Larry Magrinat v. Myra Maddox

Court of Civil Appeals of Alabama

220 So. 3d 1081 | Aug. 26, 2016


Magrinat and Maddox were involved in an automobile collision in Lee County, Alabama. Plaintiff incurred certain medical expenses resulting from injuries sustained as a result of Defendant’s negligent operation of a motor vehicle. Plaintiff was without medical insurance, and received medical care from Dr. Davis Buggay for an injury to Plaintiff’s arm. Plaintiff would owe a debt to Dr. Buggay for the surgery of $9,281.

Dr. Buggay sold the debt of $9,281 for $3,000 to a third-party organization, OrthoUSA, who invested in the debt, with the intention of recovering the full balance from Plaintiff. The case was tried by bench trial in Lee County, and plaintiff was awarded only the $3,000 paid to Dr. Buggay in compensatory damages resulting from the medical expense incurred from medical treatment rendered. Plaintiff appealed the judgment based on a matter of law that he was entitled to the full balance of his medical expense, which was then owed to OrthoUSA.

Defendant argued that plaintiff is not entitled to the full balance, but only what was actually paid to the treating physician, which is normally the case when insurance providers, or Medicare, negotiate a discounted rate to pay a treating physician. In those situations, Plaintiff is only required to reimburse their insurance provider, or Medicare, what was paid, not what was charged. However, there is a distinction here, that although the treating physician was paid a discounted rate, OrthoUSA intended on collecting the full balance from Plaintiff.

This was a matter of first impression in the State of Alabama, and the Alabama Court of Civil Appeals gave a specific ruling as follows: “when a third party purchases a medical provider's debt but the injured party who was treated remains responsible and liable for that debt in full, the injured party is entitled to recover as damages the amount the injured party owes, to the extent it is reasonable and necessary; the injured party is not limited to recovering the amount the medical provider agreed to accept from the third-party purchaser of that debt.”

The judgment was remanded to the Lee County Circuit Court with instructions to modify plaintiff’s compensatory damages in accordance with the Alabama Court of Civil Appeals’ ruling.

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