Dallas Fort Worth Insurance Lawyer Blog

If someone in Dallas, Fort Worth, Arlington, Grand Prairie, Mansfield, Hurst, Euless, Bedford, Duncanville, or anywhere else in Texas gets involved in an accident and someone besides themselves are at fault, what happens when health insurance pays for the medical bills resulting from the accident? The answer is one you are going to hate. The answer is: It depends.
There are many variables that come into play, some of which have been discussed in previous blogs. Today we are going to discuss what happens when a person's own personal health insurance company pays for the medical bills incurred as the result of someone else causing injury to you.
Typical health insurance companies are Blue Cross / Blue Shield, Humana, and other names you have heard about and often times this health insurance is provided as a benefit by your employer. The significance of employer provided health insurance is that many times the health insurance provided through employment is a federally regulated plan called Employers Retirement Income Security Act, otherwise known as an ERISA plan.
ERISA plans are in a category all by themselves and are often times very difficult to deal with. Other plans, that are not ERISA are usually much easier to deal with but can still be challenging depending on the language in the plan.
The Texas Supreme Court has held, that when someone else causes one to incur medical expenses that get paid by the injured person's health insurer, that the health insurer may be entitled to "first money" from a settlement. This may be the case even where the injured party has not been made whole by the policy proceeds from the person's insurance company who caused the medical bills to be incurred. By not "made whole" meaning the injured person still is short money due to lost wages and other damages.
The most recent, significant case by the Texas Supreme Court, is a 2007 case styled, Fortis Benefits v. Vanessa Cantu and Ford Motor Company. This case is a must read to have an ideal of how subrogation sometimes works.
Keep in mind - when someone else, a third party, causes you to be injured and incur medical expenses and you have health insurance that pays those medical expenses, then, when you recover from the person who caused the injuries you have a responsibility to pay back your health insurance. When your health insurance pays, they have paid for bills that the third party should have paid for. If you do not pay them back then you are getting a "double recovery." However, it should be quickly pointed out that sometimes this is okay, it just depends on the circumstances and the writing in the health insurance policy.
It is vital to have an experienced Insurance Law Attorney involved in these situations. If it is not handled properly, the person receiving the "double recovery" could find themselves being sued by their health insurance company. This is not uncommon. An experienced attorney, using properly legal means, can often times make this "double recovery" legal. But it is a situation where the "i's have to be dotted and the t's crossed."
Health insurance companies generally include a subrogation clause in the insurance contracts and the wording will vary insurance company to insurance company and policy to policy. But these contractual provisions creating a right of subrogation are valid and should be honored. This has been made clear by the Texas Court of Appeals, Eastland, in 1974, in the case, Group Hospital Service, Inc. v. State Farm Insurance Co.
Worse, some policies have provisions written into them excusing the health insurer from paying altogether if there is a personal injury claim arising from an injury, so injury claims increasingly do not involve health insurance.
One thing to bear in mind and make clear. These policies vary widely with an ERISA plan being the hardest to deal with in these situations. And an experienced attorney can sometimes make even the worst plans deal fairly with the injured person.

What is common to a lot of residents of Dallas, Fort Worth, Grand Prairie, Arlington, Mansfield, Benbrook, Burleson, Aledo, and other areas of Texas? One, there are a lot of veterans living in the state and two, there are a lot of people who are behind on their child support payments.
First of all, there is no correlation between the two, except they are easy and short discussions. Let's talk about VA subrogation first.
When someone is injured as the result of a third person's negligent activity and the Veterans Administration has paid benefits to the injured person, the VA is entitled to be repaid for the amount of money they spent on the veteran's behalf. The reimbursement rights of the VA are written into law and are set out in the 1990 case, United States v. Maryland. This is a United States 4th Circuit case and in part says:
Federal law pertaining to veterans benefits places the Unites States on an equal footing with private hospitals in its attempts to recover from third parties the cost of medical services provided veterans for non-service-related injuries. Such equity is ensured by 38 U.S.C., Section 629(a)(1), which provides:
In any case in which a veteran is furnished care or services under this chapter for a non-service-connected disability ... the United States has the right to recover or collect the reasonable cost of such care or services ... from a third party to the extent that the veteran (or the provider of the care or services) would be eligible to receive payment for such care or services from such third party if the care or services had not been furnished by a department or agency of the United States.
The above statute defines at 38 U.S.C., Section 629(i)(3), third parties to include health care providers, employers, automobile insurance carriers, and "a State or political subdivision of a State."
Bottom line - these Veterans Administration subrogation interests have to be protected and the failure to do so correctly could put someone in the position of being sued by the Veterans Administration.
So now, what about child support liens? What do they have to do with injury claims? Most important, Texas Family Code, Section 157.317(a), says a lien for unpaid child support attaches to the personal injury claim of a person owing the child support. The lien is enforced by the Texas Attorney General. This lien is inferior to that of a health care provider with a valid lien, which essentially means that health bills get paid before the child support lien. Also, a child support lien does not attach to the injured persons' attorneys fees in the personal injury case. Think about it this way. If the attorneys could not be paid out of the settlement, then there is no incentive to get an attorney involved and thus there is no recovery to assist with the back child support payments.
An important note on child support liens is that there must be actual notice of the lien before it attaches to settlement proceeds. Contrast this with the other government liens where there does not necessarily have to be actual notice of the lien. These child support 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, Section 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 is not just for the dad - it applies to moms and dads.
The above are just two more examples why an experienced Insurance Law Attorney needs to be consulted when dealing with insurance companies.

