Auto Club Property Casualty Insurance Co. v. Jessica A. Moser

IN THE SUPREME COURT OF APPEALS OF WEST VIRGINIA

January 2022 Term FILED
_______________ April 25, 2022
EDYTHE NASH GAISER, CLERK

No. 20-0792 SUPREME COURT OF APPEALS
OF WEST VIRGINIA
_______________

AUTO CLUB PROPERTY CASUALTY INSURANCE CO.,
Petitioner,

v.

JESSICA A. MOSER,
Respondent.

________________________________________________________

Appeal from the Circuit Court of Berkeley County
The Honorable Michael Lorensen, Judge
Civil Action No. 19-C-165

AFFIRMED
________________________________________________________

Submitted: January 5, 2022
Filed: April 25, 2022

Ancil G. Ramey, Esq. Mark Jenkinson, Esq.
Steptoe & Johnson PLLC Ronald M. Harman, Esq.
Huntington, West Virginia Burke, Schultz, Harman & Jenkinson
Melanie Morgan Norris, Esq. Martinsburg, West Virginia
Steptoe & Johnson PLLC Counsel for the Respondent
Wheeling, West Virginia
Counsel for the Petitioner

CHIEF JUSTICE HUTCHISON delivered the Opinion of the Court.

JUSTICE ARMSTEAD dissents and reserves the right to file a separate opinion.

JUSTICE MOATS, sitting by temporary assignment, did not participate in this
decision.
 SYLLABUS BY THE COURT

1. “The interpretation of an insurance contract, including the question of

whether the contract is ambiguous, is a legal determination that, like a lower court’s grant

of summary judgement, shall be reviewed de novo on appeal.” Syl. pt. 2, Riffe v. Home

Finders Assocs., Inc., 205 W. Va. 216, 517 S.E.2d 313 (1999).

2. This Court reviews an award of costs and attorney’s fees under an

abuse of discretion standard.

3. “Language in an insurance policy should be given its plain, ordinary

meaning.” Syl. pt. 1, Soliva v. Shand, Morahan & Co., 176 W. Va. 430, 345 S.E.2d 33

(1986).

4. “Where the provisions of an insurance policy contract are clear and

unambiguous they are not subject to judicial construction or interpretation, but full effect

will be given to the plain meaning intended.” Syl., Keffer v. Prudential Ins. Co. of Am.,

153 W. Va. 813, 172 S.E.2d 714 (1970).

5. “It is not the right or province of a court to alter, pervert or destroy the

clear meaning and intent of the parties as expressed in unambiguous language in their

written contract or to make a new or different contract for them.” Syl. pt. 3, Cotiga Dev.

Co. v. United Fuel Gas Co., 147 W. Va. 484, 128 S.E.2d 626 (1962).

i
 6. “Where attorney’s fees are sought against a third party, the test of

what should be considered a reasonable fee is determined not solely by the fee arrangement

between the attorney and his client. The reasonableness of attorney’s fees is generally

based on broader factors such as: (1) the time and labor required; (2) the novelty and

difficulty of the questions; (3) the skill requisite to perform the legal service properly; (4)

the preclusion of other employment by the attorney due to acceptance of the case; (5) the

customary fee; (6) whether the fee is fixed or contingent; (7) time limitations imposed by

the client or the circumstances; (8) the amount involved and the results obtained; (9) the

experience, reputation, and ability of the attorneys; (10) the undesirability of the case; (11)

the nature and length of the professional relationship with the client; and (12) awards in

similar cases.” Syl. pt. 4, Aetna Cas. & Sur. Co. v. Pitrolo, 176 W. Va. 190, 342 S.E.2d

156 (1986).

ii
HUTCHISON, Chief Justice:

In this appeal from the Circuit Court of Berkeley County, we consider a

lawsuit by an insured against her insurance company concerning the “medical payments

coverage” provision in her automobile insurance contract. Specifically, we consider the

contract’s requirement that the insurance company reimburse the insured for any medical

expenses she “incurred” in an accident. The insured received a medical bill for treatment

she received after an automobile accident, one that was eventually resolved by her health

insurer. The insurance company refused payment and claimed that the medical bill had not

been “incurred.” The circuit court examined the language of the contract and found that

the insurance company wrote it to say a medical expense was “incurred” when the insured

received and became liable to pay for medical services. Further, the terms of the contract,

written by the insurance company, obligated the company to reimburse the insured the full

amount of the expense. Because the insured was required to sue to enforce the insurance

contract’s terms, the circuit court also required the insurance company to reimburse the

insured for her costs and attorney’s fees.

As we discuss below, we find no error in the circuit court’s interpretation of

the medical payments provision in the insurance contract. The contract’s language was

chosen by the insurance company, and six decades of case law interpreting identical

language in similar policies establish that the contract clearly afforded coverage to the

insured on the facts presented below. We also find no error in the circuit court’s rulings

on costs and attorney’s fees.

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 I. Factual and Procedural Background

Plaintiff Jessica A. Moser was an “insured person” under an automobile

insurance contract issued by the defendant, Auto Club Property Casualty Insurance

Company (“Auto Club”). The contract included a provision that afforded an “insured

person” up to $5,000 in “medical payments coverage.” The medical payments provision

stipulated that Auto Club would pay the reasonable medical expenses “incurred” by an

insured person for bodily injuries sustained in a collision while occupying a motor vehicle.
1

As we discuss in greater detail below, the parties dispute what it means for a medical

expense to be “incurred” under the contract.

