Author Archive for August Ober

Subrogation Claim Under Ohio’s Worker’s Compensation Act Has Six Year Statute of Limitations

The Ohio Supreme Court has recently ruled that a statutory subrogee’s claim under the Ohio’s Worker’s Compensation Act was not derivative of the claimant’s tort claim and therefore, not barred by the two year statute of limitations. See Ohio Bureau of Workers’ Compensation v. McKinley, et al. (2011) 130 Ohio St. 3d 156.

In this case, the injured employee or “claimant” (as defined by O.R.C. § 4123.93(A)), made a recovery from a “third party” (as defined by O.R.C. § 4123.93(C)) and sought to avoid having to reimburse the Bureau of Workers’ Compensation or the “statutory subrogee” (as defined by O.R.C. § 4123.93(B)) out of his personal injury settlement. The BWC brought a lawsuit against the claimant more than two years after the action accrued. The claimant raised a statute of limitations defense. The Court reasoned that the Ohio Worker’s Compensation Act creates a separate right of recovery for a statutory subrogee thus that the BWC’s claim was not derivative of the claimant’s claim. As such, O.R.C. § 2305.07 which allows a six-year statute of limitations for an action on a “liability created by statute” applied.

While it is still true that the early bird gets the worm and I wouldn’t recommend waiting until the statute is about to run on any claim to take action, it is reassuring for statutory subrogee’s to know that they won’t be barred after two years. The six-year limitation applies whether the statutory subrogee is the BWC or a self-insured entity for the purposes of workers’ compensation.

BY:

TED TRAUT, ESQ.

Louisiana Senate Bill 169, Section 1881

Published by August Ober on July 12, 2011 in Uncategorized | 0 Comments

The Louisiana Bill was recently signed by Governor Bobby Jindal and enacted into law. The original bill has been modified, but still lacks clarity.

The law states that no health insurer shall seek reimbursement from an automobile medical payment coverage without first obtaining the written consent of the insured or his/her legal representative. Once nine (9) months have elapsed from the date of the accident, a health insurer may seek reimbursement from the med pay carrier for the outstanding balance remaining on the med pay policy. The bill is unclear as to whether or not the “consent requirement” is necessary after the nine month statutory period has elapsed.

Additionally, a health insurer seeking payment from an automobile med pay policy cannot recover more than the amount actually paid by the insurer or provider. The law does not apply to Medicare Advantage or self-funded plans. The law becomes effective on August 15, 2011.

-As reported by NASP -

UPDATE – Recent Bills Affecting Subrogation!

Published by August Ober on July 6, 2011 in Auto, PIP/MedPay, Property and UM/UIM | 0 Comments

H.R 2205

The United States House of Representatives introduced a bill on June 16, 2011 aimed at tort reform. The stated intent of the bill is to improve the medical justice system and the short title is “Ending Defensive Medicine and Encouraging Innovative Reforms Act of 2011.” This bill has the potential to bar subrogation rights for workers compensation, health and casualty carriers.

House of Representative Bill 2205 (H.R. 2205) attempts to encourage states to create alternative medical liability laws and mandates specifics to be included in any such law enacted by a state. Incentive payments would be available to states that had successfully enacted and implemented such an alternative medical liability law. To ensure the incentive payments produce the desired results, the Secretary of Health and Human Services would require states to submit reports. The Secretary would then compile the data and annually measure whether there was (1) a reduction in the number of health care lawsuits initiated in a state; (2) a reduction in the amount of time required to resolve lawsuits in the state; and (3) a reduction in the cost of malpractice insurance in the state. If the alternative medical liability law produced the intended results, then the state would be eligible for an incentive payment. However, if the secretary determined that the state law had not produced the intended results, any subsequent health care lawsuits would be subject to further scrutiny and the bill lists a number of provisions for which a state must comply. For example, one such provision is a cap of $250,000 for noneconomic damages. A further provision provides a complete bar to pursue any subrogation rights or enforce any lien or credit against a claimant’s recovery. Although, Medicare is excepted from this bar to pursue subrogation rights or a lien, it would apply to any case that is settled or decided by a trier of fact.

This federal bill takes a unique approach to addressing medical malpractice reform. Although, the importance of subrogation recoveries is recognized as to the federal government and specifically preserved in the bill, the same consideration is not provided for other entities or businesses. If the bill is passed, only those states that struggle to produce the intended results would trigger the bar to subrogation.

