Child Support And Insurance Claims

Weatherford insurance attorneys already know there are situations where a settlement with an insurance company has to, in part, go to satisfying out-standing child support liens.
Under Texas Family Code, Section 157.317(a), a lien for unpaid child support attaches to the child support obligor’s personal injury claim. This lien is inferior to that of a health care provider with a valid lien, and a child support lien does not attach to the injured party / child support obligor’s attorney fees in the personal injury case. Actual notice of the lien is required for enforcement. These liens arise by operation of law and attach to all of the obligor’s property, as well as to an injury claim. Texas Family Code, Sections 157.261(a) and 157.312(d) make this clear.
Child support liens may be filed with the County Clerk in the county where the injury suit is filed, the county where the divorce (or suit in the interest of the child) originated, or in the county of the child support obligor’s residence. Child support isn’t just for dads, either; a court may order either or both parents to pay support pursuant to Texas Family Code, Section 154.001.
Regarding liens and subrogation interests, a 1970, Tyler Court of Appeals case styled, State Farm v. Elkins, says an attorney shouldn’t be expected to work for free to collect funds that are paid to a party with a subrogated interest. Here is what that case said.
This suit originated as an interpleader suit by Travelers Insurance Company and their insured, Ivy Hawthorne, to determine the rightful owner of $1,509.67. Willie Elkins, Sr. and his automobile insurer, State Farm Mutual Automobile Insurance, were impleaded as defendants. The $1,509.67 was part of a judgment obtained by Elkins against the interpleaders. State Farm asserted by cross-action that it owned the fund on deposit because it was subrogated to Elkins’ cause of action against Hawthorne to that extent. Elkins claimed the fund contending that State Farm had lost its right of subrogation by waiver or by virtue of its failing to intervene in the suit against Hawthorne. Elkins’ Attorney, Earl Sharp, intervened in the interpleader suit claiming 40% Or $603.85 of the fund as contingent attorney’s fees.
Many cases were cited by the parties to the case. The court ruled saying the following:
In the above cited cases, where the insurer has recovered against the insured, the pro rata cost and expenses incurred by insured in obtaining the money are borne by the insurer. There was no pleading or contest against attorney Sharp’s intervention. We are of the opinion that under the cases and the evidence the $603.85 contingent attorney’s fee awarded to Sharp by the judgment should be affirmed. The proceeds owed to the insurer who did not assist in their collection, must bear the cost and expense of their collection.
The portion of the judgment which awarded to intervenor, Earl Sharp, 40% Or $603.85 of the $1,509.67 deposited in the registry of the court by Travelers Insurance Company is affirmed. The award of the remainder of the said $1,509.67 to appellee, Elkins, being the sum of $905.82, is reversed and rendered for the appellant, State Farm Mutual Automobile Insurance Company.
Lesson here:
Yet another reason to be leery of settling a case with an experienced Insurance Law Attorney being involved.