On October 17, 2017, the plaintiff was driving a motor vehicle insured by

Auto Club. She was injured when her vehicle was struck by another vehicle in a rear-end

collision. The driver of the other vehicle was determined to be at fault. The plaintiff was

The pertinent portion of the Auto Club policy pertaining to medical
1

payments coverage provides:

INSURING AGREEMENT

. . . [W]e will pay reasonable medical expenses incurred for
necessary medical and funeral services because of bodily
injury:

1. caused by an accident; and

2. sustained by an insured person. . . .

(Emphasis added, other italics and bolding omitted). The provision extends coverage to an
“insured person” “while occupying . . . a motor vehicle[.]”

2
taken by ambulance to a hospital for examination. She was soon released and, over the

following months, visited various medical providers for follow-up treatment. The plaintiff

received charges from those medical providers, all related to the collision, totaling

$19,522.56. Those medical expenses were resolved by the plaintiff’s health insurer, the

West Virginia Medicaid program.
2

Before going further into the facts, we emphasize that the plaintiff’s receipt

of medical benefits from the Medicaid program is not important to the outcome of this case.

However, in order to understand how Auto Club’s subsequent actions were misguided, a

rudimentary explanation of West Virginia’s Medicaid program and the program’s right to

subrogation when an injured plaintiff receives Medicaid medical benefits is necessary.

State law provides that when a third party is legally liable for a plaintiff’s

past medical expenses that were paid by the Medicaid program, the program automatically

receives a “subrogation lien” to recover those expenses. The plaintiff’s lawyer is required
3

2
The Medicaid program is administered by the West Virginia Bureau for
Medical Services; the Bureau contracted with Aetna Better Health of West Virginia
(“AetnaWV”) to manage its Medicaid program. AetnaWV subsequently contracted with
Equian LLC to recover past medical expenses paid by the Medicaid program from any
third party who might legally be liable for those expenditures. For clarity, we refer to these
entities as “the Medicaid program.”

Federal law, 42 U.S.C. § 1396k(a)(1)(C), requires that every State providing
3

medical assistance under the Medicaid plan must establish a requirement that any person
receiving assistance “cooperate with the State in identifying, and providing information to
assist the State in pursuing, any third party who may be liable to pay for care and services
available under the plan[.]” More specifically, 42 U.S.C. § 1396a(a)(25)(H) dictates that

Continued . . .
3
to notify the Medicaid program when the lawyer initiates a claim or lawsuit against the

third party for those past medical expenses. 4 If the claim or lawsuit against the third party

concludes with a settlement, then the plaintiff’s lawyer is required to notify the Medicaid

program of “the amount of the settlement being allocated for past medical expenses paid

for by the Medicaid program.” As we said in Syllabus Point 4 of In re E.B., 229 W. Va.
5

435, 729 S.E.2d 270 (2012), the Medicaid program may “obtain reimbursement for medical

expenses paid from only that portion of the settlement, compromise, judgment, or award

obtained by a recipient of Medicaid assistance that constitutes damages for past medical

expenses.”

[a] State plan for medical assistance must . . . provide . . . that
to the extent that payment has been made under the State plan
for medical assistance in any case where a third party has a
legal liability to make payment for such assistance, the State
has in effect laws under which . . . the State is considered to
have acquired the rights of such individual to payment by any
other party for such health care items or services[.]

West Virginia has complied with this federal requirement. West Virginia Code § 9-5-11(b)
(2013) provides that submitting an application for Medicaid medical assistance “is, as a
matter of law, an assignment of the right of the applicant or his or her legal representative
to recover from third parties past medical expenses paid for by the Medicaid program.” A
legal representative (for either the plaintiff or a third party) who fails to assist the Medicaid
program in collecting these past medical expenses is liable “for all reimbursement amounts
the [Medicaid program] would otherwise have been entitled to collect . . . but for the failure
to comply.” Id. § 9-5-11(f). However, the statute provides that “[u]nder no circumstances
may a pro se recipient be penalized for failing to comply with the provisions of this
section.” Id.

See id. § 9-5-11(c)(1).
4

Id. § 9-5-11(d)(1).
5

4
 Within thirty days of receiving the settlement notice, the Medicaid program

must either consent to or reject the plaintiff’s proposed allocation of the settlement toward

past medical expenses. 6 The Medicaid program may negotiate with the plaintiff’s lawyer

and choose to accept an amount that is less than the subrogation lien, or it may seek judicial

intervention, in which case the Medicaid program bears the burden of proving that the

allocation of past medical expenses offered by the plaintiff is improper. However, if the
7

plaintiff obtains a total settlement less than $20,000, then state law dictates that the

Medicaid program collects nothing. In summary, it is the plaintiff’s responsibility, and
8

not any third party’s, to work with the Medicaid program and make any payments toward

the subrogation lien.

After her October 2017 rear-end collision, and during the months-long course

of her medical treatment, the plaintiff hired a lawyer. The plaintiff’s lawyer began pursuing

a claim against the tortfeasor who caused the collision (or, more specifically, the

tortfeasor’s automobile insurer). As required by law, the plaintiff’s lawyer notified the

See id. If the Medicaid program fails to “appropriately respond to a
6

notification of settlement,” then the Medicaid program may only recover “the amount of
the settlement the recipient has allocated toward past medical expenses.” Id. § 9-5-11(e).