What do residents of Dallas, Fort Worth, Grand Prairie, Arlington, Mansfield, Weatherford, and other cities in Texas need to know about subrogation? The answer is, a lot, unless you get an experieinced Insurance Law Attorney helping you.
Another important and potentially risky area of subrogation is Medicaid. Medicaid is a Federal program which is administered by the State. For us Texans, the program is administered by the State of Texas. Anytime you are discussing Federal Government liens and subrogation claims, such as Medicaid, Medicare, Veterans Administration, and a laundry list of others, it is wise to assume that such liens attach to claims and are superior to other liens, even if you have no actual notice of their existence.
Having said the above, it is important to realize that Medicaid and Medicare liens are very different creatures. This is expecially true in light of a recent United States Supreme Court case appealed from the State of Arkansas. This 2006 case is styled, Arkansas Department of Health and Human Services v. Ahlborn. A copy of the July 3, 2006 memo setting forth the Federal Government's position on Ahlborn's impact on Medicaid reimbursement / subrogation is available to the public on the Internet at:
http://www.nasmd.org/issues/docs/CMS_Advisory_Ahlborn_Settlement_Options_July%202006.doc.
This memo includes the following language about the Ahlborn decision: "A State's lien laws may only operate to recover from that portion of a settlement that is allocated to healthcare items or services, even if it means that Medicaid must forego full recovery of its claim." The memo included the following section:
What This Means for Medicaid Third Party Liability Recovery Programs:
Prior to the Supreme Court's decision in Ahlborn, CMS had interpreted the Medicaid third party liability provisions to authorize States to pass laws permitting full recovery of Medicaid assistance payments from third party liability settlements, regardless of how the parties allocated the settlement. The Supreme Court rejected this interpretation of the Medicaid statute and held that to the extent State laws permit recovery over and above what the parties have appropriately designated as payment for medical items and services, the State was in violation of federal Medicaid laws.
For Texas, the Ahlborn decision means that insurance adjusters, individuals, or attorneys dealing with a Medicare or Medicaid lien have to familiarize themselves with the current interpretations of the Ahlborn decision under Texas law.
And finally, here is something very important to know: A Texas Medicaid recipient may commit a misdemeanor by failing to notify the Texas Department of Human Services of a tort claim or cause of action. This can be seen in the Texas Human Resources Code, Section 32.033(b) and the Texas Penal Code, Section 12.23. In other words, if you do not handle these federal benefits properly as it relates to their lien / subrogation interests, you may be guilty of a criminal offense.

