[This opinion has been published in Ohio Official Reports at
78 Ohio St.3d 485.]
LAYMAN ET AL.; OHIO DEPARTMENT OF HUMAN SERVICES, APPELLEE, v. WOO
ET AL., APPELLANTS.
[Cite as Layman v. Woo, 1997-Ohio-195.]
Medical malpractice—Statutory construction—R.C. 5101.58 is an exception to
former R.C. 2305.27.
(No. 96-390—Submitted March 19, 1997—Decided May 28, 1997.)
APPEAL from the Court of Appeals for Ashtabula County, No. 95-A-0036.
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{¶ 1} On November 29, 1993, plaintiff Natalie Layman, the mother and
guardian of Matthew Layman, filed a medical malpractice complaint in the
Ashtabula County Court of Common Pleas against defendant-appellants, C.K. Woo
and Ashtabula County Medical Center.1 In count one of the complaint, plaintiff
alleged that the defendants were negligent in delivering her son and that their
negligence proximately caused him to sustain profound mental retardation and
severe physical handicaps. Plaintiff sought compensatory damages, including
future custodial care expenses for Matthew. In count two of the complaint,
plaintiff, along with her husband, Kevin Layman, set forth a loss-of-consortium
claim. In this count, they also sought past and future medical damages but later
struck this claim.
{¶ 2} After the lawsuit was filed, appellee, Ohio Department of Human
Services (“ODHS”), sought reimbursement for the money it had expended through
Medicaid for Matthew’s medical care. ODHS filed a complaint in intervention,
asserting a right of subrogation pursuant to R.C. 5101.58 against defendants and a
1. Plaintiffs dismissed other parties named in the complaint from the lawsuit prior to trial.
SUPREME COURT OF OHIO
cross-claim against plaintiff for reimbursement of past and future medical benefits
it had provided for Matthew Layman.
{¶ 3} Plaintiffs filed a motion to dismiss ODHS’s complaint and cross-claim. Plaintiffs relied upon cases interpreting R.C. 2305.27 and argued that ODHS
could not recover Medicaid payments it had expended on Matthew’s behalf.
Additionally, plaintiffs said there was no right to subrogation because they had
struck their claim for past and future medical expenses. ODHS filed a
memorandum in opposition to plaintiffs’ motion to dismiss. ODHS argued inter
alia that R.C. 5101.58 provides the department with a statutory right to subrogation
and is an exception to R.C. 2305.27.
{¶ 4} On the first day of trial, the court orally granted plaintiffs’ motion to
dismiss ODHS’s complaint in intervention. The case proceeded without ODHS as
a party. The jury returned a verdict for the plaintiffs, but prior to the jury’s
determining the amount of damages, the plaintiffs reached a settlement with
defendants on the amount. The parties subsequently filed a notice of dismissal. An
entry granting plaintiffs’ motion to dismiss ODHS was later journalized.
{¶ 5} ODHS appealed the trial court’s dismissal of its complaint in
intervention. The court of appeals reversed the trial court’s dismissal of ODHS’s
complaint and remanded the cause. According to the court of appeals, R.C. 5101.58
expressly provides ODHS with a right of subrogation.
{¶ 6} The cause is now before this court upon the allowance of a
discretionary appeal.
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Betty D. Montgomery, Attorney General, and Robert J. Byrne, Assistant
Attorney General, for appellee Ohio Department of Human Services.
Jacobson, Maynard, Tuschman & Kalur Co., L.P.A., Elizabeth E. Baer,
Janis L. Small, Donald H. Switzer and Joseph A. Farchione, Jr., for appellants.
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January Term, 1997
FRANCIS E. SWEENEY, SR., J.
{¶ 7} In this case, we are asked to determine whether ODHS has a right of
subrogation against defendants in a medical malpractice lawsuit for Medicaid
benefits it expended on behalf of an injured plaintiff.
{¶ 8} Appellants contend that R.C. 2305.27 prohibits ODHS from
recovering Medicaid benefits from a defendant found negligent in a medical
malpractice lawsuit. R.C. 2305.27, which has since been repealed by 1996
Am.Sub.H.B. No. 350,2 provided:
“Except as provided in section 2743.02 of the Revised Code, in any medical
claim, as defined in division (D) of section 2305.11 of the Revised Code, an award
of damages shall not be reduced by insurance proceeds or payments or other
benefits paid under any insurance policy or contract where the premium or cost of
such insurance policy or contract was paid either by or for the person who has
obtained the award, or by his employer, or both, or by direct payments from his
employer, but shall be reduced by any collateral recovery for medical and hospital
care, custodial care or rehabilitation services, and loss of earned income. Unless
otherwise expressly provided by statute, a collateral source of indemnity shall not
be subrogated to the claimant against a physician, podiatrist, or hospital.”
(Emphasis added.)
{¶ 9} Appellee ODHS concedes that R.C. 2305.27 bars some subrogation.
However, in relying upon the last sentence of R.C. 2305.27, appellee argues that
there may be statutory exceptions to the general rule that collateral sources not be
subrogated. Appellee maintains that R.C. 5101.58 is such an exception to R.C.
2305.27. R.C. 5101.58 states:
2. R.C. 2305.27 was repealed effective January 27, 1997. 1996 Am.Sub.H.B. No. 350 also amended
R.C. 2317.45, which discusses collateral benefits in tort actions.
