Case Law News
Recent Cases:
Slip and Fall
Smalley v Bemben, 2009 NY Slip Op 01323#http://2009 NY Slip Op 01323# (NY Ct. App. February 24, 2009)(Memo)
Only a municipality is liable for negligent failure to remove snow and ice from a public sidewalk, unless a statute or ordinance "clearly imposes liability upon" an abutting landowner. The City of Buffalo imposed a duty to remove snow and ice on abutting sidewalks, but did not impose liability for failure to do so. They did impose liability for making, maintaining and repairing abutting sidewalks.
Comment:
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Personal Injury
Fasso v Doerr, 2009 NY Slip Op 01320#..\nynylaw\RecentCaselaw\Fasso.doc# 1,15,36,0,,2009 NY Slip Op 01320 (NY Ct. App. February 24, 2009)(Graffeo, J.)
This case establishes important law which must be considered in drafting a Release in virtually every personal injury case where a medical lien exists.
The injured party in Fasso sued her doctor for medical malpractice. She had medical expenses of $780,000 that were paid by her health insurance carrier. The carrier moved to intervene in the medical malpractice action to assert an equitable subrogation claim against the doctor for reimbursement of their payments. The plaintiff argued that since there was only 2 million in coverage for the doctor, there would be nothing left to satisfy the subrogation claim. At trial, the insurer said it would rely upon the plaintiff 's proof. The plaintiff reached a settlement of $900,000, and the plaintiff and defendant agreed to dismiss the subrogation claim, without the insurer's participation in the negotiations or consent. The insurer moved for a mistrial to obtain their own witnesses for the trial. The court denied the mistrial, approved the settlement, and dismissed the subrogation complaint, holding it did not survive settlement of the case. The Appellate Division affirmed.
The Court of Appeals reversed. The doctrine of equitable subrogation holds that an insurer who pays money to an insurer can recover that money from the wrongdoer who caused the injury. As a corollary, if the injured party receives money from the wrongdoer that duplicates what was paid by the insurer, the insurer may recoup that money from its insurer. A limitation on the rule is the "made whole" rule, which holds that if the funds for compensation are limited, the injured party's claim gets paid first, taking precedence over the subrogation rights of the insurer. "If the recovery the injured party receives, whether determined by settlement or verdict, is greater than the wrongdoers assets and available insurance coverage, there is nothing left for the insurer to execute its subrogation rights against and the made whole rule prevents the insurer from sharing in the insured's judgment or recovery."
In Fasso, there was 1.1 million in remaining insurance coverage after the settlement. It was therefore error to dismiss the subrogation claim. The right to subrogation cannot be altered by the insured. The wrongdoer and the insurer cannot agree to terminate the insurers claim without its consent. The Court of Appeals therefore remanded the matter back to the trial court for a trial on the subrogation claim.
Comment:
The Court of Appeals accepts a settlement which apportions the money to pain and suffering, not medical expenses. Whether stating in the Release "this settlement is for pain and suffering, only", eliminates the health insurer's right to reimbursement from the settlement fund is an important question. It is important to consider this issue carefully and explicitly in the written Release in every case. If the Release states it covers only pain and suffering, the subrogation claim still exists. The health insurer could then commence a subrogation lawsuit against the wrongdoer. The question then becomes whether the statute of limitations was tolled as of the date the original action was filed. That action put the defendant on notice of the existence of an equitable subrogation claim. Can that principle even apply when the subrogation action is being brought separately from the related original action? These are issues left open by the Court of Appeals in Fasso.
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