The United States seeks reimbursement from the defendant insurance company for the cost of medical care provided to a veteran injured in an automobile accident. The defendant had issued to the veteran an automobile insurance policy with medical payments coverage. The district court held that Louisiana courts would deny recovery under the policy where no expense had been “incurred” by the insured, free medical services having been provided by the Government. We reverse and remand.
The Government argues that the district court erred in applying state law and that federal law governs. We need not address this rather thorny ehoice-oflaws question.
See, e. g., United States v. Nationwide Mutual Insurance Co.,
On May 25, 1972, Kenneth A. Curtis, an air force veteran, was injured while driving his automobile. In accordance with the provisions of 38 U.S.C.A. § 610, 1 the United States provided Curtis medical treatment in a Veterans Administration hospital. These services were rendered without charge to Curtis.
At the time of the accident, Curtis was covered by an automobile insurance policy with Automobile Club Insurance Company. That policy provided $5,000 coverage for all reasonable medical expenses incurred “[t]o or for the named insured” unless the medical expense is paid or payable under the terms of “workmen’s compensation or disability benefits law or any similar law.” 2
Curtis received $521.57 from the insurer for his private medical expenses. The United States sought payment from the insurer for the remainder of the policy coverage ($4,478.43) to cover the expenses incurred on behalf of Curtis. Following the district court’s granting of summary judgment in favor of the insurer, the Government brought this appeal.
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The terms of the insurance policy clearly establish the Government as a third party beneficiary. The policy obligates the insurer to pay, within certain limits not pertinent to this case, all reasonable medical expenses incurred “to or for” the insured and provides that “[t]he company may pay the injured person or any person or organization rendering the services . . . .” Indisputably the Government rendered medical services for the insured veteran. Louisiana recognizes the right of a third party beneficiary to sue on a contract if the contract clearly manifests an intention to confer a benefit on the third party. La.Stat. Ann. — Civil Code Arts. 1890, 1902.
See Fontenot v. Marquette Casualty Co.,
The Louisiana state court cases relied upon by the district court,
Irby v. Government Employees Insurance Co.,
Moreover, even the dicta in
Drearr
upon which defendant relies (“Neither has the government any interest in any insurance coverage the veteran may have for ‘the expenses incurred,’ . . .”,
Drearr,
Similar contractual provisions have been construed in
United States v. United Services Automobile Association,
The district court’s decision that the United States could not recover where no expenses had been personally incurred by the insured made unnecessary its consideration of whether the policy’s exclu
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sionary clause barred the Government’s recovery. That exclusionary clause provides that the “policy does not apply to the extent that any medical expense is paid . . . to or on behalf of the injured person under the provisions of any . . . workmen’s compensation or disability benefits law or any similar law.” This clause has been construed by several courts, including this Circuit, and it has been consistently held not to preclude the United States from recovering under a private insurance policy for medical care furnished without cost to the insured.
United States v. Government Employees Insurance Co.,
We find no Louisiana authority which would require a different result, assuming state law to be applicable to this case. Both
Walker v. Louisiana Hospital Service, Inc.,
Neither are we persuaded by defendant’s argument that the rationale of the exclusionary clause is that the insurer is not to be held liable for medical expenses under the policy when there are sources of free medical services provided by law on which the insured may rely. We agree with the Government that a better explanation of the clause is that it is designed to prevent double recovery by the insured. Thus, if he is compensated by benefit of a reimbursement plan, he cannot collect again from the insurer. No such double recovery exists in the present suit. Here the insurer is obligated to pay for injuries covered under the terms of the policy. Under these circumstances, the exclusionary clause presents no bar to the Government’s recovery.
We reverse and remand to the district court, with instructions to enter judgment in favor of the Government for the remainder of the policy coverage.
Reversed and remanded.
Notes
. This section provides in pertinent part:
(a) The Administrator, within the limits of Veterans’ Administration facilities, may furnish hospital care or nursing home care which he determines is needed to—
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(1)(B) any veteran for non-service connected disability if he is unable to defray the expenses of necessary medical care
. The insurance policy in question provides coverage in the following terms:
Medical Payments. To pay all reasonable expenses incurred within one year from the date of accident for necessary medical, surgical, X-ray, and dental services . . :
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1: To or for the named insured (a) while occupying the owned automobile.
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Exclusions: This policy does not apply . . . to bodily injury
(f) to the extent that any medical expense is paid or payable to or on behalf of the injured person under the provisions of any
(4) workmen’s compensation or disability benefits law or any similar law.
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The company may pay the injured person or any person or organization rendering the services and such payment shall reduce the amount payable hereunder for such injury.