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SUPREME COURT OF OHIO
“The acceptance of aid pursuant to Chapter 5107., 5111., or 5115. of the
Revised Code gives a right of subrogation to the department of human services of
any county against the liability of a third party for the cost of medical services and
care arising out of injury, disease, or disability of the recipient. …”
{¶ 10} It is a basic principle of statutory construction that unless a different
intention appears in a statute, words in a statute shall be construed in their ordinary
and natural meaning to effectuate the intent of the legislature. State ex rel. Gareau
v. Stillman (1969), 18 Ohio St.2d 63,
47 O.O.2d 187,
247 N.E.2d 461. Thus, when
construing a statute, “none of the language employed therein should be disregarded
….” Carter v. Youngstown Div. of Water (1946),
146 Ohio St. 203, 32 O.O.184,
65 N.E.2d 63, paragraph one of the syllabus.
{¶ 11} In applying these principles of statutory construction, we find that
R.C. 2305.27 permits subrogation against a physician, podiatrist, or hospital if a
statute expressly provides for a right of subrogation. The inclusion of the words
“[u]nless otherwise expressly provided by statute” in R.C. 2305.27 reveals that the
legislature intended that there could be statutory exceptions to the statute’s bar
against subrogation. R.C. 5101.58 is a statute which “otherwise expressly
provide[s]” for a right to subrogation to a department of human services. Therefore,
R.C. 5101.58 is an exception to R.C. 2305.27.
{¶ 12} Appellants, however, believe that these two statutes conflict and that
R.C. 2305.27 prevails over R.C. 5101.58. In making this argument, appellants rely
primarily upon the appellate court decision of Holaday v. Bethesda Hosp. (1986),
29 Ohio App.3d 347, 29 OBR 475,
505 N.E.2d 1003. In Holaday, ODHS sought
reimbursement for medical services rendered to the plaintiff. The trial court held,
in part, that the Ohio Department of Human Services may not be subrogated to a
claimant against a physician, podiatrist or hospital. In reaching its determination,
the court relied upon R.C. 1.51, which provides: “If a general provision conflicts
with a special or local provision, they shall be construed, if possible, so that effect
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January Term, 1997
is given to both. If the conflict between the provisions is irreconcilable, the special
or local provision prevails as an exception to the general provision, unless the
general provision is the later adoption and the manifest intent is that the general
provision prevail.” Thus, the court reasoned:
“We must agree with the trial court that R.C. 2305.27 is a special provision
and that R.C. 5101.58 is a general provision which obviously conflict. We deem
the conflict between the provisions to be irreconcilable. Further, we find no
manifest intent therein that the later enacted general provision is to prevail. We
point out that had the legislature intended R.C. 5101.58 to prevail it could have
manifested its intent either by stating that medical malpractice was included within
the section or by including R.C. 2305.27 by number within R.C. 5101.58.” Id. at
350, 29 OBR at 479,
505 N.E.2d at 1006-1007.
{¶ 13} We believe the court’s focus and reasoning in the Holaday decision
is misplaced.3 In holding that R.C. 5101.58 irreconcilably conflicts with R.C.
2305.27, the Holaday court failed to consider the specific language of R.C. 2305.27
that states that “[u]nless otherwise expressly provided by statute” a collateral
source shall not be subrogated. (Emphasis added.) In giving plain meaning to these
words, we find no conflict between the statutes. Accordingly, pursuant to R.C.
5101.58 a department of human services may assert a right of subrogation to
recover Medicaid benefits against defendants in a medical malpractice lawsuit.
{¶ 14} Appellants also argue that since the plaintiffs withdrew all claims for
past and future medical expenses, ODHS is prohibited from recovering Medicaid
benefits under R.C. 5101.58. Appellants contend that since a claim for subrogation
3. Appellants also cite Hodge v. Middletown Hosp. Assn. (1991), 62 Ohio St.3d 236, 239-240,
581
N.E.2d 529, 532, in urging that we apply the Holaday decision. Although we briefly discussed
Holaday, we neither approved nor disapproved of it in Hodge. We simply distinguished Medicare
Part A benefits (at issue in Hodge) from Medicaid benefits (which were involved in Holaday) and
held that Medicare Part A benefits fall under the definition of “insurance” and do not reduce medical
malpractice damage awards.
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is derivative in nature (see Chemtrol Adhesives, Inc. v. Am. Mfrs. Mut. Ins. Co.
[1989], 42 Ohio St.3d 40, 42,
537 N.E.2d 624, 628), any right ODHS had
terminated when the plaintiffs withdrew the claim for past and future medical
expenses. This, too, is a false argument. The fact that this claim was withdrawn is
of no significance. Under R.C. 5101.58, ODHS, as the real party in interest, still
has the right to intervene or join in an action to enforce its subrogation interests.
Consequently, ODHS is not affected by the plaintiffs’ withdrawal of their claim for
past and future medical damages.
{¶ 15} Accordingly, the judgment of the court of appeals is affirmed.
Judgment affirmed.
MOYER, C.J., DOUGLAS, RESNICK, PFEIFER, COOK and LUNDBERG
STRATTON, JJ., concur.
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