We have previously construed the term "incurred" in a nearly identical medical payments provision of an automobile insurance policy as unambiguous and concluded that "[a]n expense can only be `incurred' . . . when one has paid it or become legally obligated to pay it." Virginia Farm Bureau Mut. Ins. Co. v. Hodges, 238 Va. 692, 696, 385 S.E.2d 612, 614 (1989). The language at issue in Hodges was "all reasonable expenses incurred within one year from the date of accident for necessary medical . . . services."

. In Virginia Farm Bureau Mut. Ins. Co. v. Hodges , 238 Va. 692, 385 S.E.2d 612 (1989), the plaintiff, who injured her arm in an automobile accident, sued her insurer. On appeal, we considered whether the plaintiff incurred certain medical expenses within a year under a former version of Code § 38.2-2201.

The policy defined medical expense as "all reasonable and necessary expenses for medical . . . services . . . incurred. . . ." Id. Accordingly, to answer the coverage question, we focused on the meaning of the term "incurred," as defined by this Court in Virginia Farm Bureau Mut. Ins. Co. v. Hodges, 238 Va. 692, 385 S.E.2d 612 (1989). In Hodges, we said that "[a]n expense can only be `incurred' . . . when one has paid it or become legally obligated to pay it."

"An expense can only be incurred, however, when one has paid it or become legally obligated to pay it." Virginia Farm Bureau Mut. Ins. Co. v. Hodges, 238 Va. 692, 385 S.E.2d 612, 614 (1989). For the collateral source rule to be in effect under Virginia law, the injured party must be responsible for making payment, even if a collateral source actually pays.

The Court of Appeals observed that "[t]o 'incur' means '[t]o suffer or bring on oneself (a liability or expense),'" id. (quoting Black's Law Dictionary 885 (10th ed. 2014)), and that this Court has held that a medical expense "can only be 'incurred' when one has paid it or become legally obligated to pay it," id. (quoting Virginia Farm Bureau Mut. Ins. v. Hodges, 238 Va. 692, 696 (1989); State Farm Mut. Auto. Ins. v. Bowers, 255 Va. 581, 585 (1998)). The Court of Appeals found this definition of "incurred" to be inapplicable because it arose in cases involving automobile insurance, and "[t]his, of course, is not an auto insurance case." Id.

(Mot. in Limine 7-9.) Citing McAmis v. Wallace, Defendant urges that Virginia law only permits a Plaintiff to recover expenses actually incurred, and thus precludes damages for written-off expenses. (Mot. in Limine 7-9 (citing 980 F. Supp. 181, 184 (W.D. Va. 1997) (quoting Va. Farm Bureau Mut. Ins. Co. v. Hodges, 385 S.E.2d 612, 614 (Va. 1989))).) Defendant further argues that the statute of limitations to collect debts on these write-offs has passed in the jurisdictions where Plaintiff received medical care, making it impossible for Plaintiff to be held liable for the debt at a later date. (Mot. in Limine 7-9 (citing D.C. Code § 12-301(7); Md. Code Ann., Cts. & Jud. Proc. § 5-101).

See Terminix Int'l Co. Ltd. P'ship v. Tenn. Ins. Guar. Assoc., 845 S.W.2d 772, 776-77 (Tenn.Ct.App. 1992); Hermitage Health Life Ins. Co. v. Cagle, 420 S.W.2d 591, 593 (Tenn.Ct.App. 1967); see also Stuyvesant Ins. Co. v. Nardelli, 286 F.2d 600, 603 (5th Cir. 1961); United States v. St. Paul Mercury Indem. Co., 238 F.2d 594, 598 (8th Cir. 1956); ex parte General Jackson Apartments, 686 So. 2d 1112, 1114 (Ala. 1996); Niles v. Am. Bankers Ins. Co., 229 So. 2d 435, 438 (La.Ct.App. 1969); Atkins v. The Great Am. Ins. Co., 189 S.E.2d 501, 504 (N.C.Ct.App. 1972); Reserve Life Ins. Co. v. Coke, 183 So. 2d 490, 493 (Miss. 1966) ; Va. Farm Bureau Mut. Ins. Co. v. Hodges, 385 S.E.2d 612, 614 (Va. 1989). Though plaintiffs agree that the definition of incur means to become liable, they argue that they incurred the expenses at the time they tentatively scheduled Ms. Ernest's surgery because they were required to pay for the surgery before it took place.

An insurance policy is a contract; therefore, we give the words used in this policy their ordinary and usual meaning when they are susceptible of such construction. Graphic Arts Mut. Ins. Co. v. C.W. Warthen Co., 240 Va. 457, 459, 397 S.E.2d 876, 877 (1990). If the policy language is unambiguous, we do not resort to rules of construction. Virginia FarmBureau Mut. Ins. Co. v. Hodges, 238 Va. 692, 696, 385 S.E.2d 612, 614 (1989). We simply apply the terms of the policy as written. United Services Auto. Ass'n v. Webb, 235 Va. 655, 657, 369 S.E.2d 196, 198 (1988).

Indeed, the Supreme Court has held that an expense is incurred when one is legally obligated to pay it. SeeVirginia Farm Bureau Mut. Ins. Co. v. Hodges , 238 Va. 692, 696, 385 S.E.2d 612 (1989) ("An expense can only be ‘incurred’ when one has paid it or become legally obligated to pay it."). Moreover, by requiring PRJA to pay an expense as a condition-precedent to Sheriff Jenkins’ liability, Sheriff Jenkins’ contract construction implausibly implies that PRJA has agreed—on pain of forfeiture—to make advance payments of Sheriff Jenkins’ liabilities.

Bureau Mut. Ins. Co. v. Hodges, 238 Va. 692, 696 (1989); State Farm Mut. Ins. Co. v. Bowers, 255 Va. 581, 585 (1998); see also Code § 38.2-2201(A)(3).