Kramer v. State Retirement Bd.

195 P.3d 925

2008 UT App 351

Kelly KRAMER and Rose Kramer, Petitioners, v. STATE RETIREMENT BOARD, Public Employees' Health Program, Respondent.

No. 20070762-CA.

Court of Appeals of Utah.

October 2, 2008.

John F. Fay, Sandy, for Petitioners.

David B. Hansen, Salt Lake City, for Respondent.

Before Judges BENCH, DAVIS, and ORME.

OPINION

DAVIS, Judge:

¶ 1 Kelly and Rose Kramer (the Kramers) appeal the grant of summary judgment in favor of the Utah State Retirement Board, Public Employees' Health Program (PEHP). We affirm.

BACKGROUND

¶ 2 Mr. Kramer is a Utah Highway Patrol officer. On February 19, 1996, he signed a Utah Public Employees Health/Dental Enrollment Form (the Enrollment Form). The third section on the Enrollment Form stated, "I represent that all information is true and correct. By signing below I hereby ... agree to the terms and conditions in the Utah Retirement Systems/PEHP Master Policy [ (the Master Policy) ]." Mr. Kramer also enrolled, among others, his wife, Mrs. Kramer. The Master Policy included the following clause regarding subrogation (the Subrogation Clause):

In the event that Eligible Benefits are furnished to an Insured for bodily injury or illness caused by a third party, PEHP shall be and is hereby subrogated (substituted) with respect to an Insured's right (to the extent of the value of the benefits paid) to any claim against the third party causing bodily injury or illness, regardless of whether the Insured has been "made whole" or has been fully compensated for the injury or illness.

¶ 3 On September 29, 2001, Mrs. Kramer was involved in an automobile accident. PEHP paid $30,047.45 of Mrs. Kramer's medical expenses stemming from the injuries she sustained in that car accident. Some time later, the Kramers sued the tortfeasor.

¶ 4 In February 2003, through a collection agent, PEHP contacted the Kramers' counsel, notifying him of PEHP's subrogation rights. Nevertheless, neither PEHP nor its collection agent were notified of, or offered an opportunity to participate in, the Kramers' settlement negotiations. When PEHP learned that the Kramers had settled their claim on June 16, 2005, obtaining a payment of $100,000.00, in addition to the $10,000.00 Mrs. Kramer received from the underinsured motorist coverage of her auto insurance policy, PEHP made further attempts to collect the $30,047.45 from the Kramers. Believing that PEHP was not entitled to reimbursement for the medical expenses it had paid on Mrs. Kramer's behalf, the Kramers refused to pay PEHP the $30,047.45.

¶ 5 On March 31, 2006, PEHP submitted a Request for Declaratory Judgment to the Utah State Retirement Board (the Board), claiming that PEHP was entitled to $30,047.45 under the Master Policy. To support its argument, PEHP attached a copy of the applicable version of the Master Policy, a copy of the Enrollment Form, and a history of Mrs. Kramer's paid medical claims. The Board assigned a hearing officer (the Hearing Officer) to preside over the formal adjudicative proceeding.

¶ 6 The Kramers opposed PEHP's Request for Declaratory Judgment, claiming that PEHP lacked standing to bring the action and that even if PEHP did have standing, the Subrogation Clause violated Utah law. Although the Kramers requested a hearing, the Hearing Officer ordered discovery prior thereto. The parties thereafter conducted discovery.

¶ 7 On March 23, 2007, PEHP filed a Motion for Summary Judgment. In the accompanying memorandum and attachments, PEHP pointed to the Kramers' admissions that (a) Mr. Kramer signed the Enrollment Form, (b) PEHP paid medical claims related to Mrs. Kramer's 2001 accident, (c) the Kramers received $100,000.00 in a settlement, and (d) the Kramers had not paid PEHP any amount claimed via the Subrogation Clause. The Kramers filed a memorandum in opposition in which they did not dispute these facts but disputed only the "implications of [these] fact[s]." The Kramers also provided what they termed "additional facts" to contest PEHP's claim that there were no material facts in dispute. In its response, PEHP admitted to some of these "additional facts," although it argued that others were questions of law for the Hearing Officer to determine.

¶ 8 On July 10, 2007, the Hearing Officer heard oral arguments on PEHP's Motion for Summary Judgment. On July 30, 2007, the Hearing Officer issued his Ruling in which he granted the Motion for Summary Judgment. At the end of his Ruling, the Hearing Officer directed PEHP's counsel "to prepare an appropriate Order in conformity with this Ruling."