A large part of the population in Dallas, Fort Worth, Arlington, Grand Prairie, Weatherford, and most all other cities in Texas receive some form of government benefits. So what happens when someone receiving Medicare benefits gets a settlement in an injury case from an insurance company?
The answer to the above question is, "it depends."
It should be obvious that if the benefits received by someone on Medicare are unrelated to the claim being made, then there is nothing to worry about. However, if the person receives a settlement based on injuries and medical bills that were paid for by Medicare, then Medicare is entitled to be paid back for any monies they paid for the benefit of the person receiving the benefits.
The most typical scenario is: A person who receives Medicare benefits is involved in an auto accident where someone other than the person receiving the Medicare benefits is at fault. The Medicare recepient goes to the emergency room and receives care until they have recovered from the injuries that were incurrred. The bills incurred by the Medicare recepient are all paid for by Medicare.
When the above happens, Medicare has a lien for any monies paid to settle the claim against the insurance company that the Medicare recepient is entitled to.
Medicare liens are sometimes referred to as "super liens" and for good reason. A Medicare lien is superior to other types of liens and does not even require written or actual notice to the parties involved. They are just suppose to be paid back, period. Medicare can recover from either party or either party's attorney. There are several Federal laws saying so.
Texas Courts have sometimes upheld Medicare's "super lien," even in the case of uninsured motorist benefits. This was shown in the case, Lewis v. Allstate, where Allstate was held not to have breached its contract with its insured by including Medicare as a co-payee on the settlement check for uninsured motorist benefits when both parties knew Medicare had issued payments for the insured's medical treatment. This was a 2006 case. In the Lewis case, the insured person conceded that Medicare would have had the right to seek reimbursement from an insurance company that knew or should have known about payments made by Medicare but failed to protect Medicare's rights. In this case, the insured attempted to rely on a 2000 case decided by the Beaumont Court of Appeals, styled Texas Farmers Insurance Company v. Fruge, in which the Court held "that it is a breach of contract for an insurer to include Medicare on a benefit check where the insurer had no reason to suspect that Medicare had any entitlement to a portion of the benefits paid." The Court refused to hold that Texas Farmers Insurance Company had a duty to determine the amount paid by Medicare, and distinguished Fruge, wherein the insurer knew Medicare had made a very small payment, yet it included Medicare as a co-payee on checks totaling nearly ten times that amount.
When dealing with Medicare it is not just important, it is vital that an experienced Insurance Law Attorney be involved in the settlement to keep the Medicare recepient out of legal trouble.

What if someone in Fort Worth, Arlington, Mansfield, Mesquite, Garland, Irving, Grand Prairie, Dallas, or anywhere else in Texas, is involved in an accident and goes to the hospital for treatment? Are there any special laws that apply?
The answer is yes. It depends on the circumstances, but often times, what is called a "hospital lien" comes into play. If this hospital lien is not properly dealt with it could cost a lot of money and heartache.
Texas public policy strongly supports hospital liens, and it is important to understand that these liens are not just applicable to hospitals; they may also operate for the benefit of EMS providers and doctors at teaching hospitals whose bills are not already included in the bill. The rights of hospitals and certain other medical providers to be paid from settlement proceeds or a judgment begins with the Hospital Lien Statute. This is found in the Texas Property Code, Chapter 55. It says, in relevent part, that a lien attaches to "any cause of action, judgment, or settlement" received as a result of an accident for which the person was admitted to a hospital within 72 hours of the injury, as well as any hospital to which the injured person is subsequently transferred for the same injuries. This is found in Texas Property Code, Section 55.002. These hopital liens must be filed prior to settlement in order to be valid, and hospital liens are limited to "reasonable and regular" charges within the first 100 days following the injury. Even the attorney representing the injured person may have to wrestle with the hospital for first priority, as seen in the Texas Supreme Court case styled, Bashara v. Baptist Memorial Hospital System, decided in 1985.
The Dallas Court of Appeals in 1979, in the case styled, Baylor University Medical Center v. Travelers, said that the intent of the Hospital Lien statute was to save lives, by "...inducing hospitals to receive a patient, injured by the negligence of others, by giving the hospital a lien on the claims, suit or settlement of the patient."
An important exception to the hospital lien statute is stated in the case, Members Mutual Insurance Company v. Hermann Hospital, decided in 1984, by the Texas Supreme Court. It says that a hospital lien does not attach to uninsured/underinsured motorists benefits. The reasoning is that the statute is to apply to settlements recovered from third parties and not to underinsured/uninsured benefits.
Another situation that the hospital lien statute does not apply to is a wrongful death case. Atleast that was the decision by the Fort Worth Court of Appeals in the case styled, Tarrant County Hospital District v. Jones, decided in 1984.
Rather than getting some relief by settling a case with the person who caused injuries in an accident, the end result could find the injured person being sued by the hospital if the hospital lien statute applies and is not properly handled.

