Christopher v. Sockwell

                 IN THE SUPREME COURT OF TENNESSEE

                                   AT NASHVILLE

                 FILED
                  May 28, 1996                FOR PUBLICATION

                Cecil W. Crowson
JAMES STAGGS, Successor and             )
              Appellate Court Clerk
Representative of Mary Staggs,          )     Filed: May 28, 1996
Deceased,                               )
                                        )
            Plaintiff/Appellant,        )     LAWRENCE CIRCUIT
                                        )
v.                                      )
                                        )    Hon. JIM T. HAMILTON,
NATIONAL HEALTH                         )          JUDGE
CORPORATION,                            )
                                        )
            Defendant/Appellee.         )   No. 01S01-9408-CV-00090




For Appellant:                                For Appellee:

Ben Boston                                    Paul B. Plant
Christopher V. Sockwell                       J. Jay Cheatwood
Boston, Bates & Holt                          Harwell, Plant & Cheatwood
Lawrenceburg, Tennessee                       Lawrenceburg, Tennessee




                           OPINION




TRIAL COURT REVERSED.                                  ANDERSON, C.J.
         We review the conclusions of law of the Special Workers' Compensation

Appeals Panel to determine whether an employee is entitled to collect post-

judgment interest on an award of discretionary costs or on medical expenses an

employer is ordered to repay to a third-party health insurance carrier.



         The trial court decided that under the general statutes regarding interest

on judgments, Tenn. Code Ann. §§ 47-14-121 and -122, an employee is entitled

to collect post-judgment interest on both the reimbursed medical expenses and

the award of discretionary costs. The Appeals Panel, however, concluded that

the employee is not entitled to post-judgment interest on either the reimbursed

medical expenses or the award of discretionary costs.



         For the reasons articulated below, we find that the conclusions of the

Special Workers’ Compensation Appeals Panel are correct, and the trial court is

therefore, reversed.




                                            BACKGROUND

         On December 19, 1990, Mary Staggs injured her back in the course of her

employment with the defendant, National Health Corporation, and thereafter filed

a complaint seeking workers' compensation benefits. At trial, the court awarded

Staggs1 permanent partial disability benefits and temporary total benefits. The

trial court also ordered National Health to reimburse Staggs for medical

expenses she had paid from her personal funds and to reimburse Metropolitan

Life Insurance Company, Staggs’ husband’s health insurance company, for all



         1
         Mar y Stag gs die d on J anu ary 29 , 199 3, wh ile the first a ppe al of th is cas e wa s pen ding in
this Court; she was survived by her husband and two minor children. Her husband, James
Staggs, was substituted as succ essor and represen tative of Mary Staggs by order of this Court
entered on May 25, 1993.

                                                      -2-
medical expenses paid by them. Litigation expenses were also awarded as

discretionary costs. The trial court decision was appealed, affirmed by this

Court, and remanded.



      Following remand, National Health tendered the amounts due under the

trial court order. Staggs accepted payment under protest and moved the court to

require National Health to pay interest on the sums due. The trial court ordered

that post-judgment interest be paid on the temporary total and permanent partial

disability benefits as prescribed by the Workers’ Compensation Act. In addition,

relying on the general statutes regarding interest on judgments, Tenn. Code Ann.

§§ 47-14-121 and -122, the court ordered that post-judgment interest be paid by

National Health to Staggs at the rate of 10 percent per year on the amount

awarded for discretionary costs ($1,466.33); on the amount reimbursed to

Metropolitan Life for medical expenses ($11,252.30); and on the sum Staggs

personally paid for medical expenses ($1,048.00).



      On appeal, National Health conceded that Staggs was entitled to post-

judgment interest on the medical expenses paid from her own funds, but

questioned the trial court’s decision allowing post-judgment interest on the award

of discretionary costs and the reimbursement of medical expenses to

Metropolitan Life Insurance Company.



      The Special Workers’ Compensation Appeals Panel concluded that

Staggs was not entitled to post-judgment interest on either the medical expenses

reimbursed to Metropolitan Life or the award of discretionary costs. Thereafter,

we granted Staggs’ motion for full court review and now review the conclusions

of law of the Appeals Panel de novo. See Tenn. Code Ann. § 50-6-225(e)(2)

(1991 & Supp. 1995).

                                        -3-
                        INTEREST ON MEDICAL EXPENSES

       Relying on Tenn.Code Ann. §§ 47-14-121 and -122, Staggs argues that

the Appeals Panel erred in concluding that an employee is not entitled to collect

post-judgment interest on medical expenses which the employer is ordered to

repay to a third-party insurer.



       Staggs contends that the trial court’s judgment, ordering National Health

to repay medical expenses to Metropolitan Life, is a money judgment and,

therefore, is subject to the general post-judgment interest statutes. Staggs also

argues that the Panel’s disallowance of interest on reimbursed medical bills

encourages employers to delay payments, and results in ”an unjust enrichment

that rewards the party at fault without reimbursing the innocent party for the use

of his or her funds."



       National Health responds that the Panel’s decision is correct - that an

employee is not entitled to collect post-judgment interest on any amount for

medical expenses which are paid by a third-party insurance carrier on behalf of

the employee and later reimbursed by an employer. National Health relies upon

West American Insurance Co. v. Montgomery, 861 S.W.2d 230 (Tenn. 1993)



       Staggs, however, argues that Montgomery is inapposite because this

case is governed by Tenn. Code Ann. §§ 47-14-121 and 122, the general post-

judgment interest statutes. We disagree.