¶ 9 The Kramers objected to the findings of fact and conclusions of law proposed by PEHP's counsel on the grounds that the Hearing Officer asked only for an order, not for findings of fact and conclusions of law. Further, the Kramers asserted that the Hearing Officer, and not PEHP's counsel, should prepare the findings of fact and conclusions of law. The Hearing Officer clarified that he wished PEHP's counsel to prepare not only the order but also findings of fact and conclusions of law. "Implicit in [the] granting of Summary Judgment," the Hearing Officer explained, "is that I found that the facts pleaded and relied upon by [PEHP] are true and uncontested. There are no factual issues to be determined."¹ The Hearing Officer also directed PEHP's counsel to amend the conclusions of law to state that PEHP "has standing to bring this proceeding[,] citing [the] statute relied on," and that "the [S]ubrogation [C]lause is legally enforceable."

¶ 10 On August 22, 2007, the Hearing Officer signed the Findings of Fact and Conclusions of Law and Order on Motion for Summary Judgment. This document included a recitation of the facts described above as well as the following conclusions of law:

1. [PEHP] has standing to bring this action against [the Kramers] pursuant to Utah Code Ann. § 49-11-613.

2. The [Subrogation Clause] is legally enforceable.

3. [PEHP] is entitled to summary judgment as a matter of law because there is no genuine issue as to any material fact.

4. The plain language of the PEHP Master Policy requires PEHP to be reimbursed $30,047.45 the amount paid in medical expenses on behalf of ... Mrs. Kramer for which she also received a $100,000 settlement.

Presumably, the Board approved the Order of the Hearing Officer. Pursuant to the Utah Administrative Procedures Act (UAPA),² the Kramers appeal summary judgment on numerous grounds, including the sufficiency of the Findings of Fact and Conclusions of Law and Order.

ISSUES AND STANDARD OF REVIEW

¶ 11 The Kramers challenge PEHP's standing to bring its claim against them before the Board. Because standing in the administrative law context is a "general question of law," Utah Chapter of the Sierra Club v. Utah Air Quality Bd., 2006 UT 74, ¶ 13, 148 P.3d 960 (internal quotation marks omitted), we review an agency's determination of standing for correctness, see id. ("As a court, we are in a better position than an agency to determine whether this doctrine [of standing] has been properly interpreted and applied, just as we are in a better position to review questions of constitutional and statutory interpretation. Moreover, the policy underlying the correctness standard of review for interpretation of constitutional, statutory, and common law issues applies equally to standing."); Esquivel v. Labor Comm'n, 2000 UT 66, ¶ 13, 7 P.3d 777 (stating that on questions of law, "appellate review gives no deference to ... [an] agency's determination, because the appellate court has the power and duty to say what the law is and to ensure that it is uniform throughout the jurisdiction" (internal quotation marks omitted)).

¶ 12 The Kramers also challenge the sufficiency of the Findings of Fact and Conclusions of Law. We review an agency's "interpretation of general questions of law .... [under] a correction-of-error standard, granting no deference to [agency] decisions." Associated Gen. Contractors v. Board of Oil, Gas & Mining, 2001 UT 112, ¶ 18, 38 P.3d 291 (second alteration in original) (internal quotation marks omitted). Relatedly, the Kramers argue that the Hearing Officer improperly granted summary judgment. We review this claim for correctness, granting no deference to the Hearing Officer. See Swan Creek Vill. Homeowners Ass'n v. Warne, 2006 UT 22, ¶ 16, 134 P.3d 1122. We will affirm a grant of summary judgment "only if there is no genuine dispute of material fact and the moving party is entitled to judgment as a matter of law." American Towers Owners Ass'n v. CCI Mech., Inc., 930 P.2d 1182, 1185 (Utah 1996).

ANALYSIS

I. Standing

¶ 13 The Kramers allege that PEHP lacked standing to prosecute this case before the Board. Specifically, the Kramers claim that because Utah Code section 49-11-613 grants only a "person" the ability to initiate an action, see Utah Code Ann. § 49-11-613(1)(c)-(d) (Supp.2008), PEHP had no standing.³ That same chapter defines PEHP as a "program" created under title 49, chapter 20. See id. § 49-11-102(34). "Because PEHP is administered by a state agency," UAPA, along with section 49-11-613, applies to all adjudicative proceedings.⁴ Gunn v Utah State Ret. Bd., 2007 UT App 4, ¶ 7, 155 P.3d 113, cert. denied, 168 P.3d 339 (Utah 2007).

¶ 14 Thus, while the term "person" is not defined in title 49, UAPA defines this term as "an individual, group of individuals, partnership, corporation, association, political subdivision or its units, governmental subdivision or its units, public or private organization or entity of any character, or another agency." Utah Code Ann. § 63G-4-103(1)(g) (Supp.2008). The Board, as overseers of the Utah State Retirement Systems or Office fits this definition, see Utah Code Ann. § 49-11-201(2)(a) (2007) (stating that the Utah State Retirement Office "is an independent state agency"); id. § 49-11-203(1) (granting power to the Board to administer "the systems, plans, programs and funds" under title 49). The Office administers PEHP. See...