Darrell V. McGraw, Jr., Esq. Jeffrey K. Matherly, Esq.
Attorney General Heather G. Harlan, Esq.
Charleston, West Virginia Bowles Rice McDavid Graff
Rocco S. Fucillo, Esq. & Love PLLC
Assistant Attorney General
Catherine D. Munster, Esq.
McNeer, Highland, McMunn
and Varner, L.C.
Clarksburg, West Virginia
Attorney for the minor child,
The Opinion of the Court was delivered PER CURIAM.
1. 'It is the province of the Court, and not of the jury, to interpret a
written contract.' Syl. Pt. 1, Stephens v. Bartlett, 118 W. Va. 421, 191 S.E. 550 (1937).
Syllabus point 1, Orteza v. Monongalia County General Hospital, 173 W. Va. 461, 318
S.E.2d 40 (1984).
2. The mere fact that parties do not agree to the construction of a
contract does not render it ambiguous. The question as to whether a contract is ambiguous
is a question of law to be determined by the court. Syllabus point 1, Berkeley County
Public Service District v. Vitro Corporation of America, 152 W. Va. 252, 162 S.E.2d 189
3. Contract language is considered ambiguous where an agreement's
terms are inconsistent on their face or where the phraseology can support reasonable
differences of opinion as to the meaning of words employed and obligations undertaken.
Syllabus point 6, State ex rel. Frazier & Oxley, L.C. v. Cummings, 212 W. Va. 275, 569
S.E.2d 796 (2002).
4. Evidence of usage or custom may be considered in the construction
of language of a written instrument which is uncertain or ambiguous but may not be
considered to alter the legal effect of or to engraft stipulations upon language which is clear
and unambiguous. Syllabus point 5, Cotiga Development Co. v. United Fuel Gas Co., 147
W. Va. 484, 128 S.E.2d 626 (1962).
The appellant herein, the West Virginia Department of Health and Human Resources [hereinafter referred to as DHHR], appeals from an order entered April 29, 2002, by the Circuit Court of Harrison County. In that order, the circuit court ruled that DHHR was obligated to pay the appellee herein, Stepping Stone, Inc. [hereinafter referred to as Stepping Stone], a per diem rate for Joseph G.'s care equal to the amount to which Stepping Stone would have been entitled under Medicaid. On appeal to this Court, DHHR disputes that it is obligated to pay these monies to Stepping Stone. Upon a review of the parties' arguments, the pertinent authorities, and the record designated for appellate consideration, we affirm the decision of the Harrison County Circuit Court.
Pursuant to a scheduled review of juveniles within DHHR's custody and the
Medicaid services they were receiving, an Administrative Services Organization
(See footnote 5)
[hereinafter referred to as ASO] determined, in January, 2002, that Joseph no longer
required the services of Stepping Stone and, thus, that he was no longer entitled to the same.
Moreover, the ASO made this determination retroactive finding that Joseph's Medicaid
eligibility for said services had ceased on November 1, 2001. In order to permit Joseph to
nevertheless remain at Stepping Stone, his counsel moved the court, in February, 2002, for
an order to that effect. Ultimately, DHHR, Stepping Stone, and Joseph's counsel
acquiesced to an agreed order whereby DHHR would waive the independent living age
requirement and expedite efforts to place him in such a setting; in the meantime, Joseph
would remain at Stepping Stone. Because Joseph was not entitled to Stepping Stone's
Medicaid services, however, the instant controversy ensued as to whether Stepping Stone
could nonetheless recover such Medicaid monies from DHHR for the period from
November 1, 2001, until his discharge from Stepping Stone on April 17, 2002.