What is a lien? The person in Flower Mound, Haslet, Saginaw, Irving, Carrolton, De Soto, Grand Prairie, Arlington, Mansfield, Fort Worth, or anywhere else in Texas may ask that question.
Generally speaking, in the insurance context a lien is a right to money that a third person may eventually get. Others describe it as a property right which remains attached to an object tht has been sold, but not totally paid for, until complete payment has been made. Another way of putting it is, a hold or claim which one person has upon the property of another as a security for some debt or charge.
In the insurance world a lien normally arises where some person or business causes injury to someone. After the injury, the injured person seeks and receives medical care that his personal health insurance pays for. When this occurs the health insurance company will usually have a subrogation lien against the person or business that caused the injury.
A personal injury settlement or judgment may create tension between insured people and their health insurance company and their medical providers. The right of an insurer of a medical provider to be paid from the proceeds of a settlement falls under the general category of subrogation. Subrogation is defined as, "The substitution of one person for another, expecially the legal doctrine of substituting one creditor for another."
Both "subrogation" and "lien" are terms of art with specific meanings, and it is sometimes hard to be true to the meanings. Legally, this is a challenge, as the terms are often used interchangeably by legislatures and courts and Judges. In the insurance context, it generally means the right to money that a third party may eventually get. Liens are perfected (that is, made collectable) by filing them with the appropriate County Clerk. Subrogation, which again is a term sometimes used interchageably with "lien," and sometimes along with it, as in "subrogation lien," is a right of repayment that can be created by a statute or by contract.
Before going further, when talking about liens and subrogation, it is vital that an experienced Insurance Law Attorney be consulted. Otherwise, a person receiving money and benefits can find themselves being sued. Sometimes a criminal wrong is committed unknowingly when these issues are not handled properly.
Subrogation interests are created by contract, and a third party's liability for same can be extinguished by a release of the wrongdoer by the injured person.
One example is where a person's car is damaged in a wreck with another person and the other person was at fault. The person's car who was damaged makes a claim with the insurance of the atfault person but the insurance company is too slow to fix the damage so the person with the damaged car gets his own insurance company to fix his car. He gets his car fixed and goes on about his life when two weeks later the atfault driver's insurance company calls and concedes they are atfault and pays money for the damage to the car. If the person who has his car damaged accepts the money he can get in trouble. Why? Because when he got his own insurance company to fix his car, his insurance company became the one who had the right to receive the money from the atfault driver's insurance.
Another example is, same as above but the person was also injured and went to the hospital and had his health insurance pay for his medical bills. Later when the atfault driver's insurance admits fault and pays the injured person for his injuries, the injured person's health insurance company has a subrogation interest that must be satisfied to the extent of all monies paid to the injured person.
The confusing thing about the above is all the exceptions that can come into play.

What if a policyholder in Grand Prairie, Arlington, Fort Worth, Dallas, Weatherford, or anywhere else in Texas, collects uninsured motorist benefits from their insurance company and then later makes a claim against the at fault driver, do they have to pay back their insurance company? The general answer is yes, but there may be a few exceptions, depending on the circumstances.
This issue came up in the case, State Farm Mutual Automobile Insurance Company v. Shannon Perkins, et al. This case was decided by the Texas Court of Appeals in Eastland, Texas. It was an appeal from the 35th District Court, Brown County, and was decided July 13, 2006.
The background facts are that Shannon Perkins was involved in an automobile accident with Mike Cooper Jr. on May 22, 2003. Perkins was injured in the accident. Cooper was driving a truck owned by Harold Oaks. Cooper did not have insurance. State Farm Mutual Auomobile Insurance Company (State Farm) paid Perkins $25,000 in uninsured motorist benefits. Oaks had an automobile liability policy with State Farm. Perkins sued Oaks for her injuries. State Farm intervened in the lawsuit saying they were entitled to subrogation on the $25,000 they had already paid. At trial the jury awarded Perkins $53,000 for her injuries. State Farm insisted that they were intitled to $25,000 of that amount.
The clear language in the State Farm policy entitled them with contractual rights of subrogation and reimbursement. Also, Texas Insurance Code, Section 1952.108, gives State Farm a right to subrogation.
The court discussed five reasons why subrogation is not allowed in certain situations. This is known as the antisubrogation rule. First, it is based on the premise that an insurer who seeks subrogation stands in the shoes of the insured and can take nothing by subrogation but the rights of the insured. Because a person cannot sue himself for damages, that person's insurer, who stands in the person's shoes for subrogation purposes cannot sue the person either. Second, the insurer that has accepted premiums to cover certain risks should not be allowed to pass the same risks back to its insured in a subrogation action. Otherwise, the insurer would be allowed to avoid the coverage that the insured has purchased. The third reason is the relationship between an insurer and its insured are fraught with conflicting interests. Fourth, if insurers were permitted to sue their insureds for subrogation, the insurers would be able to obtain information from their insureds under the guise of policy provisions for later use in a subrogation action. And fifth, an insurer's right to sue its insured could be interpreted by the insurer as a judicial sanction to breach the insurance policy.
But as the court pointed out, the difference in this case is, State Farm paid uninsured benefits to Perkins under her policy, and State Farm seeks subrogation and reimbursement for those benefits from the proceeds of Oak's policy. To not allow subrogation in this case would be to sanction a double recovery by Perkins. She would have the $25K of underinsured benefits, plus $53k of Perkins policy for a total recovery of $78K. This after a jury had determined her claim was a total of $53K.
In this case there were some other subrogation theory's discussed that are interesting reading. Bottom line is, a person must seek the advice of an experienced Insurance Law Attorney. Handling these subrogation issues in an incorrect manner can result in the policyholder being sued by the insurance company.

