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COURT OF APPEALS DECISION DATED AND RELEASED FEBRUARY 4, 1997 |
NOTICE |
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A party may file with the
Supreme Court a petition to review an adverse decision by the Court of
Appeals. See § 808.10 and
Rule 809.62(1), Stats. |
This opinion is subject to
further editing. If published, the
official version will appear in the bound volume of the Official Reports. |
No. 96-0390
STATE
OF WISCONSIN IN COURT OF
APPEALS
DISTRICT III
HMO OF WISCONSIN,
Plaintiff-Appellant,
v.
SHANE T. HANDLEY,
Defendant-Respondent,
HERITAGE INSURANCE COMPANY,
Defendant.
APPEAL from a judgment
of the circuit court for Eau Claire County:
ERIC J. WAHL, Judge. Affirmed.
Before Cane, P.J.,
LaRocque and Myse, JJ.
PER CURIAM. HMO of Wisconsin appeals a judgment
dismissing its subrogation claims against Shane Handley and Heritage Insurance
Company. It argues that (1) the trial
court erroneously exercised its discretion when it denied HMO's request to
produce additional evidence after it completed its case; (2) sufficient
evidence supported its claim; and (3) subrogation is required to prevent unjust
enrichment. We reject these arguments
and affirm the judgment.
In August 1993, Handley,
an eighteen-year-old, was injured in a two-vehicle accident. His mother's employer's health insurer, HMO,
paid $11,017.08 in medical bills as of February 1995. However, HMO never formally notified Handley of its subrogation
provisions in the policy.
While HMO was paying the
medical bills, Handley, unrepresented by legal counsel, settled his claim
against the other driver, Thad Migawa, and his insurer, Heritage, for
$41,500. They stipulated that Migawa
was 90% at fault and Handley was 10% at fault.
This settlement did not include HMO.
Handley was aware that HMO was paying the medical bills. When Handley asked who would pay HMO,
Heritage answered that Handley did not have to worry about it.
HMO brought this action
to enforce its subrogation rights under the policy. Handley's amended answer denied that HMO had subrogation
rights. During opening statements, his
counsel defined the issue as whether HMO had subrogation rights under the
specific language of the policy and stated that "in particular our
position is that Mr. Handley is not a member under the terms of that policy so
as to be under the obligations that [counsel for HMO] indicates he
is." At the trial to the court,
HMO presented no testimony, but relied on its requests for admissions. Handley had admitted that HMO made payments
pursuant to its policy, which contained a subrogation clause.[1]
After HMO rested,
Handley moved to dismiss. Handley
admitted that HMO made payments pursuant to the policy and that the policy
contains a subrogation clause, but "in no way did we make an admission
that, in fact, that created a valid subrogation claim against Mr. Handley
...."
Handley argued that
because he was a dependent, and not a member, HMO's subrogation rights under
the policy do not apply to him. The
portion of the policy admitted stated that "upon providing ... Benefits
under this Agreement, HMO [of Wisconsin] shall be subrogated to
Member's rights of recovery from any third party." (Emphasis added.) HMO's trial exhibits failed to include a definitions page of its
policy showing who was a "member" subject to subrogation.
After Handley's motion
to dismiss, HMO offered into evidence a copy of the definitions page of the
policy defining a member as an eligible employee and any eligible dependent or
any individual subscriber and any individual dependents who have been enrolled
in the plan. The court rejected the
evidence on the ground that it was not made part of the admissions and there
was no testimony that the two-page certified copy was part of the policy in
question.
HMO then made an offer
of proof that the document defined a member as an eligible employee and any
eligible dependent and offered what it characterized as "rebuttal"
evidence in the form of the two-page exhibit.
Handley objected on the ground that rebuttal was inappropriate because
the defense never offered any evidence.
The trial court agreed
and concluded that absent evidence that Handley was a member, HMO failed to
prove the necessary elements of its claim.
The trial court granted Heritage's and Handley's motions to dismiss
pursuant to § 807.17(1), Stats. HMO appeals.
HMO argues that the
trial court erroneously refused its rebuttal evidence consisting of the copy of
the policy definitions page. It argues
that "prior to the defense's motion to dismiss, the specific issue of
whether Mr. Handley was a 'member' had not been raised." It contends that because the issue whether
Handley was a member was a new matter, HMO was entitled to rebuttal. We disagree.