See id. §§ 9-5-11(d)(2) and (3). See also Syllabus Points 7 and 8, In re E.B.,
7

229 W. Va. at 440, 729 S.E.2d at 275 (explaining the process of obtaining the Medicaid
program’s consent regarding the allocation of the portion of a settlement that represents a
program recipient’s past medical expenses).

See W. Va. Code § 9-5-11(d)(4).
8

5
Medicaid program that the plaintiff was asserting a claim against a third party who was

allegedly liable to pay some, or all, of the plaintiff’s past medical expenses.

Additionally, on April 27, 2018, the plaintiff’s lawyer sent a medical bill to

the plaintiff’s automobile insurer, defendant Auto Club, seeking reimbursement under the

medical payments provision of the insurance contract. The parties agree that the two-page

medical bill from a physical therapy clinic listed a series of visits by the plaintiff for

medical services related to the collision. The total cost of the services from the clinic was

$2,165.00, and the plaintiff demanded that Auto Club pay her this amount.

Auto Club responded and refused to pay the plaintiff the amount of the

physical therapy clinic’s bill. Among its reasons for denying the reimbursement, Auto

Club noted that the plaintiff had health insurance through the Medicaid program. Auto

Club declared that the plaintiff was not entitled to medical payments coverage because “no

medical expenses have been incurred . . . as the bills submitted were paid by Medicaid.”

Apparently unbeknown to the plaintiff’s lawyer, and contemporaneous with

Auto Club’s rejection of the plaintiff’s demand for medical payments coverage, the

Medicaid program sent a letter to Auto Club. The letter noted that the Medicaid program
9

had so far “paid medical benefits on behalf of JESSICA A MOSER in the sum of

$1,437.61” to three providers (including the physical therapy clinic) and that the program

The letter was dated April 25, 2018.
9

6
was asserting a subrogation lien in that amount. The Medicaid program concluded that

payment to the program should be remitted “[a]t the conclusion of this matter[.]” At some

later date – the record is unclear when – and despite the fact that the plaintiff’s claim against

the tortfeasor had not been concluded, Auto Club paid $1,437.61 to the Medicaid program.

On October 23, 2019, the plaintiff settled with the tortfeasor who caused the

rear-end collision for $60,000. The same day, the plaintiff’s lawyer notified the Medicaid

program of the settlement. The Medicaid program asserted that the plaintiff owed a balance

of $1,547.29 toward the subrogation lien for past medical expenditures by the program.

After negotiations with the plaintiff’s lawyer, the Medicaid program agreed to accept

$1,078.69 as full payment.

The plaintiff filed the instant case against Auto Club seeking, among other

things, a declaratory judgment interpreting the medical payments provision in the Auto

Club contract. The plaintiff asked for an order requiring Auto Club to provide medical

payments coverage for the $2,165.00 in medical expenses that she “incurred” for physical

therapy. On March 13, 2020, the plaintiff filed a motion for partial summary judgment,

asserting that the medical payments provision should be interpreted in her favor. Auto

Club countered with its own motion for summary judgment.

In an order dated June 5, 2020, the circuit court granted the plaintiff’s motion

for partial summary judgment and denied Auto Club’s motion. The circuit court found that

the term “incurred” in Auto Club’s medical payments provision was clear and meant “‘to

7
become liable or subject to.’ ‘Incurred’ does not mean ‘legally liable’ to pay.” As the

Auto Club insurance contract was written, the circuit court concluded that an injured party

“incurs” and becomes responsible for a medical expense “when the medical services are

received, regardless of how, or even whether the injured person’s obligation [to] the

medical providers [is] later discharged.” Additionally, the circuit court determined that the

Medicaid program was not a party to the Auto Club insurance contract, and it found no

language in the medical payments provision that permitted Auto Club to pay policy benefits

to any entity other than the insured plaintiff. Further, it found that Auto Club should not

have paid the Medicaid program because, under the contract between the plaintiff and Auto

Club, the program did not incur any reasonable medical expenses because of bodily injuries

while occupying a motor vehicle.

The circuit court found no dispute that the medical expenses from the

plaintiff’s physical therapy clinic were reasonably incurred and were necessary because of

the plaintiff’s bodily injuries suffered in the vehicle collision. The circuit court also noted

that the Auto Club policy provided that the medical payments coverage was primary to any

other insurance coverage if the plaintiff was driving a vehicle defined as “your car” under

the policy – and the record indisputably showed the plaintiff’s vehicle met that definition.

The circuit court found that the plaintiff had entered into a contract, drafted by Auto Club,

that gave her a reasonable expectation that Auto Club would pay her the full amount of her

physical therapy bill, regardless of whether that bill was paid by another entity.

Nevertheless, the circuit court found that Auto Club was entitled to a credit for any amounts

8
it paid to the Medicaid program for the physical therapy clinic expenses. Subsequently,

Auto Club could only provide proof that it paid the Medicaid program $822.91 to satisfy

the plaintiff’s physical therapy bills. Hence, the circuit court ordered Auto Club to pay the

plaintiff the unpaid balance of the $2,165.00 physical therapy bill, or $1,342.09.