What if you just settled your insurance claim with the person who caused your financial loss. And lets say you live in Grand Prairie, Arlington, Dallas, Fort Worth, Weatherford, or anywhere else in Texas. What happens if your own insurance company sends you a letter asking for a return of money they paid on your behalf?
The case law in Texas is pretty simple sounding. When an insured settles with or releases a wrongdoer from liability for the loss before payment of the loss has been made by the insurance company, the insurer's right to subrogation ends. This was stated in 1991, in the Houston Texas Court of Appeals case, Interstate Fire Insurance Co. v. First Tape, Inc.
In this case, Gary Pentecost (Pentecost) owned a commercial building which was insured by Interstate Fire Insurance Company (Interstate). Pentecost leased the building to First Tape, Inc. (First Tape). The lease between Pentecost and First Tape contained a clause on insurance and liability that read in relevant part that the two mutually agreed to release each other from liability for any acts of negligence that caused harm to the building and further agreed that there would be no rights of subrogation by their respective insurance companies. Further, the lease was transferable.
First Tape later sold its assets to Gundle Lining Systems, Inc., including the lease. A short time later, one of the machines used in the manufacturing process started a fire which consumed the building and contents. Interstate paid the claim and then tried to subrogate against Pentecost. The court ruled that, because Pentecost, in the lease, had released First Tape and therefore Gundle, that Pentecost had no claim against First Tape or Gundle. Since Pentecost had no claim, Interstate had no claim.
This rule derives from the basic principle of subrogation that an insurer acquires no subrogation rights until it pays the loss. The insurer then acquires only such rights against the wrongdoer as the insured had at that time. Thus, when the insured has settled its claim and released its cause of action against the wrongdoer, the insurer can acquire no subrogation right against the wrongdoer when it later pays the claim. This was restated in 1997, by the San Antonio Appeals Court in the case, In re Romero.
These laws and rules are more reasons for one of the residents above to seek the advice of an experienced Insurance Law Attorney when involved in an insurance claim. Otherwise they run the risk of owing money back to the insurance company.
It should be noted that because of this principle, the Texas Auto Policy contains a "settlement without consent" clause designed to prevent an insured from settling with a wrongdoer without first obtaining the consent of their own insurance company. This consent clause prevents the insured from extinguishing the insurance companies subrogation right without the companies knowledge. If they do, then the insured could become personally liable for the costs.

