Mr. Crockett alleged that he had incurred medical expenses in the amount of $4,165.80, and that Shelter had paid only $2,706.68 and refused to pay the balance. Mr. Carter alleged that he had incurred medical expenses in the amount of $10,443.47, that Shelter had paid only $915 in benefits, and that Shelter had refused to pay the balance up to the policy limit of $5,000.

In addition to payment of their medical expenses, Mr. Crockett and Mr. Carter sought a statutory penalty, fees, and interest.

Shelter moved for summary judgment. Shelter contended that the medical providers for Mr. Crockett and Mr. Carter had been paid at a reduced rate that satisfied the medical expenses of Mr. Crockett and Mr. Carter in full.

For their part, Mr. Crockett and Mr. Carter contended that they were entitled to additional funds under the policy's medical benefits provision because the policy's language was ambiguous and void as contrary to public policy. They argued that their counsel negotiated with the medical providers to take less than the full amount of the bills in satisfaction of the debt and that they were entitled to the difference, up to the policy limits, because the phrase "the amount for which we can discharge" in the definition of "reasonable charges" in the Shelter policy could reasonably be interpreted to mean the amount for which Shelter itself was responsible for discharging.

The trial court granted Shelter's motion and the dispute reached the Arkansas Supreme Court.

The Shelter Policy

The Shelter policy stated that,

we will pay the reasonable charges for necessary goods and services for the treatment of bodily injury sustained by an insured . . .

It defined "reasonable charges" as the lesser of:

(a) The amount for which we can discharge the insured's entire obligation to the person providing the goods and services; or

(b) The charges incurred for goods and services that in our judgment, are within the range of charges for the same or similar goods and services, in the geographic area where the services are rendered or the goods are purchased.

The Arkansas Supreme Court's Decision

The court affirmed.

In its decision, the court found that the policy language was not ambiguous and that there was "no reasonable interpretation of the term 'discharge' that could render it applicable to negotiating a lower amount as opposed to paying the amount."

In the court's opinion, Shelter had discharged Mr. Crockett and Mr. Carter's debts to their medical providers through its payments, and the trial court had not erred in granting summary judgment on this basis.

Finally, the court rejected the contention by Mr. Crockett and Mr. Carter that they were entitled to receive

payment of the difference between what the medical providers billed and the amount the providers agreed to accept from Shelter up to $5,000. The court found nothing in Arkansas law that would permit them to receive the difference between what the providers had billed and what they had accepted as full satisfaction of the debt. Moreover, the court concluded, such a decision would not reflect "sound public policy," as it would result in insurers providing benefits in addition to medical benefits, which was neither required by Arkansas law nor contemplated by the Shelter policies.

The case is Crockett v. Proctor, No.: CV-18-389 (Ark. Dec. 5, 2019).