The plaintiff then submitted a formal petition for attorney’s fees. In an order

dated September 4, 2020, the circuit court granted the petition and awarded the plaintiff

fees and costs of $34,026.75. The circuit court also certified that its orders were

immediately appealable.

Auto Club now appeals the circuit court’s orders granting partial summary

judgment to the plaintiff, denying Auto Club’s motion for summary judgment, and

awarding the plaintiff her attorney’s fees and costs.

II. Standard of Review

The circuit court’s summary judgment order in this case declaring the rights

of the parties was based purely on a question of law: the interpretation of an insurance

contract. We review such an order de novo. See Syl. pt. 1, Findley v. State Farm Mut.

Auto. Ins. Co., 213 W. Va. 80, 576 S.E.2d 807 (2002) (“This Court reviews de novo the

denial of a motion for summary judgment, where such a ruling is properly reviewable by

this Court.”); Syl. pt. 2, Riffe v. Home Finders Assocs., Inc., 205 W. Va. 216, 517 S.E.2d

313 (1999) (“The interpretation of an insurance contract, including the question of whether

the contract is ambiguous, is a legal determination that, like a lower court’s grant of

9
summary judgement, shall be reviewed de novo on appeal.”); Syl. pt. 3, Cox v. Amick, 195

W. Va. 608, 466 S.E.2d 459 (1995) (“A circuit court’s entry of a declaratory judgment is

reviewed de novo.”); Syl. pt. 1, Painter v. Peavy, 192 W. Va. 189, 451 S.E.2d 755 (1994)

(“A circuit court’s entry of summary judgment is reviewed de novo.”).

On numerous occasions, we have discussed the standard of review regarding

a lower court’s award of costs and attorney’s fees, and consistently found that review to be

one for an abuse of discretion. See Lewis v. Chafin, 215 W. Va. 11, 14, 592 S.E.2d 790,

793 (2003) (“This Court reviews an award of attorney’s fees under an abuse of discretion

standard.”); Beto v. Stewart, 213 W. Va. 355, 359, 582 S.E.2d 802, 806 (2003) (“The

decision to award or not to award attorney’s fees rests in the sound discretion of the circuit

court, and the exercise of that discretion will not be disturbed on appeal except in cases of

abuse.”); Hopkins v. Yarbrough, 168 W. Va. 480, 489, 284 S.E.2d 907, 912 (1981) (“[I]n

reviewing the ruling of a trial court with respect to costs and attorney fees in cases such as

the one now before this Court, the standard is whether such ruling by the trial court

constitutes an abuse of discretion.); Syl. pt. 2, Bond v. Bond, 144 W. Va. 478, 109 S.E.2d

16 (1959) (“[T]he trial [court] is vested with a wide discretion in determining the amount

of . . . court costs and counsel fees; and the trial [court’s] determination of such matters

will not be disturbed upon appeal to this Court unless it clearly appears that [it] has abused

[its] discretion.”). However, because we have never expressed this standard of review in a

new syllabus point, we do so now. We hold that this Court reviews an award of costs and

attorney’s fees under an abuse of discretion standard.

10
 III. Discussion

A. The Meaning of “Incurred”

Auto Club’s first assignment of error challenges the circuit court’s

determination that it was required to pay the plaintiff’s physical therapy bill under the

medical payments provision in her Auto Club insurance contract. 10 This Court has noted

that the typical medical payments provision

permits the insured to gain speedy reimbursement for medical
expenses incurred as a result of a collision without regard to
the insured’s fault. It also assures coverage when the insured
is involved in an accident with an uninsured or underinsured
driver. And in situations where both parties to an accident are
insured by the same insurer, it sometimes eliminates the need
for costly litigation to determine fault.

Ferrell v. Nationwide Mut. Ins. Co., 217 W. Va. 243, 249, 617 S.E.2d 790, 796 (2005).

See also, 11 Steven Plitt, et al., Couch on Insurance § 158:2 (3d ed. 2021) (“Recovery

under the medical payments clause of an automobile liability policy is completely

independent of liability on the part of the insured.”).

The medical payments provision of the parties’ insurance contract provides

that Auto Club “will pay reasonable medical expenses incurred for necessary medical and

funeral services because of bodily injury[.]” (Emphasis added.) The parties’ positions in

There can be no dispute that this case is, as are most declaratory judgment
10

actions regarding insurance policies, nothing more than a contract dispute. The
“Automobile Insurance Policy” provided by Auto Club to the plaintiff clearly provides, on
the first line of page 1, “THIS POLICY IS A LEGAL CONTRACT BETWEEN YOU
AND US.”

11
this case boil down to a dispute as to the meaning of the term “incurred.” The term is not

defined by Auto Club’s insurance contract nor are there any statutory requirements

governing medical payments coverage. Accordingly, we must look to the language of the

contract to determine if coverage is available.

When a court interprets an insurance policy, the “[l]anguage in an insurance

policy should be given its plain, ordinary meaning.” Syl. pt. 1, Soliva v. Shand, Morahan

& Co., Inc., 176 W.Va. 430, 345 S.E.2d 33 (1986). “The words are to be taken in their

ordinary and popular sense[.]” Flaherty v. Fleming, 58 W. Va. 669, 52 S.E. 857, 858

(1906). “We will not rewrite the terms of the policy; instead, we enforce it as written.”