First, the burden was on
HMO to introduce evidence to show that the subrogation clause applied to
Handley. See Jindra v. Diederich
Flooring, 181 Wis.2d 579, 599, 511 N.W.2d 855, 862 (1994). The issue whether Handley was a
"member" within the meaning of the policy was a matter to be
presented in HMO's case-in-chief and was specifically identified as such by
Handley's counsel at opening statements.
After HMO rested,
Handley and Heritage offered no evidence but moved to dismiss pursuant to §
805.17(1), Stats., on the ground
that HMO failed to show a right to relief.
In an action tried to the court without a jury, after the plaintiff has
presented its evidence, a dismissal under § 805.17(1) operates as an
adjudication upon the merits. See
Household Utils. v. Andrews, 71 Wis.2d 17, 25, 236 N.W.2d 663,
667 (1976). Because rebuttal evidence
is only appropriate when there is evidence offered in defense, see Pophal
v. Siverhus, 168 Wis.2d 533, 555, 484 N.W.2d 555, 563 (Ct. App. 1992),
the trial court did not err when it refused HMO's "rebuttal"
evidence.
Although HMO describes
its motion as one to allow rebuttal evidence, its substance sought to reopen
HMO's case-in-chief. A motion to reopen for the purpose of
introducing portions of the HMO policy is addressed to trial court
discretion. See Catura v.
Romanofsky, 268 Wis. 11, 16, 66 N.W.2d 693, 695 (1954). A litigant has no strict right to reopen a
case for the purpose of introducing additional evidence, but the discretion of
the trial court rests upon general rules of equity and justice. In re Estate of Javornik, 35
Wis.2d 741, 746, 151 N.W.2d 721, 723 (1967).
HMO argues that
"[i]n the interest of justice, Judge Wahl should have demanded a properly
certified copy of the definitions page before dismissing this action"
because failure to do so leaves an issue unresolved. We disagree. Equity does
not dictate that the court reopen the case and allow recovery here. HMO acknowledged that it never sent any
notice to Handley that it would seek reimbursement for the medical bills. Handley's awareness that he was covered by
his mother's insurance, and that it was paying the medical bills, does not
translate to a recognition that HMO's subrogation rights would be asserted
against his settlement with Heritage, absent a notice to this effect. We conclude that the trial court did not
erroneously exercise its discretion when it refused to reopen HMO's
case-in-chief to shore up its lack of proof brought to light by defendants'
motions to dismiss.
Next, HMO argues that it
presented sufficient evidence of its subrogation against Handley, even without
proof that Handley was within the definition of a member against whom
subrogation may be asserted. It argues
that the undisputed facts that the policy contained a subrogation clause, that
Handley settled his personal injury claim without including HMO, that HMO paid
his medical bills under the policy with Handley's knowledge, and that HMO has
not been reimbursed for the sums paid provide sufficient evidence of a valid
subrogation claim. We disagree.
There are two types of
subrogation: contractual subrogation
and equitable subrogation. Jindra,
181 Wis.2d at 601, 511 N.W.2d at 862.
"Clearly, the mere fact that there may be a subrogation clause
somewhere in the contract does not mean that all payments made by the insurer
to its insured must invoke the subrogation clause to the exclusion of all
applicable provisions." Id.
at 602, 511 N.W.2d at 862.
Absent sufficient proof
of necessary contractual provisions, the policy and circumstances must be
analyzed to determine whether there is a basis for equitable subrogation. Id.
at 604, 511 N.W.2d at 863. "As an
equitable doctrine, subrogation is a 'device adopted or invented by equity to
compel the ultimate discharge of a debt or obligation by him who in good
conscience ought to pay it.'" Id.
at 605, 511 N.W.2d at 862 (quoting Leonard v. Bottomley, 210 Wis.
411, 417, 245 N.W. 849, 851 (1933)). As
we previously concluded, under the facts presented, equity does not demand the
court allow recovery against Handley here.
See State v. Gilles, 173 Wis.2d 101, 115, 496
N.W.2d 133, 139 (Ct. App. 1992).
Finally, we decline to
address HMO's unjust enrichment claim because it was not raised in the trial
court.
By the Court.—Judgment
affirmed.
This opinion will not be
published. Rule 809.23(1)(b)5, Stats.