Subrogation Law in Florida

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Sometimes this leaves people wondering how is this possible, and rightfully so! The insurance company is exercising its right to subrogation, which means the insurance company is substituting itself for the actual party involved in the auto accident and collecting the money for the damage done to that individual’s property (for which they have already paid pursuant to their insurance contract with that person).

What is Subrogation?

Subrogation is an equitable doctrine in Florida and throughout the country.  The purpose of subrogation is to provide relief against loss and damage to a creditor who has paid the debt of another and preventing people needlessly paying for other people’s mistakes.  What does that mean?  It means if someone else pays your bill and you are compensated by the wrongdoer for that bill, the person who paid that bill for you — usually an insurance company  — has to be paid back.

The most common example we see is health insurance.  When you get in a car accident, your health insurer often pays your bills.  The at-fault driver’s insurance company also pays your bills. Florida law typically requires you to compensate the insurance company for the money that they spent.  Luckily, we at Stephen Barker Law are often able to negotiate substantial reductions in that amount.

Let’s get into how this is fair.   The insurance companies are stealing money from accident victims who have more of a right to that money than the insurance companies.  Why does it matter that there was an accident involved?  That is what you are paying premiums for in the first place, right?  Unfortunately, Florida law does not see it that way.  The law sees it from a freedom of contract perspective.  These insurance companies all have contractual language obligating you to pay back the money they pay you if you collect that money from another source.

What Is the Solution to This Problem?

Our lawyers deal with this issue all of the time.  We have developed a lot of tactics to reduce and even eliminate health insurance liens.  What if your case is too small for a lawyer?  You should contact the insurance company’s lawyer and try to negotiate a settlement on your own without a lawyer.  The insurance company’s lawyer is sometimes authorized to accept pennies on the dollar to settle these cases in an effort to save the insurance company the time and effort of trying to collect a judgment it obtains.

If you want answers, please reach out to us at Stephen Barker Law and we can help you get your case in order today!

U.S. Supreme Court Decision Limits ERISA Plans’ Subrogation Rights

On January 20, 2016, the United States Supreme Court issued a significant decision that makes it more difficult for employee benefit plans governed by the Employee Retirement Income Security Act of 1974 (ERISA) to obtain reimbursements of payments made to plan participants who have subsequently received third-party settlements. The decision is Montanile v. Board of Trustees of the National Elevator Industry Health Benefit Plan, __ U.S.__, 136 S. Ct. 651, 84 USLW 4046 (Montanile). In Montanile, the issue presented to the Supreme Court for its review was whether an ERISA plan has authority under the statute to place a lien on a plan participant’s general assets once that person has obtained funds from the settlement of a legal action with a third party and then dissipated the settlement funds.

The Supreme Court held in an 8-1 decision that an ERISA plan fiduciary may not seek reimbursement out of the third-party settlement a plan participant has received in circumstances where the participant has spent the settlement funds. Writing the opinion for the majority (Justice Ruth Bader Ginsburg issued a dissenting opinion), Justice Clarence Thomas found that ERISA provision Section 502(a)(3), which authorizes a fiduciary to bring a suit for equitable relief to enforce the terms of the plan, precludes such a suit for reimbursement where the plan fiduciary is seeking to attach the participant’s separate assets that are not traceable to the settlement funds.

As will be discussed below, Montanile involved an employee health benefit plan. Justice Thomas did not address whether the court’s ruling applies more broadly to other types of ERISA plans, such as pension or disability plans, that may seek to recoup benefits that could have been paid to participants over many years or even decades. Given the length of time during which such pension or disability payments may have occurred, it is even more likely that the payment recipients will have spent the payments they had received.

Overview of Montanile Decision

This case arose from the medical expenses Robert Montanile incurred as a result of injuries he suffered when a drunk driver ran through a stop sign and crashed into his vehicle. Montanile was a participant in the National Elevator Industry Health Plan. The plan paid in excess of $120,000 for medical care Montanile required as a result of his injuries from the car accident. However, the plan’s provisions enable it to demand reimbursement when a participant recovers money from a third party for medical expenses. Indeed, Montanile did file a negligence claim against the drunk driver and obtained a $500,000 settlement. He netted $240,000 after paying attorney’s fees and repaying an advance from his attorneys.