Payne v. Weston, 195 W. Va. 502, 507, 466 S.E.2d 161, 166 (1995). “Where the

provisions of an insurance policy contract are clear and unambiguous they are not subject

to judicial construction or interpretation, but full effect will be given to the plain meaning

intended.” Syl., Keffer v. Prudential Ins. Co., 153 W.Va. 813, 172 S.E.2d 714 (1970).

When the parties dispute the meaning of a word in an insurance contract, courts assess the

meaning of the word by viewing the policy from the viewpoint of a reasonable consumer

of average intelligence not trained in the law or insurance business. “An insurance contract

should be given a construction which a reasonable person standing in the shoes of the

insured would expect the language to mean.” Soliva, 176 W.Va. at 433, 345 S.E.2d at 35-

36; see also, Guerrier v. Mid-Century Ins. Co., 663 N.W.2d 131, 135 (Neb. 2003)

(“Regarding words in an insurance policy, the language should be considered not in

accordance with what the insurer intended the words to mean but according to what a

12
reasonable person in the position of the insured would have understood them to mean.”);

Polan v. Travelers Ins. Co., 156 W. Va. 250, 255, 192 S.E.2d 481, 484 (1972) (“It is well

established in the law that the terms of an insurance policy should be understood in their

plain, ordinary and popular sense, not in a strained or philosophical sense.”); Thompson v.

State Auto. Mut. Ins. Co., 122 W. Va. 551, 554, 11 S.E.2d 849, 850 (1940) (“In ascertaining

the intention of the parties to an insurance contract, the test is what a reasonable person in

insured’s position would have understood the words of the policy to mean.”).

The plaintiff asserts, and the circuit court found, that the dictionary definition

of “incurred” means “[t]o become liable or subject to.” Black’s Law Dictionary 768 (6th

Ed. 1990). The Merriam-Webster Dictionary similarly defines “incur” as “to become

liable or subject to,” while the Oxford English Dictionary defines the term as “become

subject to . . . as a result of one’s own behavior or actions.” Auto Club does not dispute

this basic definition. Rather, it argues that an insured person like the plaintiff could not

incur and be liable for an expense that might eventually paid, in whole or part, on her behalf

by the Medicaid program. The plaintiff counters that an injured plaintiff incurs and

becomes liable for a medical bill at the time the services are rendered, regardless of how,

or even whether, the plaintiff’s obligation to the medical provider is later discharged.

Hence, it is the plaintiff’s position that the circuit court correctly found that a medical

expense is “incurred” when the medical service is rendered.

We find no error in the circuit court’s ruling because a reasonable, prudent

person would consider the term “incurred” to be clear and unambiguous. The typical

13
consumer would understand that a medical expense is incurred at the time the services are

rendered. Indeed, most medical providers state, before they perform a service, that a patient

is responsible for any charges incurred regardless of whether insurance or some other party

ultimately pays. When a patient’s health insurer eventually resolves those medical charges,

the health insurer is merely relieving the patient of a liability the patient has previously

assumed. At no point does the health insurer become liable to the medical provider

directly; instead, if the health insurer fails to pay any part of the claim, the medical provider

will pursue the patient for recompense.

Importantly, the contract question presented by Auto Club is not a novel one.

Since insurance companies began incorporating medical payments provisions into their

policies in the late-1940s, they have repeatedly made the same arguments Auto Club
11

11
An American Law Reports summary from 1955 noted that

Comparatively recently, many liability insurers have included
in their policies, at a small extra premium, provisions under the
terms of which the insurer undertakes to pay for medical or
funeral expenses, within specified limits, incurred by persons
injured or killed as a result of the condition or use of the
property in connection with which the liability insurance is
written.

W.E. Shipley, Coverage, construction, and effect of medical payments and funeral expense
clauses of liability policy, 42 A.L.R.2d 983 § 2 (1955). The medical payments provision
displaced “first-aid” clauses, “under which the person insured against liability is authorized
to provide limited medical care in order to mitigate damages.” Id. § 1; see, e.g., Gilbert v.
Am. Cas. Co., 126 W. Va. 142, 27 S.E.2d 431, 434 (1943) (examining a policy provision
where “the company shall . . . pay . . . expenses incurred by the Insured, in the event of
bodily injury, for such immediate medical and surgical relief to others as shall be
imperative at the time of accident.”); Chitwood v. Farm Bureau Mut. Auto. Ins. Co., 117
Continued . . .
14
offers in this case. Jurisdictions considering those arguments have weighed language

identical to that used by Auto Club, and they have consistently ruled against the insurers

and found that the term “incurred” is clear. These jurisdictions have found that a person

has “incurred” a medical expense at the time medical services are rendered and that an

insurer is liable to the insured for the entire expense under the medical payments provision,

regardless of whether or how the medical expense was ultimately paid. For instance, in

Samsel v. Allstate Insurance Co., 59 P.3d 281, 286 (Ariz. 2002), the Supreme Court of

Arizona found that even though the insured’s medical expenses resulting from an

automobile accident were subsequently resolved by her HMO, her automobile medical

payments insurer was contractually liable to pay her the full value of the medical expenses.

The Samsel court, reviewing cases interpreting medical payments provisions back to the

1950s, explained:

The narrow rule to be extracted from all of these cases is that
“incurred” or “actually incurred” language does not bar an
insured who became liable for expenses from recovery simply
because “of the availability of collateral means of discharging
his liability therefor so as to have relieved him of the need to
pay the charges personally.”