Pennsylvania Senate Bill 1131

On June 28, 2011 Governor Tom Corbett signed into law the Fair Share Act, allowing for a change generally to “several” liability in comparative negligence actions. The new law applies to causes of action that accrue on or after its enactment. Pennsylvania joins a growing number of states that have sought and passed reforms to their joint and several liability laws. Now, when a Pennsylvania defendant’s negligence is determined to be less than 60% responsible, they will pay damages in accordance with the degree of fault assessed against them. However, there are a few exceptions, where a defendant’s liability remains joint and several, which are:

(i) intentional misrepresentation;
(ii) intentional tort;
(iii) a release or threatened release of a hazardous substance under the Hazardous Sites Cleanup Act; and
(iv) a civil action in which a defendant has violated section 497 of the Liquor Code.

Alabama Senate Bill 269

The Governor of Alabama recently signed Senate Bill 269, which excludes someone who handles only subrogation claims from the licensing and regulation requirements of an independent adjuster.

AS REPORTED BY THE NATIONAL ASSOCIATION OF SUBROGATION PROFESSIONALS

NASP – Litigation Skills Conference

Published by August Ober on March 24, 2011 in Auto, PIP/MedPay, Property and UM/UIM | 0 Comments

Mike Dougherty and A.J. Ober are in San Diego, CA this week attending the National Association of Subrogation Professionals - Litigation Skills Conference.

We have met many great attorneys and insurance professionals, while attending courses to improve our litigaton techniques and better represent our clients.

Excess Insurance Clauses – OHIO

Published by August Ober on March 11, 2011 in Auto | 0 Comments

WHEN CLAUSES CONFLICT

By: Jason A. Mosbaugh, Esq. - Cincinnati Office

Often, one of the largest obstacles to the recovery of a client’s subrogation claim is a lack of liability insurance by the tortfeasors. On the opposite side of the spectrum however if the tortfeasor is covered by multiple policies of insurance other issues can arise. Take for instance the case where an individual covered by his own automobile liability insurance policy is driving a vehicle owned by another also covered by an automobile liability insurance policy. If that driver and that vehicle get in a wreck causing injury to a third party, the question becomes which policy is responsible for paying the damages. Nearly any automobile liability insurance policy will contain what is commonly referred to as an “excess insurance clause.” The excess insurance clause states that the policy invoking the clause shall only be excess as to any other available insurance. In layman’s terms, the policy proclaims we will pay but only after any other insurers pay first.

The ubiquity of these clauses however often result in both policies attempting to subjugate themselves to second place while putting the other on the hook first. This is certainly not a new problem and the issue was once thought to be fully resolved by the Ohio Supreme Court in the decision entitled Buckeye Union Insurance Company v. State Automobile Mutual Insurance Company (1977) 49 Oh. St. 2d 213. The Ohio Supreme Court in that decision essentially held that the competing clauses effectively neutralized each other and the dueling insurers were left to share and share alike as to the apportionment of liability.

Following the Buckeye Union case however, certain insurers attempted to modify the language of their excess insurance clauses to avoid the effect in Buckeye Union. These insurers essentially attempted to strengthen the language of their excess insurance clauses to avoid the application of the Buckeye Union case. Until fairly recently, these issues had not yet been fully flushed out by higher courts however in the last year a number of appellate decisions appeared to have a final resolution of this issue. The Sixth Appellate District in the case of The Cincinnati Insurance Company v. The Motorists Mutual Insurance Company, 2010-Oh.-5176 (Oct. 22, 2010); Motorists Mutual Insurance Company v. Progressive Specialty Insurance, 2010-CV-01629 (Nov. 24, 2010) and Progressive Insurance Company v. Motorists Insurance Company CV-10-717046 (Aug. 20, 2010) have all in essence ruled that the Ohio Supreme Court’s precedent in Buckeye Union remains controlling regardless of alternations to the language of the excess insurance clauses by the various insurers. The rationale here is fairly obvious. The Court found that if the intent of each respective insurer is to subjugate itself to the other, the clauses essentially cancel each other out having no effect. In equity then, the remedy is a pro rata division of damages. The Court’s in these various decisions all pointed to the fact that if the above rationale was not extended insurers would effectively begin an arms race against one another for the next best policy language which would afford them opportunity to relegate themselves to second position. In other words, substance over form should prevail.

It should be noted that to this point the case law has exclusively depended on the interpretation of excess insurance clauses and automobile liability insurance policies. The effect on other policies including general commercial liability insurance policies and excess or umbrella insurance policies were not addressed by the Courts in the cases at hand.

In summary, in an automobile subrogation case where the tortfeasor is potentially insured by two automobile liability insurance policies, the Plaintiff should look to both insurers for contribution to be made whole. If either of the two insurers elects to front the total amount of the Plaintiff’s damages then that insurer has a strong argument that it is subrogated to the extent of its pro-rata share of liability against the non-paying insurer.