Incorrect Military ID Cards Issued causing Insurance Problems

Full question:

My son retired from the Naval Reserve. Upon retirement the issuing authority for military identification cards issued my son and his wife the incorrect ID cards even though my son informed them they were issuing them the incorrect ID cards. The issuing authority assured them that they were the correct cards. The ID cards issued them in March 2006 authorized them medical coverage under the Department of Defense TRICARE Program. The Department of the Navy realizing that the incorrect cards and in fact they were not authorized TRICARE services and that TRICARE would be notifying them that TRICARE will recoup the funds that they paid to their providers of medical care. TRICARE in fact notified them that they were in the process of recouping the funds from their providers. The problem is that the providers are demanding payment from them at the 100% charged for the service because they are being billed as having no insurance and not the contract price TRICARE reimbursed the providers. This 100% charge has caused my son to be obligated to pay, based on the statements received as of the date, to be at least $50,000.00. Can my son use the Detrimental Reliance reason when he appeals his case to the TRICARE Management Activity, the agency who will make the final decision. Additionally, if the appeal is made in my sons favor and TRICARE reimburses the providers at the contract rate can the providers then demand payment of the difference from my son? Further, if they do bill my son for the remainder, can my son then make the Navy pay the difference. The big problem is that my daughter-in-law was laid off from her job in November 2007 and has not been able to find work in her field which was an estimator for a home building company and in no way can they afford to pay the money back based on the salary of my son. This will and undo hardship on them and cause the providers to report the situation to the credit report agencies which will affect his credit rating causing another hardship on them.

• Category: Military
• Date: 04/07/2025
• State: National

Answer:

Contracts are agreements that are legally enforceable. A contract is an agreement between two parties that creates an obligation to do or refrain from doing a particular thing. The purpose of a contract is to establish the terms of the agreement by which the parties have fixed their rights and duties. An unjustifiable failure to perform all or some part of a contractual duty is a breach of contract. A legal action for breach of contract arises when at least one party's
performance does not live up to the terms of the contract and causes the other party to suffer economic damage or other types of measurable injury. Contracts are mainly governed by state statutory and common (judge-made) law and private law. Private law generally refers to the
terms of the agreement between the parties, as parties have freedom to override many state law requirements regarding formalities of contracts. Each state has developed its own common law of contracts, which consists of a body of jurisprudence developed over time by trial and appellate courts on a case-by-case basis.

A lawsuit for breach of contract is a civil action and the remedies awarded are designed to place the injured party in the position they would be in if not for the breach. Remedies for contractual breaches are not designed to punish the breaching party. The five basic remedies for
breach of contract include the following: money damages, restitution, rescission, reformation, and specific performance. A money damage award includes a sum of money that is given as compensation for financial losses caused by a breach of contract. Parties injured by a breach are
entitled to the benefit of the bargain they entered, or the net gain that would have accrued but for the breach. The type of breach governs the extent of damages that may be recovered. Restitution is a remedy designed to restore the injured party to the position occupied prior to
the formation of the contract. Parties seeking restitution may not request to be compensated for lost profits or other earnings caused by a breach. Instead, restitution aims at returning to the plaintiff any money or property given to the defendant under the contract. Plaintiffs
typically seek restitution when contracts they have entered are voided by courts due to a defendant's incompetence or incapacity. Rescission is the name for the remedy that terminates the contractual duties of both parties, while reformation is the name for the remedy that allows courts to change the substance of a contract to correct inequities that were suffered. In order to have a rescission, both parties to the contract must be placed in the position they occupied before the contract was made. Courts have held that a party may rescind a contract for fraud,
incapacity, duress, undue influence, material breach in performance of a promise, or mistake, among other grounds. Specific performance is an equitable remedy that compels one party to perform, as nearly as practicable, his or her duties specified by the contract. Specific performance is available only when money damages are inadequate to compensate the plaintiff for the breach.

Promissory estoppel is a term used in contract law that applies where, although there may not otherwise be a enforceable contract, because one party has relied on the promise of the other, it would be unfair not to enforce the agreement. Promissory estoppel arises from a promise which the promisor should reasonably expect to induce action or forebearance
of a definite and substantial character on the part of the promisee and which does induce such action or forebearance in binding if injustice can be avoided only by enforcement of the promise.

Detrimental reliance is a term commonly used to force another to perform their obligations under a contract, using the theory of promissory estoppel. Promissory estoppel may apply when a promise was made; reliance on the promise was reasonable or foreseeable; there was actual and reasonable reliance on the promise; the reliance was detrimental; and injustice can only be prevented by enforcing the promise. Detrimental reliance must be shown to involve reliance that is reasonable, which is a determination made on an individual case-by-case
basis, taking all factors into consideration. Detrimental means that some type of harm is suffered.

Reasonable reliance is usually referred to as a theory of recovery in contract law. It was what a prudent person might believe and act upon based on something told by another. Sometimes a person acts in reliance on the promise of a profit or other benefit, only to learn that the statements or promises were either incorrect or were exaggerated. The one who acted to their detriment in reasonable reliance may recover damages for the costs of his/her actions or demand performance. Reasonable reliance connotes the use of the standard of ordinary and average person.