The plan’s Board of Trustees sought reimbursement of the medical expenses the plan paid to Montanile, but his attorney argued that the plan was not entitled to any recovery. The parties entered into negotiations over reimbursement but never reached an agreement. Thereafter, Montanile’s attorney informed the board that he would distribute the remaining settlement funds unless the board objected within 14 days. After the board did not object within that timeframe, Montanile’s attorney paid him the remainder of the funds from the settlement.

Six months later, the plan filed suit against Montanile in the United States District Court for the Southern District of Florida under ERISA Section 502(a)(3) seeking reimbursement of the amount it expended on his medical care. The plan sought to enforce an equitable lien against any settlement funds, as well as any funds that were in Montanile’s actual or constructive possession. Montanile argued that he had spent almost all of the settlement funds and that there were no specific, identifiable funds separate from his general assets against which the equitable lien could be enforced. The district court rejected that argument and held that even if Montanile had dissipated some or all of the settlement funds, the board was entitled to reimbursement from Montanile’s general assets. The United States Court of Appeals for the Eleventh Circuit affirmed the district court’s decision. The court of appeals held that the equitable lien was enforceable, notwithstanding dissipation of the specific fund to which the lien attached. The court of appeals determined that a plan can recover out of a participant’s general assets when the participant dissipates the specifically identified fund.

Courts of appeals in only two circuits have adopted the position that ERISA plans cannot seek reimbursement of general assets under Section 502(a)(3) from participants unless they can trace their claims to specific funds in the participant’s possession. The Eleventh Circuit’s decision followed the majority position taken by courts of appeals in other circuits permitting an ERISA plan to enforce an equitable lien against a defendant’s general assets without having to satisfy a tracing requirement.

The Supreme Court’s decision in Montanile upholds the minority position. One point Justice Thomas made in his opinion was that a plan can only seek equitable relief under Section 502(a)(3), whereas ERISA contains other civil action provisions, such as Section 502(a)(1)(B), that more broadly allow plan participants and beneficiaries to enforce their rights under the plan that does not limit them to equitable relief. He further explained that equitable remedies enforce a right against a particular thing, rather than a right to recover money generally out of a defendant’s general assets. In addition, Justice Thomas found that an equitable lien could ordinarily be enforced against specifically identifiable funds that remain in the defendant’s possession or against traceable items that the defendant purchased with the funds, such as a car. However, he indicated that expenditure of the entire identifiable fund on non traceable items (like food or travel) destroys an equitable lien. Justice Thomas then concluded that the board could not enforce its equitable lien against Montanile’s general assets.

Conclusion

The decision in Montanile puts responsibility on health benefit plan fiduciaries to have in place processes to ensure that they seek reimbursement for medical expenses that they have paid to plan participants and beneficiaries promptly after those individuals have recovered those medical expenses from third parties in legal proceedings. It is especially important that these processes include a system for investigating and tracking expensive claims.

By commencing reimbursement actions promptly, the likelihood that third-party settlement funds will be wholly dissipated will be diminished. Nevertheless, as some settlements (especially settlement amounts) are reached in secrecy with nondisclosure agreements, it may be difficult for plans to gain sufficient information to trigger a prompt reimbursement effort. Furthermore, if lower courts interpret Montanile to apply to other types of ERISA plans, it may not be practicable for plans to quickly seek reimbursement before dissipation of pension or disability disbursements that were perhaps paid years earlier.

If you have a subrogation case and want the very best South Florida has to offer, look no further than Stephen Barker Law! We work with the best attorney’s to bring you the compensation you deserve. Reach out to us for a quote today and a more lucrative tomorrow!

 

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How To Choose The Best Subrogation Lawyer in South Florida

Subrogation is a legal procedure that lets an insurance company make a claim against a third party, to recover benefits that the insurer paid to its insured. The purpose of a subrogation claim is to force the person or company that was at fault for an accident to reimburse the insurance companies that paid insurance benefits as a result of that accident.

Why Do Injured Persons Need To Know About Subrogation Law? 