What if a resident of Grand Prairie, Weatherford, Dallas, Arlington, Fort Worth, or some other Texas city, suffers a loss because of some other persons negligence. Their own insurance company pays for the loss. Then the other persons insurance company pays for the same loss. What happens next?
This is where "contractual subrogation" rears its head. Contractual subrogation arises by virtue of an agreement between the parties and is awarded under that agreement, usually but not always, subject to the dictates of equity.
The Texas Supreme Court case dealing with this is, Fortis Benefits v. Cantu. This was a case decided in 2007. Here the Texas Supreme Court held that an insurance company, here Fortis Benefits, could recover benefits from the insured's (Cantu) settlement even if the insured is not made whole. In this case, Cantu was severly injured in an automobile accident, and later sued several defendants. The health insurer, Fortis, intervened in the case, asserting a right of subrogation on its prior payments to Cantu. Cantu settled with the various defendants, and Fortis sought to recover solely from Cantu. Cantu, who had not recovered enough from the settlement and from Fortis to cover her actual damages, argued the "made whole" doctrine. In other words, she argued that she should not have to repay Fortis until all her damages had been paid and she was "made whole." The court disagreed with Cantu, saying the "made whole" doctrine did not apply because in the Fortis insurance contract there was language saying that Fortis was entitled to recover for all the benefits it had paid if and when the insured made a recovery against a third party.
In this Fortis case, the Texas Supreme Court found that equitable principles do not govern in contractual subrogation cases. The court reasoned as follows:
We do not disagree that equitable and contractual subrogation rest upon common principles, but contract rights generally arise from contract language; they do not derive their validity from principles of equity but directly from the parties agreement. The policy declares the parties' rights and obligations, which are not generally supplanted by court fashioned equitable rules that might apply, as a default gap-filler, in the absence of a valid contract. If subrogation arises independent of any contract, then an express subrogation agreement would be superfluous and serve only to acknowledge this preexisting right, a position we reject. Contractual subrogation clauses express the parties' intent that reimbursement should be controlled by agreed contract terms rather than external rules imposed by the courts.
Furthermore, the court noted that "where a valid contract prescribes particular remedies or imposes particular obligations, equity generally must yield unless the contract violates positive law or offends public policy."
This case further illustrates the absolute must that a person seek the help of an experienced Insurance Law Attorney when they find themselves in these types of situations.
The court noted that, if the insurer in Fortis Benefits had claimed an equitable right of subrogation, then the "made whole" doctrine would have applied, per Ortiz v. Great Southern Fire & Casualty Ins. Co.

A Weatherford man suffers a property damage loss. Or maybe he is from Grand Prairie, Dallas, Arlington, or Fort Worth. His own insurance pays his losses then he makes a claim against the insurance company of the person who caused the loss. How does that work?
The doctrine of equitable subrogation is applied liberally and is broad enough to include every instance in which one person, not acting voluntarily, has paid a debt for which another was primarily liable and which in equity and good conscience should have been discharged by the latter. This was stated in the case, Matagorda County v. Texas Association of Counties Government Risk Management Pool, a 1998, Corpus Christi Court of Appeals case.
The purpose of equitable subrogation is to allow the insurance company to recover the monies it has paid out, only after the insured injured person is fully compensated. The Texas Supreme Court explains how this works in, Ortiz v. Great Southern Fire & Casualty Ins. Co. This is a 1980 case, wherein the Ortiz home and contents were damaged in a fire caused by the negligence of a third party. The home was insured, but the contents were not. The money damages recovered from a settlement with the third party (a carpet cleaner) were less than the amount of damages that Ortiz suffered. The insurance company, Great Southern Fire & Casualty Ins. Co., was only entitiled to subrogate to the extent that the sum of the insurance collected, plus the amount allocated in the settlement agreement to real property damage, exceeded Ortiz real property loss. Because Great Southern could not show at trial what amount, if any, of the settlement agreement was allocated to Ortizs' real property loss, it was not entitled to seek the amount it paid to Ortiz from Ortiz settlement.
The court noted in this case that one reason the right of equitable subrogation is granted is to prevent the insured person from receiving a double recovery.
Lots of people do not like to get attorneys involved. Some reasons are they believe attorneys are too expensive. Others don't feel their case is important enough or big enough, and others just don't like to be thought of as "sue happy." But without an experienced Insurance Law Attorney, this person will find themselves being sued by their own insurance company under this equitable subrogation theory unless they get an attorney involved to help them. Often times an attorney can lawfully prevent any money having to be paid back to the insurance company, like in the Ortiz case.
The court in Ortiz did not hold that the amount recovered by Ortiz from Great Southern and the third party must exceed the damages to both insured and uninsured property before Great Southern is entitled to subrogation. Rather, the court said, if any portion of the $10,000 settlement was intended as compensation for damage to the insured property. then Great Southern, after a deduction of its share of the cost of collection, would be entitled to subrogation to the extent that the sum of insurance collected plus the amount allocated in the settlement agreement to real property damage exceeded the Ortizs' loss to their home. The court pointed out, in this case the record did not reflect how much of the $10,000 settlement was intended for damages to the insured real property. If a portion of the setttlement was intended to be compensation for real property damages, Great Southern should have made sure the settlement agreement so specified.

