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Judges affirm reduction of subrogation lien

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The Indiana Court of Appeals rejected State Farm Insurance Company’s argument that its subrogation lien regarding one couple’s policy shouldn’t be reduced based on State Farm’s refusal in a policy held by another family to pay the full amount of the couple’s claim following a car accident.

Joel Genth was driving his father’s car, which was insured with a State Farm policy (Policy 2) when his car hit Thomas Young’s vehicle. Young was injured and received treatment. His medical insurance company Ingenix and his State Farm policy (Policy 1) paid for those treatments.

The Youngs sued Genth and his father for damages and listed two subrogation liens totaling $24,276.61. State Farm, on behalf of the Genths, offered to settle the Youngs’ claims for $17,432. The Youngs then filed a motion to reduce the subrogation liens pursuant to Indiana Code 34-51-2-9. They claimed they should only be responsible for 17.43 percent of the value of each subrogation lien because they were only receiving that percentage of the Genths’ $100,000 policy limit.

Policy 1 agreed to reduce the amount of its lien from $5,000 to $3,250 but not to reduce the lien to 17.43 percent of its value. The trial court ordered State Farm to accept $581 for Policy 1, which is 17.43 percent of the value of the original subrogation lien, minus its pro rata share of attorney fees and litigation expenses.

“In light of the unusual facts before us, i.e., that State Farm issued both Policy One and Policy Two, we decline to adopt State Farm Policy One’s premise that its subrogation lien should not be reduced based on State Farm Policy Two’s refusal to pay the full amount of the Youngs’ claim. The purpose of subrogation is to avoid unjust enrichment,” Judge Meliss May wrote in State Farm Insurance Company v. Thomas A. Young and Mary E. Young, Joel P. Genth and Philip K. Genth, INGENIX 92A05-1205-CT-258.

“State Farm paid under Policy One for some of the Youngs’ damages, and thus was entitled to a subrogation lien. But ‘the one primarily liable,’ Wirth, 950 N.E.2d at 1216, and who ‘in good conscience should have been’ paying, id., was State Farm under Policy Two. Therefore, to allow State Farm to recover the full value of its subrogation lien under Policy One, when State Farm did not pay the full value of Youngs’ claim under Policy Two, would unjustly enrich State Farm.”
 

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  1. Your article is a good intro the recent amendments to Fed.R.Civ.P. For a much longer - though not necessarily better -- summary, counsel might want to read THE CHIEF UMPIRE IS CHANGING THE STRIKE ZONE, which I co-authored and which was just published in the January issue of THE VERDICT (the monthly publication of the Indiana Trial Lawyers Association).

  2. Thank you, John Smith, for pointing out a needed correction. The article has been revised.

  3. The "National institute for Justice" is an agency for the Dept of Justice. That is not the law firm you are talking about in this article. The "institute for justice" is a public interest law firm. http://ij.org/ thanks for interesting article however

  4. I would like to try to find a lawyer as soon possible I've had my money stolen off of my bank card driver pressed charges and I try to get the information they need it and a Social Security board is just give me a hold up a run around for no reason and now it think it might be too late cuz its been over a year I believe and I can't get the right information they need because they keep giving me the runaroundwhat should I do about that

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