In every health insurance policy there is a subrogation clause. This is true whether you have a private insurance carrier, Medicare, or Medi-Cal.  Although there is a lot of fine print that is easy to look over in Insurance contracts, the subrogation clause is a part of your health insurance. When you are injured as a result of someone else’s negligence, and you will likely obtain medical treatment for injuries sustained, such as in an automobile accident. In Florida there is currently a requirement that all drivers carry personal injury protection insurance coverage or PIP, also known as no-fault. In theory your no-fault insurance is supposed to pay for your medical care following an automobile accident. This protection however is normally limited to $10,000.00 and will  only cover 80% of your medical bills. There is also a chance that your own insurance company may cut off your PIP benefits and stop paying your medical bills after you are examined by one of their doctors in what they call an independent medical exam or IME. No fault benefits are not subject to subrogation, and as such payments made to medical providers through PIP do not have to be reimbursed.

Why Do I Need A Subrogation Lawyer?

In life, there is no such thing as control. Life may go your way most of the time, but odds are that you will have to deal with being the victim of negligence at some point in your life. When it happens, you’ll need to consult a lawyer who deals with personal injury. You may be entitled to compensation for injuries caused by the negligence of others.  So the question is: “How do you find the best personal injury lawyer for you?”. That’s where we can come in and help guide you in finding the best Subrogation Lawyer for you in South Florida. We hope you choose to work with us at Stephen Barker Law, but it is always best to explore your options. Here are some guidelines for how to pick the lawyer that is right for you:

Time is of the Essence:
There is no time to waste after an accident. There are time limitations known as the statute of limitations, and they vary of different types of cases. If you are seriously injured after the accident then you’ll  need to rely on close friends or family members, or family physician to recommend a lawyer they know and trust. It will protect your rights if you retain a lawyer very soon after the accident, so that your lawyer may begin his or her own investigation, preserve evidence, and advise you on your rights.

Google is Your Friend:
Any lawyer that is worth your time has a website and to provide you more  information about the lawyer and their practice.  Ideally you can learn about the education and experience of a lawyer from their website.  One of the cons of using a lawyer’s website as an informational resource about their own services is that it was likely written by the lawyers themselves and any opinions may be biased in favor of selecting their firm. A good way to verify other people’s experiences is to check a ratings website like martindale hubbel, lawyers.com, Avvo, Superlawyers, or the Better Business Bureau so you can get a realistic view as the client of what to expect from your attorney.

What Type of Injury Do You Have:
Just like there are many different types of injuries, there are lawyers with different expertises of injury. It is wise to select a lawyer who devotes their practice to the type of injury you have sustained so that you can be assured that they have experience in similar cases. There are many types of accidents such as car accidents, slip and falls, dog bites, drunk driving accidents, medical malpractice, etc.

Bills, Bills, Bills:
When hiring a lawyer for an accident or injury case, most lawyers work on a contingency fee basis, only taking their fee as a percentage of any recovery they obtain. Some attorneys will even go as far as to provide a No Recovery, No Fee Promise to all clients which ensures that you’ll receive the most dedicated service they can provide. Some lawyers will even reduce their fee if at the end of the case the attorneys fee is greater than that which the client would receive. You should ask your lawyer if they will ever reduce their fees.

Lawyer’s Experience Pays Off:
Education meana nothing if the lawyer does not have the proper experience to make the magic happen. When it comes to legal matters and there is no doubt that you should go for the knowledgeable lawyer who has experience handling similar cases in the South Florida Area. Stephen Barker is definitely a lawyer with years of experience and expertise to guide you through your subrogation case in South Florida.

Be Frank with your Lawyer:

You have to be completely honest with your lawyer so that they can use that information to file your claim. They will talk to you about what can be done, and they will speak to you about what that information means. You might have to pick out the information for them if they are hoping for you to help them, and you have to be organized so that they can get the case right the first time no matter how complex or simple the case is.

You can talk to Stephen Barker today who will step in and make sure that you have the representation that you deserve. You will have the case handled by someone who knows what they are doing, and there are many people who did not know that they could sue because they thought they were stuck when they got in a dispute with the insurance company. There are a number of people who will go through this process with their lawyer so that they can have their claims paid and honored by the insurance company in question.

With these guidelines, we wish you the best in your search for the best Subrogation Lawyer for you. If you think Stephen Barker is a great fit for you, we are have the dedication and devotion to reach your goals and protect you in the murky waters of subrogation law! Contact us for more information today and let’s get you the compensation you deserve!