Brown v. State Farm Mutual Automobile Insurance Co.
2012 La. App. LEXIS 687
La. Ct. App.2012Background
- Keith Brown was injured in a June 30, 2008 car accident; his medical payments were covered up to $10,000 by State Farm.
- State Farm paid most medical bills submitted by Dr. Sino, with some denials due to invalid procedure codes or billing issues, explained on review forms.
- A second auto accident occurred on September 5, 2008, for which Allstate was responsible; State Farm sought reimbursement for prior payments after this conflict.
- Brown settled with Moseley and Shelter (August 18–28, 2009) for $13,000, reserving all rights against Darnell and Southern United, and explicitly addressing subrogation liens.
- State Farm later asserted a subrogation claim of $3,894.82 and accepted a reduced amount ($2,357.69) as full satisfaction of its subrogation rights.
- Brown filed suit in November 2009 alleging nonpayment of $458.18 for medical bills; the trial court granted summary judgment in State Farm’s favor.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether State Farm must pay disputed medical charges. | Brown argues State Farm failed to pay $458.18. | State Farm paid undisputed items and properly denied disputed charges for coding errors. | No; undisputed amounts were paid; disputed items were properly denied. |
| Effect of settlement on subrogation rights. | Settlement with third parties impaired State Farm’s subrogation rights. | Settlement did not defeat State Farm’s subrogation claim; full rights were reserved and accommodated. | Summary judgment proper; settlement did not preclude State Farm’s subrogation. |
| Was there a breach of the duty of good faith and fair dealing by State Farm? | State Farm acted arbitrarily in denying or delaying payment. | Insurer acted in good faith, promptly paying undisputed charges and explaining disputed ones. | No breach; insurer acted in good faith and promptly handled claims. |
Key Cases Cited
- Louisiana Bag Co., Inc. v. Audubon Indemnity Co., 999 So.2d 1104 (La. 2008) (insurer must pay undisputed amounts; disputes require justification)
- Scott v. Insurance Co. of North America, 485 So.2d 50 (La. 1986) (good faith standard depends on facts known to insurer)
- In re Clement, 46 So.3d 804 (La.App.2d Cir. 2010) (summary judgment standard and burden-shifting framework)
- Palmer v. Martinez, 50 So.3d 804 (La.App. 2d Cir. 2010) (summary judgment burden on movant and standard of review)
- Cheramie Services, Inc. v. Shell Deepwater Production, Inc., 35 So.3d 1053 (La. 2010) (summary judgment and evidentiary standards in Louisiana)
- Moody v. Arabie, 498 So.2d 1081 (La.1986) (subrogation fee considerations)