Lopez v. United Automobile Insurance Co.
2013 Ark. App. 246
| Ark. Ct. App. | 2013Background
- Appellant Lopez settled with Torreses insured by appellee United Automobile Insurance Company for $5,200.
- Shelter Insurance had paid Lopez $5,000 in medical benefits and sought reimbursement; Shelter’s May 24, 2011 letter stated reimbursement but did not create a lien.
- Settlement was drafted on appellee’s letterhead; it released all claims and included a broad indemnity to hold appellee and its insured harmless from liens.
- The March 21, 2012 settlement check listed Lopez, her husband, providers, Shelter, and Lopez’s attorney as payees; Lopez objected to Shelter’s inclusion.
- Trial court granted summary judgment for appellee; Lopez appeals seeking a declaration that Shelter’s co-payee status was invalid and a breach of the agreement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Shelter’s claimed subrogation lien was valid. | Lopez: no lien; Shelter never filed or sued. | United Auto: Shelter’s lien potential justified protecting its insured. | No valid Shelter lien; inclusion improper. |
| Application of the made-whole doctrine to subrogation rights. | Riley requires made whole before subrogation; no lien proven. | Settlement indemnity could preserve lien rights. | Made-whole not shown; lien not established. |
| Impact of Daves on the inclusion of Shelter as a co-payee. | Daves supports protection of insured without creating new co-payees. | Daves supports insurer’s lien enforcement. | Daves not controlling; no lien proven. |
| Whether the Settlement permitted adding Shelter as a co-payee. | Settlement did not mention Shelter; no agreement to co-payee. | Settlement contemplated other lien protection; award to co-payee allowed. | No language authorizing Shelter as co-payee; not permitted. |
| Statutory prohibition on conditioning settlement payments on a single check to injured party and insurer. | Section 23-89-207(d) bars such conditioning. | Inclusion was the least burdensome way to resolve potential liens. | Statutory prohibition supports reversal. |
Key Cases Cited
- Riley v. State Farm Mut. Auto. Ins. Co., 381 S.W.3d 840 (Ark. 2011) (subrogation lien requires made-whole before arising; letter does not constitute a lien)
- Ryder v. State Farm Mut. Auto. Ins. Co., 268 S.W.3d 298 (Ark. 2007) (made-whole doctrine applies to statutory liens)
- Daves v. Hartford Accident & Indemnity Co., 788 S.W.2d 733 (Ark. 1990) ( lien established where statutory rights exist; not controlling when no lien shown)
- Shelter Mut. Ins. Co. v. Bough, 834 S.W.2d 637 (Ark. 1992) (subrogation rights; made-whole context)
- Franklin v. Healthsource of Ark., 942 S.W.2d 837 (Ark. 1997) (made-whole related considerations for subrogation)