       In Montgomery, we held that an employee is not entitled to collect post-

judgment interest on unaccrued workers’ compensation benefits. We stated that

allowing interest on unaccrued benefits "would not be in consonance with the

                                        -4-
purpose and intent of the W orkers Compensation Act and would result in unjust

enrichment to the employee." Montgomery, 861 S.W .2d at 232. Accordingly,

Montgomery stands for the proposition that an employee may not collect interest

unless and until the employee becomes entitled to receive the money on which

interest is sought to be imposed. Applying that principle to the facts in this case,

it is clear that Staggs claim for entitlement to post-judgment interest on the

money reimbursed to Metropolitan Life must fail.



       As we observed in Montgomery, an employee is not entitled to personally

receive payment for medical expenses unless he or she has personally paid the

medical expenses and is due reimbursement. Instead, employers must pay the

providers of medical care directly for incurred medical expenses. See Tenn.

Code Ann. § 50-6-204. Here, Staggs was never entitled to receive the money on

which she now seeks to collect post-judgment interest. National Health owed

that money to Metropolitan Life directly as reimbursement for the medical bills it

had paid. Accordingly, under the rationale articulated in Montgomery, Staggs is

not entitled to collect post-judgment interest on the reimbursed medical

expenses.



       Although the holding in Montgomery was based specifically upon the

interest provision of the workers' compensation statute, Tenn. Code Ann. § 50-6-

225(h), we also discussed the general statutes relating to post-judgment interest,

noting that while they provide for interest on every judgment “from the day on

which the jury or the court, sitting without a jury, returned the verdict without

regard to a motion for a new trial,”2 they do not “mean that the party securing the


       2
           Tenn. Code Ann. § 47-14-121 provides:

                 “Interest on judgments, including decrees, shall be computed at
                 the effective rate of ten percent (10%) per annum, except as may
                 be otherwise provided or permitted by statute; provided, that

                                               -5-
judgment may have interest on the entire judgment unless he is entitled to have

the use of the proceeds of the judgment from and after the date the judgment

was entered." Id. (emphasis added). Thus, in Montgomery we recognized that

the Legislature did not intend for a party to litigation to be unjustly enriched

through the payment of post-judgment interest. See also Price v. Price, 225

Tenn. 539, 472 S.W.2d 732 (1971)(interest accrued as of date party entitled to

money judgment).



       In this case, Staggs was never entitled to have the use of that portion of

the judgment reflecting the medical bills paid by Metropolitan Life on her behalf.

The trial court merely found that the defendant "is liable for all medical bills

incident to [the] injury which have been paid by [Metropolitan Life]. " Staggs

never used her own money to pay for these medical services, and therefore, an

award of interest would amount to unjust enrichment. Accordingly, we reverse

the trial court judgment and hold that neither Tenn. Code Ann. § 50-6-225(h) nor

Tenn. Code Ann. §§ 47-14-121 and -122 authorize the payment of post-

judgment interest to an employee on medical expenses initially paid by a third-

party health insurance carrier and reimbursed to that carrier by the employer.




              where a judgment is based on a note, contract, or other writing
              fixing a rate of interest within the limits provided in §47-14-103
              for that particular category of transaction, the judgment
              shall bear interest at the rate so fixed.”

       Tenn C ode Ann. § 47-14-12 2 provides:

              “Interest shall be computed on every judgment from the day
              on wh ich the jury or the court, sitting w ithout a jury,
              returned the verdict without regard to a motion for a new
              trial.”

                                              -6-
                INTEREST ON AWARD FOR DISCRETIONARY COSTS

       We next consider whether a litigant is entitled to collect post-judgment

interest on an award of discretionary costs. In this case, the trial court ordered

the defendant to pay interest in the amount of 10 percent per year on the award

of discretionary costs. The Appeals Panel, however, concluded that "[t]he

discretionary costs were an award, and not a judgment within the purview of

Tenn. Code Ann. § 47-14-122."3



       Arguing that the Appeals Panel’s conclusion is correct, National Health

relies upon Gatewood v. Palmer, 29 Tenn. 466 (1850). In that case, this Court

interpreted a predecessor interest statute which provided that "all judgments

entered up in any of the courts of record in this State, or by any justices of the

peace, shall bear interest until paid,” and concluded that it did not authorize the

collection of interest on a judgment for court costs. Id. at 469; see 1835 Tenn.

Pub. Acts, ch. 50, § 2; see also Green-Rea Co. v. Holman, 107 Tenn. 544, 546,

64 S.W. 889 (1901).



       Staggs argues that Gatewood is distinguishable because it involved court

costs, not discretionary costs, and because the decision in Gatewood was

rendered long before the Rules of Civil Procedure were promulgated. Staggs

contends that since she did not receive reimbursement of the litigation expenses

for two years, she is entitled to post-judgment interest.



       We disagree. In our view, there is no distinction between an award of

court costs and an award of discretionary costs when determining whether post-

judgment interest should be payable. We, therefore, apply and reaffirm the



       3
           See no te 2, supra.

                                         -7-
Gatewood rule that an award of discretionary costs is not a "judgment" on which

post-judgment interest is due under Tenn. Code Ann. §§ 47-14-121 and -122.

The trial court judgment is, therefore, reversed.




                                  CONCLUSION

       For the reasons discussed above, we conclude that Staggs is not entitled

to collect post-judgment interest on either the medical expenses which National

Health must repay to Metropolitan Life or on the award of discretionary costs.

Accordingly, the judgment of the trial court is reversed. Costs on appeal are

taxed to the plaintiff, James Staggs.




                                          RILEY ANDERSON, Chief Justice



CONCUR:

Drowota, Reid, and White, JJ.

Birch, J., not participating




                                        -8-