Id. (quoting Hollister v. Gov’t Emps. Ins. Co., 224 N.W.2d 164, 166 (Neb. 1974)).

Critically, the Samsel court concluded with the following interpretation of the medical

payments provision:

W. Va. 797, 188 S.E. 493, 493-94 (1936) (same). A “first-aid” clause permitted an insured
to incur the costs of “immediate medical and surgical aid ‘to others,’” so as to “minimize
the damages for which the company may be liable for personal injuries to others under the
public liability coverage of its policy[.]” Id.

15
 The undefined phrase “actually incurred by the insured” is
interpreted to mean actually incurred for treatment of the
insured rather than actually incurred for treatment for which
the insured is directly legally liable.

59 P.3d at 291. Numerous other courts have examined the word “incurred” in insurance

policies and reached the same conclusion. See, e.g., Dutta v. State Farm Ins. Co., 769 A.2d

948, 961 (Md. 2001) (although insured’s medical expense was resolved by his HMO,

automobile insurer was contractually liable because “the expense need merely be

incurred—regardless of whether it is the insured, the insured’s health insurer, the insured’s

health maintenance organization, or any other collateral source of benefits, who ultimately

pays the bill.”); Shanafelt v. Allstate Ins. Co., 552 N.W.2d 671, 676 (Mich. Ct. App. 1996)

(“Obviously, plaintiff became liable for her medical expenses when she accepted medical

treatment. The fact that plaintiff had contracted with a health insurance company to

compensate her for her medical expenses, or to pay directly the health care provider on her

behalf, does not alter the fact that she was obligated to pay those expenses.”); Curts v. Atl.

Mut. Ins. Co., 587 A.2d 1283, 1287 (N.J. Super. Ct. App. Div. 1991) (holding that an

automobile accident victim who received medical care as part of a prepaid nursing home

plan “incurred” medical expenses payable under automobile insurance policy); Holmes v.

Cal. State Auto. Assn., 185 Cal. Rptr. 521, 524 (Cal. Ct. App. 1982) (insured whose hospital

costs were covered by Medicare benefits still incurred medical expenses “upon the

rendition of services” triggering automobile insurance medical payments provision); Heis

v. Allstate Ins. Co., 436 P.2d 550, 552 (Or. 1968) (insured, whose hospital expenses were

paid by a group health plan, was “entitled to recover under her [medical payments] policy

16
with defendant without deducting the amount paid by the [group health plan] for her

medical services.”); Collins v. Farmers Ins. Exch., 135 N.W.2d 503, 507 (Minn. 1965)

(after sustaining injuries in automobile accident, negotiations by plaintiff’s counsel

resulted in plaintiff paying medical providers less than the amount billed; nevertheless, the

court required the automobile insurer to compensate plaintiff for the full amount of the

medical bills “incurred.” “The definition of incur is ‘to become liable for,’ as distinguished

from actually ‘pay for.’ This definition has been well fixed and delineated in the case law,

and we are compelled to conclude that the insurer, when it used that language, intended to

bind itself to pay the amount the insured became liable for, not the amount he paid as a

result of a collateral transaction.”); Syl. pt. 2, Masaki v. Columbia Cas. Co., 395 P.2d 927,

927 (Haw. 1964) (“Where insured’s automobile policy provided for payment of reasonable

expenses incurred for necessary medical and hospital services for treatment of injuries . . .

insured who received injuries in an automobile accident was entitled to the reasonable cost

of the medical and hospital services furnished him through his membership in a pre-paying

health plan.”); Feit v. St. Paul Fire & Marine Ins. Co., 27 Cal. Rptr. 870 (Cal. Ct. App.

1962) (insured could recover the entirety of medical expenses under medical payments

clause in automobile insurance policy, despite expenses being initially paid under insured’s

membership in a pre-paid health plan); Am. Indem. Co. v. Olesijuk, 353 S.W.2d 71, 73

(Tex. Civ. App. 1961) (passenger “incurred” medical charges for treatment that automobile

insurer was required to compensate, notwithstanding that the United States Navy paid the

charges. “The fact that the insured has other arrangements for the reimbursement of his

expenses does not operate to relieve [the insurance company] of its obligation as expressed

17
in its contract in plain, certain and unambiguous language.”); 12 Kopp v. Home Mut. Ins.

Co., 94 N.W.2d 224, 226 (Wis. 1959) (insured submitted hospital bill to his automobile

insurer that indicated on its face the bill was paid by Blue Cross and insured owed nothing;

still, the court found the hospital bill was “incurred” and insured was entitled to

reimbursement for the full amount of the bill under automobile insurance’s medical

payments provision); see also Hollister, 224 N.W.2d at 165 (interpreting an insurance

policy for hospital and medical services; active-duty solder sought payment of medical

expenses charged by a private hospital but paid by the United States Army; court concluded

the soldier had “incurred” the expenses because, “[o]rdinarily the term ‘incurred’ is

construed to mean that one has become obligated or liable for the expense involved.”).

