Lawsuit: USD 259 sought repayment for custodian’s treatment from his crash settlement
A Wichita public schools employee is suing the district and its self-insured medical plan for breach of contract after he says he was forced to pay back the cost of some covered medical expenses when he received a settlement from the person who injured him.
Attorneys for Timothy Towne, a custodian who has worked for the district since 2016, say there may be “several hundred individuals” who over the past five years repaid their Unified School District 259 medical plans out of settlements they received from the people who harmed them. They are asking a judge to grant Towne’s case class action status.
The lawsuit, filed Thursday afternoon in Sedgwick County District Court, alleges the school district and its WPS “Base Plan” wrongfully pursued subrogation — in other words, it requested repayment out of their insured’s settlements with third parties — in violation of a state law that bars the practice.
The school district, through its spokeswoman Susan Arensman, said Friday it has “no comment on a suit that has yet to be served.” The lawsuit says the school district has sponsored and administered the medical plan in question “for the benefit of employees and their immediate family members” for at least five years.
Wichita attorney Troy Gott, one of Towne’s lawyers, said a 1994 Kansas Court of Appeals case once allowed municipalities to “subrogate in this circumstance.”
But he says a subsequent amendment the Legislature made to state law changed that.
“We believe that it changed the law and prohibits them from now trying to subrogate,” Gott said.
Despite the changes, the school district “continued to demand insureds repay what the plan had paid for their medical treatment,” he said, adding:
“They’re being forced to pay something back and lose a portion of their settlement they otherwise were lawfully entitled to.”
For Towne, that meant repaying a portion of the money the medical plan spent after he was injured in an automobile crash in August 2018. The lawsuit says Towne has been enrolled in the district’s Base Plan since he was hired.
After Towne was hurt, the plan paid benefits for his treatment. That amount is not included in court filings.
Towne later sued the party responsible for his injuries and received a financial settlement earlier this year.
The lawsuit says the district and its self-insured plan, through “their designated agents including the Rawlings Group, threatened to pursue legal action against Towne if he did not reimburse” them for the benefits they paid in relation to the 2018 crash.
The repeated requests and fear of possible consequences of nonpayment eventually led Towne to reimburse the district $1,705.20, the lawsuit says.
Towne is seeking more than $75,000 and class-action status in the case. Without class-action status, the lawsuit argues the school district “would be unjustly enriched because it would be able to retain the benefits and fruits of their wrongful conduct.”
Towne’s attorneys estimate more than two-thirds of those who might be eligible to join a class-action suit are Kansas residents. But the exact number of people is unclear.
The district has employed at least 5,000 people in the past five years who were eligible to participate in the district’s medical plans, the lawsuit says.
With 94 schools and special program locations, U.S.D. 259 is the largest public school district in the state, employing around 10,000 teachers and staff members, according to www.usd259.org. The district serves roughly 50,000 students.
