY FOR AMMONS, THE LIABLE THIRD PERSON, PAID THE AMOUNT OF THE GOVERNMENT'S CLAIM, THUS ELIMINATING ANY BASIS FOR APPEAL.

IT IS OUR VIEW THAT THE COURT'S DECISION IN THE STANDARD OIL COMPANY CASE AFFORDS NO BASIS FOR CONCLUDING THAT THE GOVERNMENT DOES NOT HAVE A TENABLE BASIS TO EFFECT RECOVERY UNDER THE CIRCUMSTANCES DISCLOSED IN THE MOULTON CASE. THE FACTS IN THE MOULTON CASE ARE ENTIRELY DIFFERENT FROM THOSE CONSIDERED IN THE STANDARD OIL COMPANY CASE. AS INDICATED IN ITS TITLE, THE PURPOSE OF THE DEPENDENTS' MEDICAL CARE ACT (10 U.S.C. 1071- 1085/--- THE ACT UNDER WHICH THE GOVERNMENT PAID THE MEDICAL EXPENSES OF MOULTON'S DEPENDENTS--- IS "TO PROVIDE MEDICAL CARE FOR DEPENDENTS OF MEMBERS OF THE UNIFORMED SERVICES," AND OTHER THINGS. WE FIND NOTHING IN THE LEGISLATIVE HISTORY OF THAT ACT INDICATING AN INTENTION TO OBLIGATE THE GOVERNMENT TO PAY MEDICAL EXPENSES FOR DEPENDENTS OF MEMBERS WHO ARE INJURED BY THE NEGLIGENCE OF A THIRD PARTY WHEN THE COSTS OF THOSE MEDICAL EXPENSES ARE INCLUDED IN THE SETTLEMENT MADE BY AN INSURANCE CARRIER OF THE NEGLIGENT THIRD PARTY EITHER BEFORE OR AFTER PAYMENT BY THE GOVERNMENT. SUCH DOUBLE PAYMENTS WOULD AMOUNT TO UNJUST ENRICHMENT OF THE MEMBER OR HIS DEPENDENTS AT GOVERNMENT EXPENSE WHICH WE DO NOT BELIEVE THE CONGRESS INTENDED. THERE APPEARS TO BE NOTHING IN THE STANDARD OIL COMPANY CASE WHICH WARRANTS A CONCLUSION THAT THE SUPREME COURT WOULD SANCTION THE RETENTION OF SUCH DOUBLE PAYMENTS.

SINCE ON THE RECORD BEFORE US IT APPEARS THAT THE MEDICAL EXPENSES INCURRED BY THE DEPENDENTS OF SERGEANT MOULTON WERE INCLUDED IN THE $200,000 SETTLEMENT WHICH THEY RECEIVED, IT IS OUR VIEW THAT IN THE ABSENCE OF A JUDICIAL DETERMINATION IN THIS, OR A SUBSTANTIALLY SIMILAR CASE, TO THE CONTRARY, THE GOVERNMENT IS NOT LIABLE FOR THE MEDICAL EXPENSES AND IS ENTITLED TO REIMBURSEMENT FOR THE EXPENSES WHICH IT HAS PAID. COMPARE CHARLES V. UNITED STATES, 19 CT.CL. 316 (1884), AND LONGWILL V. UNITED STATES, 17 CT.CL. 288 (1881). ACCORDINGLY, COLLECTION ACTION SHOULD BE PURSUED AND NO FURTHER MEDICAL EXPENSES SHOULD BE PAID IN THIS CASE. OUR DECISION OF JANUARY 26, 1966, IS AFFIRMED.

THE FACTS DISCLOSED IN YOUR LETTER WITH RESPECT TO THE JAWORSKI CASE ARE NOT SUFFICIENT FOR A DETERMINATION AS TO WHETHER THAT CASE IS LIKE THE MOULTON CASE. HOWEVER, IF THE SETTLEMENT WITH THE NEGLIGENT DRIVER'S INSURANCE COMPANY IN THAT CASE INCLUDED THE MEDICAL AND HOSPITAL EXPENSES WHICH WERE PAID BY THE GOVERNMENT OR WHICH REMAINED UNPAID, IT WOULD APPEAR THAT THE SAME UNJUST ENRICHMENT FEATURE EXISTS IN THAT CASE AS IS INVOLVED IN THE MOULTON CASE.