Florida is a no-fault state when it comes to auto accidents, which means injured claimants first seek redress for injuries from their own insurance company. If injuries and/or losses exceed $10,000, claimant may step outside the no-fault system and pursue action against the at-fault driver and/or his insurance company.
When an injured plaintiff seeks action against an at-fault driver’s insurer, this is a “third party” action. In cases where plaintiff’s insurance company has paid all or a portion of damages that it’s later determined should have been paid by that third-party insurer, plaintiff’s insurer may seek “subrogation,” or reimbursement for those expenses as part of plaintiff’s third-party claim.
It’s not just insurance companies that can stake a claim to funds recovered in the civil litigation process. As the recent case of Chand v. Bolanos reveals, other third parties may intervene as well.
An experienced car accident lawyer should be able to anticipate these actions, and formulate an effective legal strategy that still results in plaintiff being fairly compensated for his or her total losses.
According to court records in Chand, plaintiff was struck by an at-fault driver in 2012. At the time, he was treated for his injuries at a local hospital. Plaintiff then sued the at-fault driver, as well as several others, and later settled with that driver for $100,000. He filed for notice of partial settlement.
Later the city, which owns the hospital, filed a lien against plaintiff for $370,000 in plaintiff’s personal injury case to recover the cost of medical services provided to him. Plaintiff moved to expunge the lien, but the trial court found it to be valid pursuant to city health codes, which allows liens to be placed on a patient’s recovery form a third-party wrongdoer.
Plaintiff appealed to the California Court of Appeal, First Appellate District, Division Three, which affirmed the trial court’s findings. Justices found unpersuasive plaintiff arguments that the lien was invalid because he didn’t agree in writing to receiving medical treatment from the city. However, the statute upon which plaintiff rests that argument didn’t exactly require such an agreement, particularly in emergency situations.
This is one of the reasons why it is so important to identify and pursue action against any and all tortfeasors, and also to take into full consideration any unpaid medical expenses when negotiating an out-of-court settlement agreement. A patient who incurred $370,000 in medical bills after a wreck should be extremely careful when agreeing to accept a $100,000 settlement, particularly if those medical bills are outstanding. The end result could be plaintiff is still in the whole $270,000 – or more, after attorney fees.
Liens and subrogation do have a purpose. For example, the hospital here extended treatment to plaintiff in excess of what his insurance (if he had any) allowed. So long as such treatment was reasonable, it allowed patient to receive necessary care. However, reimbursement for the cost of that treatment has to come from somewhere. Ideally, it would be form the tortfeasor/ wrongdoer. Subrogation, meanwhile, allows insurers to pay out claims on your behalf – so you get reimbursement sooner – while preserving what would be your right to recover from the tortfeasor and giving it instead to the insurer.
That said, these entities are not looking out for your best interests. That’s the job of our Fort Myers accident attorneys. If you have questions about filing a car accident lawsuit, call us today.
If you have been a victim of a traffic accident, call Chalik & Chalik at (954) 476-1000 or 1 (800) 873-9040.
Chand v. Bolanos Oct. 15, 2015, California Court of Appeal, First Appellate District, Division Three