What if that Grand Prairie resident, or someone from Fort Worth, Arlington, Dallas, or out in Weatherford gets a bunch of money in an insurance settlement. That's a good thing, Right? Well maybe not. It depends on whether or not there were any subrogation interests involved and whether or not those subrogation interests were properly handled.
USLEGAL.com defines subrogation as the substitution of one person in the place of another with reference to a lawful claim or right.
Subrogation commonly occurs in insurance matters, when an insurance company which pays its insured client for injuries and losses then sues the party which the injured person contends caused the damages.
Subrogation places one party in the place of another so that the new party gains the rights of the former party regarding a claim. This is stated in the case, Hartford Casualty Insurance Company v. Albertsons Grocery Stores, a 1996, Fort Worth Court of Appeals case. In this context, the insurance company or insurer "steps into the shoes" of the insured to pursue a claim against the wrongdoer.
As explained in the case, In re Romero, in 1997, by the San Antonio Court of Appeals, the insurer's payment creates the right; the insurer acquires its subrogation rights once it pays the loss.
All of what has just been said most normally arises in the context of a personal injury claim. The injured person has their own insurance pay benefits and then goes after the insurance of the person or company who caused their injury. In Romero, a plaintiff sued a defendant in county court for damages arising out of a car wreck. Her insurer intervened in the lawsuit and alleged that it had paid all or part of her damages and was thus subrogated to her recovery against the defendant to the extent of its payments. She then refiled her case in district court, and the county court dismissed the case with an order disallowing it to be refiled. The appeals court held that the dismissal did not extinguish the insurer's subrogation claim. From the point of payment forward, the court noted, the viability of the insurer's part of the cause of action does not rise or fall with the fate of its insured's part of the cause of action.
The important thing to know about subrogation is that when a subrogation issue is present, an experienced Insurance Law Attorney must be consulted. An attorney who is used to dealing with these subrogation issues will make sure they are handled properly so that the insured does not have to worry about being buried in legal issues that would arise when the subrogation is not properly handled.

Someone in Grand Prairie has their insurance company pay a benefit for them. Or maybe the person is in Arlington, Dallas, Fort Worth, Mansfield, or out in Weatherford, Texas. When a claim is paid by a person's own insurance company, and the claim resulted from the fault of another person or company, then the person's own insurance company has a subrogation right. Well, what does that mean to you?
One web-site defines subrogation as the substitution of one person in the place of another with reference to a lawful claim or right. Subrogation commonly occurs in insurance matters, when an insurance company which pays its insured client for injuries and losses then sues the party which the injured person contends caused the damages.
There are three types of subrogation: equitable, contractual, and statutory.
Here is equitable subrogation as stated in the case, Lexington Insurance Company v. Gray, in 1989, by the appeals court in Austin, Texas. "Equitable subrogation arises by operation of law." While insurance contracts typically give an insurance company a right of subrogation, when it pays a loss, it is equitably subrogated to any right the policyholder may have against the person causing the loss, whether or not the policy provides expressly for subrogation.
This equitable subrogation is granted the insurance company because otherwise the policyholder would receive a double recovery, upon payment by the wrongdoer, which the law does not sanction. This was stated by the Texas Supreme Court in, Ortiz v. Great Southern Fire & Casualty Insurance Company, in 1980.
Contractual subrogation - also called "conventional" subrogation - arises by contract between the parties. Some, or most, insurance policies expressly provide a subrogation right to the insurance company and the policy language addresses its scope and limits.
The third kind of subrogation is called, statutory subrogation. Statutory subrogation is a right created by law, or written statute, and is governed by the terms of the statute under which it is claimed as a matter of statutory construction. This is discussed in the case, Texas Association of School Boards, Inc. v. Ward, by the Texas appeals court in Waco, in 2000.
An experienced Insurance Law Attorney can help with these subrogation issues. It is important that these issues are handled properly. Failure to properly handle these issues is actually a criminal offense as it relates to some government subrogation rights. At the least, failure to properly handle subrogation issues can be a financial hardship. There are large numbers of people who collect benefits from their own insurance company, then settle with the people who caused the loss without the assistance of an attorney. Later, they are contacted about these subrogation rights and find themselves in legal and financial trouble.

