June 29, 2016
When accidents result in personal injury, victims commonly seek reparation through the courts to mitigate the financial burden, but winning the lawsuit may not be the end of the fight. If your health insurance covered your medical bills, they can make a claim for reimbursement from your settlement. Fortunately, a Supreme Court decision gives you options to stand your ground.
When a drunk driver hit Robert Montanile in December 2008, he required extensive surgery to repair the damages with costs exceeding $120,000. Montanile filed a civil lawsuit and was awarded $500,000 in a settlement. More than half of that sum was eaten up in attorney fees. Then, his insurance plan claimed that they were entitled to be reimbursed for the cost of his care, arguing that his bills would be paid twice if he were allowed to keep the entirety of his remaining settlement.
Montanile brought on additional legal counsel to try and work out a compromise but when discussions broke down, his lawyer gave the insurer two weeks to respond before he’d release the remaining funds to his client. When no response came, he made good on his word. Montanile proceeded to spend the remainder of the settlement, paying his new lawyer and taking care of himself and his daughter. When the insurer later sued him for compensation, the lower courts backed up their claim. Fortunately for Montanile, the Supreme Court did not. They ruled in an 8-1 decision that the insurer could not go after Montanile’s personal assets to reimburse themselves but could only seek specific funds or goods connected to the initial settlement. Had the insurance company responded sooner to Montanile’s lawyer, the outcome might have been very different.
Many states have laws allowing you to cover lost wages and pain and suffering compensation before an insurer can make a claim. However, states vary on the breadth and scope of these laws, and they exclude self-insured plans. The Court’s ruling makes it so that insurers have to negotiate their plans early if they want to be reimbursed, which will hopefully ensure that you aren’t drained of your settlement just when you thought your fight was over. For further information on your legal rights, call our office.