News Update for February 16, 2012

Safety while driving continues to be a major issue for both Columbus, Georgia and East Alabama drivers.  Sadly, another severe car wreck resulted in loss of life in Columbus last night when a woman from East Alabama was killed as a result of a vehicle filliping from a severe impact.  Muscogee County news teams are following the tragic event.   For more information from those news teams click here or here.

While initial reports do not suggest that this wreck occurred due to texting or other cell phone use, that topic is also making news again today as the Alabama legislature pushes again to follow suit with many other states, such as Georgia, in banning texting while driving.  For more coverage of that issue, click here.  As we have discussed before, cell phone usage in vehicles can easily lead to car accidents.  While many states have adopted laws prohibiting such use in order to protect citizen's on the roads.  Enforcement continues to be a difficult task.

State Farm Loses Big in Bama

Recently the Alabama Court of Civil Appeals issued an interesting decision on medical payments subrogation. The case is Mitchell v. State Farm. The facts are that the Plaintiff hired an attorney who ultimately secured a settlement for the Plaintiff. State Farm contributed nothing towards effectuating the settlement. It was solely the work of the Plaintiff’s attorney negotiating with the defendant’s insurance company, Cotton States. State Farm paid out $5,000.00 in medical payments coverage to Plaintiff under their contract of insurance with the Plaintiff (for which Plaintiff paid good money in the form of premiums).

Like a good neighbor, State Farm sought full repayment of $5,000.00 from the Plaintiff’s settlement. Never mind that the insured paid premiums for the medical payments coverage to be there when the Plaintiff needed it; never mind that State Farm did absolutely nothing in generating the settlement funds from which they sought full repayment; never mind that this was their own insured from whom they sought to take money meant to compensate the insured for their injuries.

Unfortunately for State Farm, an attorney stood up against this unfairness and won. The Court held that State Farm had to reduce its medical payments claim for reimbursement by the amount of the Plaintiff’s attorney fee. This is a textbook application of what is called the “common-fund doctrine.” The doctrine says that if an attorney creates a pool of money—like in a personal injury settlement—then someone who seeks reimbursement from that fund must share in paying the attorney’s fee. The principle is quite simple, really. If someone’s work benefits you, you have to pay them. It’s just not fair otherwise.

The opinion, however, is not without its flaws. The court seems to suggest that State Farm could simply modify its policy language to disavow the common-fund doctrine. That would mean that an insured would have to pay back what State Farm paid out for medpay benefits that the insured already pays a premium for. However, there is also language in the opinion that the common-fund doctrine might still apply under equitable (“fairness”) principles. We will have to wait and see what the Court does in the future. For now, insurance companies must SHARE in the cost when a Plaintiff’s attorney works and settles a case.

Of course the attorneys at Gary Bruce, P.C. are always happy to discuss your case with you if you have been hurt in a wreck. It is often difficult to determine who has a valid claim for reimbursement on a given settlement. The attorneys at Gary O. Bruce, P.C. know many techniques used to defeat or substantially reduce claims for reimbursement on your settlement. Call us for a free consultation.

HOW DOES HEALTH INSURANCE PLAY INTO MY INJURY CASE IN ALABAMA?

Recently, the Alabama Court of Civil Appeals issued a disappointing decision that permits insurance companies and their defense attorneys to introduce evidence that the Plaintiff’s medical bills were paid by the Plaintiff’s health insurance company.

The case is Crocker v. Grammer. So, if a Plaintiff, injured through no fault of her own, is hit by a DUI driver, the Courts in Alabama say that the DUI driver can minimize the amount he owes the Plaintiff by suggesting that the actual bill incurred by the Plaintiff was much less due to the presence of the Plaintiff’s own health insurance. Since most health insurance companies have contractual adjustments with health care providers for less than the provider’s sticker price, this, in essence, reduces the Defendant’s liability to Plaintiff.

The problem with the Court decision is that it disregards well-settled rules of evidence and long-standing principles of common law. The Alabama Rules of Evidence state that only relevant evidence is admissible. The fact that a Plaintiff has health insurance is really not relevant to anything as to what the Defendant is responsible for due to a wreck. It is about as relevant as the Plaintiff having a rich grandmother. Thus, the Court disregarded this principle of evidence. Furthermore, the decision does away with the collateral source rule. This is a principle of common law that suggests that the tortfeasor does not get credit for outside sources that might pay the Plaintiff’s medical bills. After all, the Defendant is the one who caused the harm to begin with. The common law held that, if anyone should receive a benefit in this situation, it should be the Plaintiff, not the defendant who caused the harm in the first place.

Make no mistake. What the Alabama court has done is shifted some of the cost of the Defendant’s harm to the Plaintiff. Keep in mind that the Plaintiff who has health insurance pays good money in the form of premiums. What the court has done is punished Plaintiffs with health insurance for being reasonable. They are the ones who went out and bought health insurance to begin with. Instead, the Plaintiffs who do not have insurance may claim the full sticker price of the bill. For Plaintiffs who have governmental insurance through Medicare, Medicaid, or Tricare the Court has shifted some of the cost for the Defendant’s negligence to the taxpayer.

You can see the problems this creates when you have two individuals in the same wreck—one with health insurance, the other without. In essence you have two different, unequal measures of damages. This violates the equal protection clauses of the federal and state constitutions.

However, the attorneys at the Law Offices of Gary O. Bruce, know techniques to minimize the effects of this decision for clients who have health insurance and are injured in Alabama. We are always willing to discuss your potential claim/case through a free consultation.