
    AMERICAN INTERNATIONAL UNDERWRITERS (SOUTH PACIFIC), LTD., Plaintiff v. AMERICAN SAMOA GOVERNMENT, FA'AFETAI (RUPI) HANIPALE, an incompetent, and LE'ALA R. HANIPALE his mother and guardian, Defendants
    High Court of American Samoa Trial Division
    CA. NO. 114-85
    December 4, 1986
    Before REES, Chief Justice, TAUANU'U, Chief .Associate Judge, and VAIVAO, Associate Judge.
    Counsel: For the Plaintiff, Roy J.D. Hall, Jr.
    For Defendant ASG, Donald Griesmann, Assistant Attorney General
    For Defendants Hanipale, Michael Kruse
   This is an action in interpleader. Rupi Hanipale was seriously injured while riding in a car insured by American International Underwriters (A.I.U.). The American Samoa Government (A.S.G.) provided Hanipale with medical care and paid for his transportation to Hawaii and for services there that could not be provided locally, all in accordance with A.S.C.A. § 13.0601. Hanipale demanded payment from A.I.U. on account of his injuries, and A.S.G. also demanded reimbursement from A.I.U. for Hanipale's medical expenses. A.I.U. has deposited into the registry of the High Court the sum of 010,000, the amount of bodily injury insurance provided by the policy, and asks that the Court declare whether A.S.G. or Hanipale is entitled to the money.

Counsel for Hanipale argues that A.S.G. may not recover under the policy because the territorial statute providing for direct actions against insurance companies, A.S.C.A. & 22.2018, purports to create such actions only for- "an injured person or his heirs representatives.* Counsel contends that where the policy provision sued upon covers bodily injuries, the term "injured person" in the statute should be construed to refer only to the person who has sustained bodily injuries, not to a party such as A.S.G. who sustains economic injuries on account of another person's bodily injuries.

In support of this contention, counsel for Hanipale cites Sciaraffe v. Debler, 23 N.E. 2d 111 (Mass. 1939), and Franklin Casualty Insurance Company v. Jones, 362 P. 2d 964 (Okla. 1961). Each of these cases denied the right of a doctor to maintain a direct action against an insurance company to collect his fees for treating a person whose injuries were covered by the company's policy. The reference to physicians in Sciaraffa is dictum and is unsupported by analysis. The case seems to hold that the "voluntary payment" by a son of his own medical expenses, which his father was legally obliged to pay, did not entitle the son to maintain an action against the insurance company for reimbursement of these expenses. The Franklin case, on the other hand, was not particularly concerned with the "voluntary" nature of the doctor's services, holding instead that the doctor was "too far removed* from the injuries "to receive the benefits" of the bodily injury clause. 362 P.2d at 966. He was, in other words, an "incidental" rather than an "intended" beneficiary of the policy, and therefore could not sue upon it. See id. Counsel for A.S.G., however, cites cases in which federal hospitals providing services under a statutory obligation are distinguished from mere "volunteer" doctors and thus allowed to maintain direct actions. See, e.g., United States v. Government Employees Insurance Co., 461 F.2d 58, 60 (1972):

ITIhe United States was not a volunteer? it, in rendering the service, was discharging a statutory obligation, little different from the common-law obligation of a parent to a minor child, and like the parent, it is entitled to recover for its expenses incurred by reason of its statutory obligation to the insured.

See also United States v. United Services Automobile Association, 431 F.2d 735 (1970), cert. den., 400 U.S. 992 (1971); United States v. State Farm Mutual Automobile Insurance Co., 455 F.2d 789 (1972).

We are persuaded by the analogy between A.S.G. and a parent who pays medical expenses in fulfilment of a legal obligation. Indeed, the general pattern of the decisions cited by both sides is that a person can maintain a direct action against an insurance company if and only if he could have maintained an action against the insured tortfeasor. This seems fully consistent with the central purposes of direct action statutes: to simplify litigation and to allow an injured person to recover under a policy even if the insured tortfeasor has become insolvent or unavailable. See 12A Couch on Insurance 2d <Rev'd. Ed. 1981) § 45:798.

Other cases cited by the plaintiff, to the effect that "bodily injury" does not include loss of consortium by the injured person's spouse or emotional distress at having one's constitutional rights violated, do not contradict this conclusion. In this case it is not questioned •that Hanipale suffered bodily injuries. If he had been legally responsible for his oca medical bills, he clearly could have recovered for them under the policy. With regard to the medical bills A.S.G. stands in Hanipaie's place as the real party in interest. If A.S.G. were the only claimant in this case we would be strongly inclined to allow recovery --- if not on the ground that A.S.G. is an "injured person” within the meaning of the statute then on the equitable principle of subrogation, whereby a person who is legally obliged to pay a debt-of another person and who actually does pay that debt acquires the legal rights of the creditor.

