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 -
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.
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.
On January 27, 2011, changes to the PA Comparative Negligence law (42 Pa.C.S. § 7102) were proposed to the PA General Assembly under House Bill No. 1.
As the law currently stands, when liability is apportioned among multiple Defendants, all Defendants are deemed jointly and severally liable, regardless of their percentage of apportioned fault. This has long been referred to in Pennsylvania as the 1% rule.
For example, suppose a motor vehicle accident occurs and a Jury determines that Plaintiff is awarded $10,000.00. The Jury determines that liability is apportioned as follows: 70% to Defendant A; 29% to Defendant B; and 1% to Defendant C. Now further suppose that Defendant A and Defendant B are individuals that are not insured, but Defendant C is a large corporation with insurance. As the law currently stands, Plaintiff may rightfully seek the full $10,000.00 verdict from Defendant C only. This often occurs when one Defendant has “deeper pockets”, when compared to their Co-Defendants.
The opposite of PA’s current law is a pure several liability theory. Under several (rather than joint and several),Plaintiff could only recover 1% of the $10,000.00 verdict from Defendant C.House Bill No. 1 proposes somewhere in between. Here, if Defendant A is found 60% liable or more, they can be on the hook for the full verdict. But, any Defendant that is found less than 60% liable, only owes Plaintiff according to their apportioned percentage of liability.
It is important to note that House Bill No. 1 has yet to be approved, and will not likely be voted on for a few more months. Until then, the 1% rule is still in effect.
A.J. Ober, Esq.