266 So. 3d 908
La. Ct. App.2018Background
- Dec. 13, 2015 collision: Shelter‑insured Katherine Burkett's vehicle hit Jessica Hall, a Farm Bureau insured; Hall was injured.
- Farm Bureau paid Hall $5,000 in medical payments and claimed subrogation to recover that amount from the tortfeasor/insurer.
- Farm Bureau notified Shelter of its subrogation interest multiple times (first notice Feb. 17, 2016) but did not intervene in Hall’s pending personal‑injury suit.
- Hall settled her personal‑injury claim with Shelter for $53,500 on Mar. 20, 2017 via a broad receipt and release that purported to release all claims, including medical payments and subrogation liens.
- Farm Bureau sued Shelter and the Burketts for reimbursement of the $5,000; the trial court granted summary judgment for defendants, dismissing Farm Bureau’s claims.
- The appellate court reversed, holding defendants had notice of Farm Bureau’s subrogation interest before the settlement and therefore the release did not extinguish Farm Bureau’s independent subrogation claim; solidarity between defendants and Hall meant Farm Bureau could pursue recovery.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a post‑notice settlement between the insured and tortfeasor/insurer releases a subrogee's subrogation claim | Farm Bureau: settlement cannot defeat its subrogation because Shelter had notice of Farm Bureau's claim before settling | Shelter: Hall's broad receipt and release discharged all claims, including Farm Bureau's subrogation | Reversed: Because Shelter had prior notice, the settlement did not extinguish Farm Bureau's independent subrogation right |
| Whether Farm Bureau was required to intervene in Hall’s suit to protect its subrogation rights | Farm Bureau: no duty to intervene; it acquired subrogation rights upon payment and provided notice | Shelter: settlement with Hall extinguished claims (implying no liability remained) | Held: No intervention required; subrogee stands in insured’s shoes and may proceed against tortfeasor where notice was given |
| Whether solidarity exists between Hall and the defendants for Farm Bureau’s claim | Farm Bureau: defendants (tortfeasor/insurer) are solidarily liable for reimbursement when they had notice | Shelter: argued release relieved liability | Held: Solidarity applies; Farm Bureau may recover from either Hall or defendants |
| Appropriateness of summary judgment | Farm Bureau: genuine issue existed because notice predated settlement; summary judgment inappropriate | Shelter: claimed no material issue because release was clear and extinguished claim | Held: Summary judgment improper; factual/legal effect of release in light of prior notice favors Farm Bureau on summary judgment review |
Key Cases Cited
- Egros v. Pempton, 606 So.2d 780 (La. 1992) (insurer paying medical payments is subrogated to insured’s claim)
- Audubon Ins. Co. v. Farr, 453 So.2d 232 (La. 1984) (settlement without notice to subrogee can discharge tortfeasor/insurer as to subrogee)
- A. Copeland Enters., Inc. v. Slidell Mem'l Hosp., 657 So.2d 1292 (La. 1995) (subrogee stands in insured’s shoes to assert insured’s rights)
- State Farm Mut. Auto. Ins. Co. v. Manuel, 608 So.2d 1065 (La. App. 3 Cir. 1992) (if tortfeasor’s insurer had notice of subrogation prior to settlement, subrogee's claim survives)
- Southern Farm Bureau Cas. Ins. Co. v. Sonnier, 406 So.2d 178 (La. 1981) (partial subrogee retains independent right to proceed against debtor)