Texas Insurance Code, art. 5.06-1 and the particular policy's "Right to Recover Payment clause create a statutory and contractual right of subrogation against a third party motorist to recover uninsured and underinsured payments the insurance company makes to its customer. If the insurance company makes a payment to any person under this coverage, the insurance company is entitled to recover up to the amount of the payment from the proceeds of any judgement or settlement with the person. This is spelled out in art.5.06(6).

The result of this rule is that a person who collects uninsured or underinsured benefits from their insurance company as the result of someone else's negligent actions in a car wreck type of situation, cannot turn around and sue that individual. Or, if you do sue the responsible party and they are successful in collecting money from that individual, then they must pay back the insurance company for the benefits they have paid on the insured persons behalf. This of course is limited to paying the insurance company back only up to the amount they have paid out. Any excess would belong to the injured, insurance company customer. The purpose of this rule is to prevent a double recovery by the injured party.

What happens most of the time in real life is that the injured, not at fault person, makes a claim against the person who caused the injury. The injured person then discovers that the atfault person is either uninsured or underinsured. They then make the uninsured or underinsured claim against their own insurance company. Rarely, or almost never does the injured party pursue a further claim against the atfault party. However, the insurance company that paid the benefits will do an asset check on the atfault party and make a determination as to whether or not it is financially worthwhile to pursue the atfault party.

There are some legal loop holes to jump through to properly make these types of claims. If they are not pursued properly the insured person risks losing some of their benefits and for this reason need to seek the advice of an experienced Insurance Lawyer Attorney.

One advantage that a policy holder has when making a claim for uninsured or underinsured benefits is that the policy holder does not have to prove the atfault person is uninsured or underinsured. It is the burden of the insurance company to prove the atfault person is not uninsured or underinsured. This burden is placed on the insurance company by art. 5.06-1(7).

Whether you live in Dallas, Fort Worth, Arlington, Grand Prairie, or any other metroplex city, or in a smaller town such as Weatherford, Granbury, Cleburne, or Azle here is something that happens just about every day. An accident occurs because of someone elses negligent actions. Someone is injured and gets medical treatment. The medical treatment is paid for by the injured persons' health insurance, such as Blue Cross Blue Shield, Humana, Prudential, or any number of other health insurance companies. Maybe the medical care is paid for by the injured persons' own auto insurance company through the personal injury protection (PIP) benefits or med-pay benefits. Most property insurance like homeowners policys and commercial policys have some sort of med-pay that pays for injuries.

In most these cases, someone else, or someone else's insurance company is ultimately responsible for the injury that was incurred. The medical benefit that was used to pay bills is seldom going to pay all the bills. The injured person still has co-pays and deductibles to meet and sometimes there are caps on what is paid. Also, these medical benefits do not pay lost wages or anything for pain and suffering or anything for impairment or disfigurement or scarring that may have resulted from the injury. As a result of these other losses, even the person who does not want to "sue" anybody has to make a claim against the responsible people and their insurance company to recover all their losses.

When the injured persons' insurance pays for a loss that was ultimately the resposibility of the other person or the other persons' insurance, the injured persons' insurance has a subrogation right to the monies received from others. In other words, the injured persons' insurance has to be paid back and there is no legal, double recovery.

In the car insurance scenario, Texas Insurance Code, Article 5.06-1, creates a statutory and contractual right of subrogation against a third party motorist to recover uninsured and underinsured motorist benefits the insurance company makes to its customer. It says that if an insurance company makes a payment to any person under this coverage, the insurer is entitled to recover up to the amount of the payment from the proceeds of any judgment or settlement with the person.

In the health insurance situation, this is found in Texas Insurance Code, Section 1506.301. For property and casualty insurance, this law is found in Article 21.28-C.
This subrogation right also applies to Workers Compensation Laws, Veterans Benefits, Medicare, and Medicaid, and dozens of other situations.

What is important to realize here is two things; 1) that these laws exist and if they are not properly taken into account it can cost the injured person even more, and 2) an experienced Insurance Law Attorney can handle these situations for you and often times defeat the law requiring that the monies be repaid or atleast reduce the amount that has to be paid back to the entities.