(See footnote 6)
On November 1, 1998, DHHR and Stepping Stone entered into a Child Care Agreement [hereinafter referred to as Agreement I]. Pertinent to the instant controversy, this contract provided that the Office of Social Services shall pay the treatment rate established by the Office of Audits, Research, and Analysis for those youth for whom treatment was provided but which cannot be billed to Medicaid because [the] child was not eligible for the service under Medicaid regulations. Agreement I, at Article XV. Agreement I remained in force and effect through December 31, 2001. In light of the above-quoted language, DHHR concedes that it is obligated to pay the Medicaid monies to Stepping Stone for the contract period Joseph was housed at Stepping Stone but was not eligible for Medicaid services, i.e., November 1, 2001, through December 31, 2001, which sum is approximately $2,328.98. (See footnote 7)
Thereafter, DHHR and Stepping Stone entered into a Group Residential Provider Agreement [hereinafter referred to as Agreement II], which replaced Agreement I, and remained in force and effect from January 1, 2002, through December 31, 2002. Unlike the parties' prior Agreement I, Agreement II does not contain any language to indicate who is responsible for the payment of Medicaid monies if a Stepping Stone resident is deemed to be ineligible for such services. Therefore, the parties disagree as to who is liable for such Medicaid payments for Joseph's residence at Stepping Stone from January 1, 2002, until his discharge on April 17, 2002. At the per diem Medicaid rate of $38.18, the total amount in controversy is approximately $4,085.26. (See footnote 8)
By order entered April 29, 2002, the Circuit Court of Harrison County
determined DHHR to be liable to Stepping Stone for the theretofore unreimbursed Medicaid
monies for Joseph's residence at that facility:
The Court . . . finds that based upon the intent of the parties, as evidenced by other contractual terms, Stepping Stone was no longer obligated to keep Joseph at its facility, absent a court order, once Joseph failed to meet the target population admission criteria and the ASO determined that treatment provided by Stepping Stone was no longer medically necessary.
The Court further finds that although Joseph no longer met the target population admission criteria and treatment provided by Stepping Stone was no longer medically necessary, the Department, Stepping Stone and the MDT agreed that Joseph's best interests would be served by his continued placement at Stepping Stone rather than an alternative placement.
The Court further finds that Stepping Stone had the right to condition Joseph's continued placement at its facility upon payment by the Department because, under the Current Agreement [Agreement II], Stepping Stone was not required to keep Joseph at its facility once he failed to meet the target population admission criteria and treatment was deemed no longer medically necessary.
From this ruling of the circuit court, DHHR appeals to this Court.
In support of its assignment of error, DHHR contends that the language of Agreement II is plain and easily resolves the instant controversy. Unlike Agreement I, Agreement II is silent as to who is responsible for the payment of Medicaid monies once a resident child is no longer eligible for said Medicaid services. Because Agreement II further states that it contains all the terms and provisions relating to the subject matter hereof and there are no other understandings, oral or otherwise, Agreement II, at Article XIV, § 4, DHHR asserts that the circuit court should have applied, rather than construed, the parties' contract. Citing Syl. pt. 1, Cotiga Dev. Co. v. United Fuel Gas Co., 147 W. Va. 484, 128 S.E.2d 626 (1962) (A valid written instrument which expresses the intent of the parties in plain and unambiguous language is not subject to judicial construction or interpretation but will be applied and enforced according to such intent.).
Stepping Stone responds by stating that the circuit court correctly determined
DHHR to be responsible for the Medicaid monies at issue herein. Under the terms of
Agreement II, the prior provisions of Agreement I were revised in order to prevent a
situation such as the one at issue here by permitting Stepping Stone to accept only those
youth who are medically eligible for the Medicaid services it provides. Because Agreement
II does not resolve the situation at hand, where a resident is deemed to be medically
ineligible for Medicaid services but nevertheless continues to be housed at Stepping Stone,
Stepping Stone urges the Court to look outside the parameters of the contract in order to
resolve this dispute. Citing Syl. pt. 2, in part, Berkeley County Pub. Serv. Dist. v. Vitro
Corp. of America, 152 W. Va. 252, 162 S.E.2d 189 (1968) (Extrinsic evidence may be
used to aid in the construction of a contract if the matter in controversy is not clearly
expressed in the contract, and in such case the intention of the parties is always
important[.]). In this regard, Stepping Stone contends that this Court should be instructed
by the terms of Agreement I in resolving this dispute as Joseph was admitted to Stepping
Stone under those terms.
