The U.S. Supreme Courtwill soon hand down a decision on a personal injury casethat originated out of Florida. The case will have a big impact on victims of negligence and insurance companies alike because the decision relates to how and when an insurer can collect from a judgment a victim recovers.
The case comes to the Supreme Court after a U.S. district court and the 11th Circuit Court of Appeals ruled against the victim in this case. The issue the High Court must decide is whether the trustee from an employee insurance plan can go after the settlement or judgment money that a victim gets after filing a lawsuit, even if that money is gone and spent.
Facts and Background of This Case
This case followed the fact pattern of a typical accident and injury case. The victim was a man involved in an accident that caused major injuries to his spine. Because of the accident he had to get spinal fusion surgery and go through rehab to be able to live a normal life. His medical costs exceeded $100,000. Luckily for him, the man had an insurance policy through his work that paid his medical expenses, which it did.
After recovering from his injuries the man brought a lawsuit against the driver who he alleged to have caused the accident. The case did not go to trial but settled for $500,000. After winning this case his attorneys collected their contingency fee and costs from the settlement, and the man was left a large amount of money as compensation for his pain, suffering, and hospital bills.
Employer Plan Seeks Subrogation
It was at this point that the man’s insurance plan demanded that he reimburse them for the hospital bills that were paid for him. When an insurance company or employee benefits plan seeks to get reimbursement from benefits they have paid out this is known in the law as subrogation. And according to the company who ran this man’s plan they were entitled to be recompensed.
The two sides conducted settlement talks about whether he owed them money, but could not come to a settlement. That is when the company filed suit against the man. The lawsuit was filed under ERISA laws, a set of federal rules and regulations that entitle employment plans to exist and regulate their behavior. Essentially the plan’s group argued that the text and spirit of the man’s insurance policy made it clear that they could recover from the man’s settlement funds.
The man had a different argument. He said it was not fair to allow the company to collect from him because the money in the judgment had already been paid out to other entities and otherwise spent. Therefore there were no settlement funds from which the company could recover. But the district court and court of appeals did not agree with this position. Now the Supreme Court must decide whether an employment benefits plan can recover reimbursement funds that have already been spent under ERISA. It will have a lasting effect on personal injury claims across the country.
Panama City Area Accident and Injury Attorneys
The law of personal injury is complex and often changes. As the High Court makes their decision in this case, at The Pittman Firm we will adjust our cases accordingly. If you have been injured in an accident or otherwise injured in the Panama City area, contact us. We look forward to going over your case with you.
See related blog posts: Florida Supreme Court to Decide on Attorney's Fees Case; Florida Courts: An Overview.