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plaintiffdefendantunjust enrichmentrestitution
plaintiffdefendantappealunjust enrichmentrestitution

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Blue Cross of Cent. New York, Inc. v. Wheeler, 93 A.D.2d 995, 461 N.Y.S.2d 624

Facts

Blue Cross and Blue Shield paid a total of $389.46 to Schuyler Hospital and Schuyler Medical Associates for services rendered to Elfriede Wheeler, the wife of the defendant, on January 17, 1980, and prior to July 31, 1980, respectively. The payments were made after the insurance policy had expired due to non-payment of premiums. The defendant denied any obligation to repay the amounts, claiming that the complaint failed to state a cause of action.

Plaintiffs, Blue Cross and Blue Shield, allege in their complaint that on January 17, 1980 Blue Cross paid $305.96 to Schuyler Hospital by mistake for services rendered to Elfriede Wheeler; that prior to July 31, 1980 Blue Shield paid $73.50 to Schuyler Medical Associates by mistake for services rendered to Elfriede Wheeler; and that Blue Cross and Blue Shield have demanded that the defendant repay the sums of money hereinabove set forth, but the defendant has refused and failed to do so and, therefore, owes $389.46 to the plaintiffs.

Issue

Whether the health insurer can recover money paid by mistake for services rendered to the defendant's wife, despite the insurance policy having expired.

Whether the health insurer can recover money paid by mistake for services rendered to the defendant's wife, despite the insurance policy having expired.

Rule

The law permitting recovery for monies paid by mistake is based on the principle of unjust enrichment, which requires a person who has been unjustly enriched at the expense of another to make restitution.

The law permitting a person to recover for monies paid by mistake is based upon the principle of unjust enrichment (44 N.Y.Jur., Payment, § 96). “A person who has been unjustly enriched at the expense of another is required to make restitution to the other.” ( Restatement, Restitution, § 1.)

Analysis

The court analyzed the principle of unjust enrichment and determined that the defendant may have benefited from the payments made by the plaintiffs for services rendered to his wife. If the plaintiffs could demonstrate that Elfriede Wheeler was indeed the defendant's wife at the time the services were provided, the defendant could be held responsible for the reasonable value of those services, thus satisfying his debt and saving him from incurring that expense.

Here defendant may have derived a benefit from the payments mistakenly made by the plaintiffs for the services supplied to Elfriede Wheeler. Upon a proper showing that she was the wife of the defendant at the time the services were rendered, the defendant may be responsible for the reasonable value of those services as necessaries furnished his wife. In that event the payments made by the plaintiffs would have satisfied his debt and saved him that expense.

Conclusion

The court modified the lower court's judgment to allow the plaintiffs to serve an amended complaint, indicating that there may be a valid cause of action for restitution.

Since the complaint is insufficient to support this cause of action, we agree with Special Term that the complaint should have been dismissed. It appears, however, that the plaintiffs may have a cause of action against the defendant and we, therefore, modify the judgment appealed from by granting the plaintiffs leave to serve an amended complaint within 20 days after the entry of the order of this court.

Who won?

The prevailing party was the plaintiffs, Blue Cross and Blue Shield, as the court allowed them to amend their complaint to potentially state a valid cause of action.

The court modified the lower court's judgment to allow the plaintiffs to serve an amended complaint, indicating that there may be a valid cause of action for restitution.

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