The case actually before us, however, is somewhat more complicated. The question is not whether a government agency which is required to pay an injured person's medical bills can recover against the tortfeasor's insurer, but whether the agency is entitled to funds which would otherwise become the property of the injured person himself. Although there has been no evidentiary hearing in this case, it is uncantroverted that Hanipale suffered serious brain damage requiring extended hospitalization and rendering him incompetent to manage his own affairs. A.I.U., in whose interest it would be understate rather than to exaggerate the extent of the losses suffered by Hanipale, conceded that he is entitled to recover the entire amount at stake in this case, unless A.S,B. is held to have a claim superior to that of Hanipale.

This question has more to do with A.S.G. A. §' 13. CiSUi, the law providing free medical services for American Samoans, than with the direct action statute. The Fono, in providing such services, was obviously free to attach the condition that under certain circumstances the patient would be requiied to reimburse the government. Although the language of the statute contains no explicit conditions, it is arguable that the legislature that enacted the statute, had it anticipated the present circumstances, would have regarded them as an implicit exception to the general rule that no American Samoan should be required to reimburse the government for medical care.

Even though the Fono chose to impose no other "means test" --- even though the very wealthiest citizens are not required to pay for their treatment --- it can be argued, and defendant A.S.G. does argue, that there is a logical distinction between (a) having money and <b) having received money on account of the injuries for which medical care is needed. We can find no basis, however, for imputing to the Fono the desire to make such a distinction. If Hanipale had been receiving compensation for his injury from an employer or a government agency, or if he had been given a large sum of money by a wealthy benefactor who sympathized with his plight, A.S.G. apparently concedes that it would not be entitled to reimbursement. See A.S.G. Answers to Interrogatories, #8. This would be true even though if Hanipale had not been an American Samoan and had been responsible for his own medical bills, he would have had to pay them out of the funds thus acquired.

In this case Hanipale is entitled to receive compensation from the tortfeasor's insurer to compensate him for the pain and suffering he has endured.. The law regards such injuries as compensable not on the ground that injured persons should receive windfalls, but on the ground that they have suffered real injuries that they had a legal right not to be made to suffer. <This is not to say that juries and judges do not sometimes give awards that might look more like windfalls than like compensation. But the facts of this case do not suggest that the insurance company has contrived to bestow such a windfall on Hanipale.) An award for pain and suffering is, in other words, not inferior in rank or dignity to any other entitlement a person might have. We see no reason to make of such an award a unique exception to the rule that no American Samoan is required to reimburse the government for medical care, no matter what the amount or source of his wealth.

Nor should it make any difference that in this case A.S.G. made a demand on A.l.U. before A.I.U. had actually disbursed the funds to Hanipale. If a policy contains a medical payment provision, or a bodily injury provision whose limit will not be exhausted by just compensation to the injured person himself, then we believe A.S.G. has the right to reimbursement from the insurer for its expenses in connection with a covered . injury. Where, however, the effect of a claim by A.S.G. would be to deprive the injured person of funds to which he is otherwise entitled, we believe such a claim to be contrary to the clear purpose of A.S.C.A. § 13.0601, and therefore barred. Judgment •will be entered for defendant Hanipale. 
      
       Indeed, one of the cases seems to support the contention that a husband can sue an insurance company for his losses suffered as a result of a covered injury to his wife. New Hampshire Insurance Company v. Bisson, 449 A.2d 1226 (N.H. 1982), affirmed a trial court judgment that an action for loss of consortium "arises from the bodily injury to" the spouse, but was not a separate bodily injury. Thus under a policy limit of $20,000 per person and $40,000 per incident, "the policy limit has been exhausted by the payment" of $20,000 to the wife, and the husband could not recover an additional 69,000 on the theory that his was a separate bodily injury triggering the 640,000 limit. Id. at 1227. The strong implication is that the husband could have recovered under the policy if the 620,OOO limit had not been exhausted.
     
      
       See generally Dobbs on Remedies 251 0 973) <citations omitted):
      £Slubrogation is ... a remedy invoked by courts --- originally equity courts --- to prevent unjust enrichment, and for this purpose it is appropriate in any case where restitution is warranted and the remedy can be given without working an injustice. . . .
      Subrogation simply , means substitution of one person for another % that is, one person is allowed to stand in the shoes of another and assert his rights. , . . ETlfae pattern almost always looks something like thisí A debtor owes money to a creditor. For some reason . . . 'the plaintiff pays the debtor's debt, thus satisfying the creditor's claim against the debtor. If’ there is no legitimate reason for the plaintiff's intervention . . . the plaintiff will he described in derogatory terms as a volunteer and cast into legal outer-darkness. On the other- hand, if the plaintiff paid £tlhe defat for some good reason ... I the debtor! is unjustly enriched. ... [lit seems entirely just to - give the plaintiff the same right's held by the creditor whose claim he discharged.’
     
      
       The amount of such compensation will in many cases require a trial. On the state of the pleadings and the record, and especially in light of A.I.U's apparent willingness to settle- with Hanipale before A.S.G. had made its claim, we do not believe this to be such a case.
     