Yukumoto v. Tawarahara.
140 Haw. 285
Haw.2017Background
- On March 20, 2014 Gregory Yukumoto was seriously injured when an SUV driven by Ruth Tawarahara struck his moped; Yukumoto incurred substantial medical expenses paid by his health insurer, HMSA.
- Yukumoto and his wife sued Tawarahara; they settled with Tawarahara (general damages only) for amounts insufficient to cover all claimed damages; GEICO underinsured benefits also paid.
- HMSA filed a Notice of Claim of Lien seeking reimbursement (≈$337k) for medical benefits it paid and intervened in the circuit-court proceedings to assert subrogation/reimbursement rights.
- The Yukumotos filed a petition under HRS § 663-10 asking the court to determine HMSA had no lien/subrogation right because HMSA could not prove duplication of medical expenses in the settlement; they also relied on HRS § 431:13-103(a)(10).
- The circuit court ruled HMSA's equitable and contractual subrogation rights were abrogated/limited by HRS §§ 663-10 and 431:13-103(a)(10), ordered release of settlement funds to the Yukumotos, and dismissed HMSA’s claims; HMSA appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a health insurer has an equitable common-law subrogation right against a third-party tortfeasor | Yukumotos: No equitable subrogation in personal/health insurance context; statute is exclusive remedy | HMSA: State Farm protects equitable subrogation rights; common-law subrogation independent of statute | Court: No — equitable subrogation does not apply to personal/health insurance claims |
| Whether HRS §§ 663-10 and 431:13-103 limit or abrogate subrogation/reimbursement rights of health insurers | Yukumotos: Statutes limit insurer to reimbursement only for duplicated special damages; statutes are exclusive | HMSA: Statutes do not abrogate contractual/common-law subrogation rights; State Farm controls | Court: Yes — legislature intended §§ 663-10 and 431:13-103 to provide the comprehensive scheme and limit subrogation/reimbursement |
| Enforceability of contractual subrogation clauses that conflict with HRS § 663-10 | Yukumotos: Contract provisions are void as against public policy/statute | HMSA: Contract grants express subrogation rights against tortfeasor | Court: Contract terms conflicting with § 663-10 are invalid; statute controls |
| Whether HMSA could pursue subrogation against Tawarahara after court’s § 663-10 determination | Yukumotos: HMSA has no separate claim against tortfeasor beyond statutory reimbursement procedure | HMSA: Statutory reimbursement and subrogation claims are independent; a ruling of no duplication would leave tortfeasor liable to HMSA | Court: HMSA has no equitable or contractual subrogation beyond what § 663-10 permits; dismissal was proper |
Key Cases Cited
- State Farm Fire & Marine Co. v. Pacific Rent-All, Inc., 978 P.2d 768 (Haw. 1999) (recognizes equitable subrogation in property/casualty context)
- St. Paul Fire & Marine Ins. Co. v. Liberty Mut. Ins. Co., 353 P.3d 991 (Haw. 2015) (discusses subrogation principles and avoidance of double recovery)
- Perreira v. Rediger, 778 A.2d 429 (N.J. 2001) (majority rule rejecting equitable subrogation for health/personal insurance absent express policy provision)
- AIG Hawai'i Ins. Co. v. Rutledge, 955 P.2d 1069 (Haw. App. 1998) (limits insurer reimbursement in personal-insurance/UM context; endorses full but not duplicative recovery)
- Sol v. AIG Hawai'i Ins. Co., 875 P.2d 921 (Haw. 1994) (statutory limits on subrogation/reimbursement prevail over conflicting contract terms)