12
But see Lefebvre v. Gov’t Emp. Ins. Co., 259 A.2d 133, 135 (N.H. 1969)
(military serviceman’s wife was injured in an accident, treated at a U.S. Naval Hospital
and, “[e]xcept for $31.50 she was, as the wife of a serviceman, entitled to receive these
services without charge;” court found that because the wife “never became liable to pay
more than $31.50 for the medical services provided . . . by the Government,” she was
“entitled to no more than this amount” under her medical payments provision); Irby v.
Gov’t Emp. Ins. Co., 175 So. 2d 9, 11-12 (La. Ct. App. 1965) (active duty member of the
Coast Guard, injured in an automobile accident, was treated in “a local United States Public
Health Service Hospital” at no cost; court found that because the servicemember “never
has been under any obligation to pay the government for the medical and hospital services
he received,” he had not “incurred” a medical expense payable by under his medical
payments insurance provider); Gordon v. Fid. & Cas. Co. of N. Y., 120 S.E.2d 509, 513
(S.C. 1961) (career soldier, who was struck by an automobile and treated at a military
hospital, stipulated his medical care was free; court found that because there was “no
obligation on the part of the respondent to pay for the hospitalization he received at Fort
Jackson hospital, he ‘incurred’ no expense within the meaning of” his medical payments
provision).

18
 Relevant to the instant case, the Supreme Court of Minnesota, in Stout v.

AMCO Ins. Co., 645 N.W.2d 108 (Minn. 2002), specifically found that an individual whose

medical expenses from an auto accident were paid by the state Medicaid program had still

“incurred” a medical expense equal to the full amount charged by the provider. The court

found “that the medical expense incurred by Stout is the full amount reflected on his

medical bills, and not the amount that was paid in satisfaction of those bills as the result of

collateral transactions involving Stout’s health insurer.” Id., 645 N.W.2d at 113.
13

13
Auto Club cites as authority three cases on the meaning of “incurred” that
are inapposite. The facts and policy language in each of these cases are easily
distinguishable from the instant case. First, Auto Club cites to Newbury v. State Farm Fire
& Casualty Insurance Company of Bloomington, Ill., 184 P.3d 1021 (Mont. 2008), for the
proposition that it is not “objectively reasonable” under its policy for the plaintiff to expect
coverage for her medical expenses because her expenses were eventually paid by the
Medicaid program. In Newbury, the insured’s expenses were paid by a workers’
compensation carrier. Auto Club fails to note, however, that the Newbury court found the
insured had no objectively reasonable expectation of medical payments coverage because
the insurance policy at issue expressly stated there was “no coverage ‘to the extent workers’
compensation benefits are required to be payable.’” Id. at 1023. In the instant case, the
Auto Club medical payments provision contains no such limiting language.

Second, Auto Club cites Atkins v. Great American Insurance Company, 189
S.E.2d 501 (N.C. 1972) for the proposition that an insured cannot seek medical benefits
coverage when no medical expense has been incurred. However, the policy at issue in
Atkins required an insured to incur medical expenses within one year of an accident, and
the Atkins plaintiff was not entitled to coverage because she never had medical services
performed, never received a bill for services, and never paid for such services, within the
one-year period.

Finally, Auto Club relies upon State Farm Mutual Automobile Insurance
Company v. Bowers, 500 S.E.2d 212 (Va. 1998). In Bowers, the insured submitted a claim
against his auto policy’s medical payments provision for an entire medical bill totaling
$1,586. The insurance company accidentally paid the insured $31,586, and when the
company asked for a return of the $30,000 overpayment, the insured said “he had spent the
Continued . . .
19
 One of the leading treatises on insurance law, Couch on Insurance, also notes

there is no ambiguity in a medical payments provision written like the one used by Auto

Club in its contract. The treatise finds the law to be clear: when an insured “incurs” a

medical expense because of an automobile accident, then the entire expense must be paid

to the insured by the automobile’s insurer under a medical payments provision:

The medical payments provision most commonly
requires that the insured have “incurred” or “actually incurred”
medical expenses. The clause contemplates a liability thrust
upon the insured by act or operation of law. Stated otherwise,
expenses are incurred within medical payments coverage only
when a person has become obligated to pay for them.

Additionally, the requirement that bills be “incurred” or
“actually incurred” does not mean that the insured must have
paid his or her bills in full.

11 Steven Plitt, et al., Couch on Insurance § 158:10.

We are bound by the terms of Auto Club’s insurance contract with the

plaintiff, and we can neither add to nor delete language from that contract at the insistence

of a party. “It is not the right or province of a court to alter, pervert or destroy the clear

meaning and intent of the parties as expressed in unambiguous language in their written

entire overpayment and refused to repay the balance.” Id. at 213. Thereafter, the insurance
company sued seeking both the overpayment as well as a declaration that it did not have to
reimburse the insured amounts that were offset by the insured’s health-care providers under
an agreement with the insured’s health insurance plan. The Virginia court relied upon a
Virginia statute – one not found in our law – that defined when a medical bill is “incurred”
and found the insured was never “‘legally obligated to pay’ the amounts written off by the
providers.” Id. at 214 n.4. Hence, the Bowers court found the amounts the insured
“‘incurred’ were the amounts that the health-care providers accepted as full payment for
their services rendered to him.” Id.

20
contract or to make a new or different contract for them.” Syl. pt. 3, Cotiga Dev. Co. v.

United Fuel Gas Co., 147 W. Va. 484, 128 S.E.2d 626 (1962). “So long as an otherwise

valid contract does not contravene some principle of law or public policy, it must stand and

become operative as the deliberate act of the parties.” Id. at 493, 128 S.E.2d at 633.