The sole issue presented by the instant appeal requires us to determine
whether the parties' contractual agreement required DHHR to pay Stepping Stone the
monies to which it claims to be entitled. Ordinarily, [a] valid written instrument which
expresses the intent of the parties in plain and unambiguous language is not subject to
judicial construction or interpretation but will be applied and enforced according to such
intent. Syl. pt. 1, Cotiga Dev. Co. v. United Fuel Gas Co., 147 W. Va. 484, 128 S.E.2d 626
(1962). However, [t]he mere fact that parties do not agree to the construction of a contract
does not render it ambiguous. The question as to whether a contract is ambiguous is a
question of law to be determined by the court. Syl. pt. 1, Berkeley County Pub. Serv. Dist.
v. Vitro Corp. of America, 152 W. Va. 252, 162 S.E.2d 189 (1968).
In making such a determination of contractual ambiguity, we consider
whether the subject contract is capable of more than one interpretation. Thus, [c]ontract
language is considered ambiguous where an agreement's terms are inconsistent on their
face or where the phraseology can support reasonable differences of opinion as to the
meaning of words employed and obligations undertaken. Syl. pt. 6, State ex rel. Frazier
& Oxley, L.C. v. Cummings, 212 W. Va. 275, 569 S.E.2d 796 (2002). Once we have
determined a contract to be ambiguous, we look to the parties' relationship to glean the
parties' intent in entering into the agreement under scrutiny. Evidence of usage or custom
may be considered in the construction of language of a written instrument which is
uncertain or ambiguous but may not be considered to alter the legal effect of or to engraft
stipulations upon language which is clear and unambiguous. Syl. pt. 5, Cotiga, 147 W. Va.
484, 128 S.E.2d 626.
Having reviewed the contract in question, we find it to be ambiguous insofar
as it does not clearly indicate which party is responsible for payment of the Medicaid funds
to which Stepping Stone would have been entitled had Joseph been eligible for such
services from January 1, 2002, until April 17, 2002. Given the parties' prior dealings under
Agreement I, DHHR clearly would have been required to reimburse Stepping Stone.
(See footnote 9)
execution of Agreement II, however, the parties attempted to prevent the present scenario
by specifically providing that [y]outh admitted to group residential program(s) shall meet
the targeted population admission criteria for the level of treatment offered by Provider as
established by the Bureau for Medical Services. Agreement II, at Article I, § 3.06. Thus,
Agreement II does not contemplate a situation such as the one presented herein because
every child housed at Stepping Stone would first have to have been certified as medically
eligible to receive the facility's services.
Despite this strategic wording, the fact nevertheless remains that a non-
medically eligible child, namely Joseph, was, in fact, housed at Stepping Stone while
Agreement II was in force and effect. That said, some party is responsible either for paying
for the Medicaid services Joseph received while in residence at Stepping Stone or for
absorbing such costs. We find, based upon the parties' prior agreement addressing similar
situations, that DHHR is the party responsible for such costs. To find otherwise would, in
short, be unjust and inequitable, particularly when, under the parties' second agreement,
Stepping Stone was prohibited from discharging Joseph because no other placement plan
had been devised, much less implemented, for him. See Agreement II, at Article I, § 5.01
(Provider shall not discharge a youth meeting targeted population criteria without an
appropriate plan and living arrangement agreed upon by the child's MDT except in the
event of court ordered discharges and as allowed in Section XIII.3.03(1-4).). Accordingly,
we affirm the circuit court's ruling imposing such liability upon the West Virginia
Department of Health and Human Resources.