In its written opinion filed on July 24, 2015, the District Court of Appeal of the State of Florida Fifth District (“Appellate Court”) decided in a 2-to-1 decision that the tortfeasor involved in a motor vehicle accident and her automobile liability insurance company have a right to seek equitable subrogation from the medical providers who allegedly further injured the operator of a motor scooter involved in the accident through their medical negligence.
The operator of the motor scooter sustained serious head injuries as a result of a traffic accident involving a car. The guardian of the motor scooter operator sued the driver of the car, as well as the owner of the car, and obtained a verdict in the amount of $14,905,585.29 that was reduced by 25% to $11,179.188.98, due to the jury’s finding of the motor scooter operator’s comparative negligence. The defendants’ automobile insurance company (Allstate) paid its policy limit in the amount of $1.1 million, in partial satisfaction of the judgment. The balance of the judgment remained unpaid.
After the personal injury verdict was rendered in August 2012, but before final judgment was entered, the guardian filed a separate medical malpractice lawsuit against the allegedly negligent medical providers, seeking recovery for the same injuries involved in the motor tort lawsuit against the original defendants. The original defendants were granted leave to intervene in the subsequent medical malpractice case, claiming that they were entitled to equitable subrogation from the allegedly negligent medical providers. The defendant medical providers moved to dismiss, arguing that the defendants in the motor tort case were barred from seeking equitable subrogation because they had not paid the entirety of the plaintiff’s damages awarded in the motor tort case.
The trial court granted the defendant medical providers’ motion to dismiss with prejudice. The motor tort defendants appealed the dismissal to the Appellate Court.
The Appellate Court noted that subrogation is a legal device founded on the proposition of doing justice without regard to form, and was designed to afford relief where one is required to pay a legal obligation which ought to have been met, either wholly or partially, by another.
The Appellate Court stated, “Here, the [motor tort defendants] did not settle with [the guardian], nor were they held liable, for only their portion of liability. Rather, they were held liable for all of [the motor scooter operator’s] injuries resulting from the accident. Judgment was entered against them for over $11 million. That judgment is fully enforceable by [the guardian] and has various severe consequences for [the defendant operator of the car]. If [the defendant operator of the car] was not solely liable, then, in fairness, she ought to be able to seek subrogation from the subsequent tortfeasors. [The motor tort defendants’ insurance company] should also have the opportunity to seek equitable subrogation because it has potentially paid more than its fair share. Put simply, we agree with Appellants that the right to equitable subrogation arises when payment has been made or judgment has been entered, so long as the judgment represents the victim’s entire damages … Appellees ask us to do the opposite of equity: follow a rigid rule and disregard what seems logical and just. Surely, the injured victim deserves to be made whole … the policy goal … [to] ensure that liability is correctly apportioned and [the defendant operator of the car] is not held liable for more than her fair share—must also be considered. It is undisputed that [the defendant operator of the car] cannot pay the judgment, and Allstate has already paid its policy limits. Equity would not leave Appellants without a remedy in this situation. We believe that the appropriate way to address both of these policy concerns is to allow Appellants to seek equitable subrogation from the Medical Providers.”
The dissenter stated in a written opinion, “I agree, in principle, with the majority and join in certifying the question as one of great public importance. However, because I believe the law as it currently stands precludes an initial tortfeasor from filing an independent equitable subrogation claim against a subsequent tortfeasor until the entire debt is paid, I would affirm.”
Source Allstate Insurance Company, et al. v. Basil Theodotou, M.D., et al., Case Nos. 5D14-1291, 5D14-1352 & 5D14-1436.
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