As written, the contract provision required Auto Club to pay any reasonable

medical expense “incurred” by the plaintiff because of a bodily injury sustained in a

collision. Clearly, when Auto Club drafted the medical payments provision, it intended to

bind itself to pay the amount the plaintiff initially became liable to pay her medical

providers, and not the amounts that were eventually paid in a collateral transaction on the

plaintiff’s behalf. Under a common sense understanding of the plain language of the

contract, the plaintiff “incurred” medical expenses at the time her physical therapy services

were rendered, and those expenses were subject to payment under the medical payments

provision. Auto Club does not dispute that the plaintiff suffered injuries or that her medical

treatment was reasonable and necessary. Instead, it simply refused to pay the plaintiff’s

physical therapy bill because the plaintiff was a recipient of medical insurance through the

Medicaid program. Auto Club thereafter sought to excuse its nonpayment by paying a

lesser amount to the Medicaid program. Auto Club elected to pay money toward the

Medicaid subrogation lien without consulting the plaintiff and despite it being the

plaintiff’s exclusive statutory duty to address the lien at the conclusion of her claim against

the tortfeasor. See W. Va. Code § 9-5-11(d)(1). Importantly, Auto Club does not contend,

nor do we find, that the medical payments provision contains any exclusionary or limiting

21
language permitting Auto Club to withhold payment, reduce the payment, or make

payment to a stranger to the contract (like the Medicaid program). Auto Club drafted the

language of the insurance contract, and the power lies with Auto Club to change that

language – in the future – if it so chooses.

Accordingly, we find no error in the circuit court’s decision to grant partial

summary judgment to the plaintiff, and to deny Auto Club’s motion for summary judgment.

B. Costs and Attorney’s Fees

Auto Club’s second assignment of error challenges the circuit court’s

decision to award $34,026.75 in costs and attorney’s fees to the plaintiff.

This Court has long held that where “an insurance carrier refuses to pay any

type of first-party claim” and the first-party policyholder substantially prevails against the

insurance carrier in litigation, the policyholder is entitled to recover their costs, attorney’s

fees, and consequential damages resulting from the insurance carrier’s delay in payment of

the claim. Miller v. Fluharty, 201 W. Va. 685, 693-94, 500 S.E.2d 310, 318-19 (1997).

Decades ago, Justice Neely noted that courts nationwide have adopted fee-shifting rules in

insurance contract interpretation cases “in recognition of the fact that, when an insured

purchases a contract of insurance, he buys insurance—not a lot of vexatious, time-

consuming, expensive litigation with his insurer.” Hayseeds, Inc. v. State Farm Fire &

Cas., 177 W. Va. 323, 329, 352 S.E.2d 73, 79 (1986). Accordingly, we see no error in the

circuit court’s decision to award fees and costs to the plaintiff.

22
 Auto Club also challenges the means by which plaintiff’s counsel calculated

their fees. The record shows that two lawyers worked on the plaintiff’s case. Auto Club

asserts that the request for attorney’s fees submitted to the circuit court contained

“excessive time entries, duplicative entries of multiple attorneys performing the same task,

and block billing entries that did not actually specify the legal task being performed.” Auto

Club suggests that the underlying case was not so complex as to require both of the

plaintiff’s lawyers to review all case filings, despite the case record showing Auto Club

was also represented by two lawyers.

Auto Club made its assertions regarding the billing entries by plaintiff’s

counsel to the circuit court. The record shows that the plaintiff’s lawyers responded to

each assertion by Auto Club, and, as a result, reduced their original fee request of

$35,082.50 to $34,026.25. The circuit court considered the parties’ positions in light of

our seminal holding in Aetna Casualty & Surety Company v. Pitrolo, 176 W. Va. 190, 342

S.E.2d 156 (1986), where we held in Syllabus Point 4:

Where attorney’s fees are sought against a third party,
the test of what should be considered a reasonable fee is
determined not solely by the fee arrangement between the
attorney and his client. The reasonableness of attorney’s fees
is generally based on broader factors such as: (1) the time and
labor required; (2) the novelty and difficulty of the questions;
(3) the skill requisite to perform the legal service properly; (4)
the preclusion of other employment by the attorney due to
acceptance of the case; (5) the customary fee; (6) whether the
fee is fixed or contingent; (7) time limitations imposed by the
client or the circumstances; (8) the amount involved and the
results obtained; (9) the experience, reputation, and ability of
the attorneys; (10) the undesirability of the case; (11) the nature

23
 and length of the professional relationship with the client; and
(12) awards in similar cases.

The record shows the circuit court properly performed its fee analysis under Pitrolo and

concluded that the plaintiff’s attorneys had conducted the litigation in an efficient manner.

The circuit court acknowledged that the plaintiff’s lawyers’ entries, such as for block

billing, made it more difficult to assess whether the time spent on particular tasks was

reasonable. However, the circuit court ultimately determined the fee request was similar

to awards made in other cases and was “imminently reasonable.” On this record, we see

no abuse of discretion by the circuit court in the amount of costs and attorney’s fees it

awarded.

IV. Conclusion

As set forth above, we find no error in the circuit court’s orders granting

partial summary judgment to the plaintiff, denying summary judgment to Auto Club, and

awarding the plaintiff her attorney’s fees.

Affirmed.

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