Labiche v. Legal Security Life Insurance
31 F.3d 350
5th Cir.
1994
Check Treatment

*1 Before GARZA, SMITH, REYNALDO G. PARKER, Circuit Judges. PER CURIAM: Legal Security Life Insurance (“Legal Co. Security”) appeals, a contractual subrogation agreement, for insureds’ $252,224.76 costs of from the Louisiana Compensation Patient’s Fund for future medical Concluding costs. that the subrogation agreement requires the apportionment of recovery costs, we affirm. I. 23, 1991, August

On Rhonda Labiche suf- fered a cardiorespiratory arrest following medical treatment from her physician, Dr. Don Lee Bradke. She sustained anoxic en- cephalopathy aas result of the arrest and has been in a coma ever since. Michael Labiche attorney retained an prosecute malpractice suit *2 351 33.23%, its share was Security’s interest gal the Of- filed with was complaint A Bradke. $99,985.71. to attorneys’ fees came of the Compen- Patient’s Management, Risk of fice the $252,224.76 from recovered Thus, of the of La.R.S. provisions Fund, the under sation Fund, Labiches the Compensation Patient’s for day, petition a same theOn 40:1299.41. Legal $99,985.71,and Securi- entitled were court the district in discovery filed was to the remainder. entitled ty was Orleans. Parish of the II. damages 3, 1992, petition a August On Tammany, St. of the Parish filed was A. of the provisions the damages under seeking matter, the Labich- preliminary aAs petition This Act. Practices Trade Unfair ap Security’s notice of Legal that es claim That same on Bradke. never served was Security filed a Legal peal was defective. in federal complaint was filed day, similar a days of the thirty appeal within notice of dismissed ultimately was but court district Its motion. 59 Fed.R.Civ.P. of its denial of the amount defect jurisdictional a Dis appealing “the it was notice stated sought. ac judgment rendered trict Court’s 3, 1993, on and entered on November tion Security an filed 28,1993, Legal March On actually judgment 4, The 1993.” November Practices Trade in the Unfair intervention of The notice November on was entered May on granted was Intervention Act suit. judgment became also stated appeal ongoing. 1993, is still 17, action 30,1993, motion when the final on November on March convened panel Thus, review obvi A medical it was denied. trial was for new in favor of 1993, Security a decision in 24, Legal and rendered the Labiches ous to 1993, 15, the Labich- judgment. The On plaintiffs. appeal the entire June tended alleging in federal action therefore defective. an es filed was notice Johnson, On F.3d Bradke. 11 against v. malpractice Bank Tex. Nat’l medical NCNB Cir.1994) (5th (noting courts malpractice case medical July where a by liberally the district construe notice approved appeals of settled was $100,000 ruling is an unmentioned appeal recovered plaintiffs the intent The court. prejudice to the is no Louisiana and there $400,000 apparent Bradke, from from $252,- Fund, party). adverse Compensation Patient’s Compensation the Patient’s from 224.76 B. of payment expenses. The Fund for question is whether central The of reimbursement $252,224.76 represents of recov the costs entitled were Labiches Security on be- Legal already paid funds Legal Secu funds. ery from settlement major medical under its Labiche half of Mrs. court erred the district rity claims that policy. recovery. cost their awarding the Labiches into deposited $252,224.76was The sum recovery costs court, the Labiches registry de we review legal issue is a law state apportion Russell, motions Security filed Legal College v. Regina Salve novo. 23, 1993, the September costs. On recovery 113 L.Ed.2d 225, 111 S.Ct. U.S. law, under which an order entered state to determine district “In order pay pro- obligated to Security decisions was to final Legal look courts federal in the nois recovery costs When there share of the state. portionate court of highest court, is the Legal Securi- it (the highest amount ruling by the of 33.23% state’s amount best Labiche, as $250,000, divid- determine court to of the federal ty duty Rhonda had state of the $752,224.76), highest court can, recovery, what total ed Pipe Gas Furthermore, Transcontinental court deter- decide.” would F.Supp. 175. Co., 953 Ins. Transportation Corp. rea- contingency fee was Line the 40% mined that Cir.1992) (footnote (5th omit recovery Therefore, total F.2d since sonable. lower so, decisions of ted). (i.e., doing cost of $752,224.76, the was weight, but given some be courts should Le- fees) $300,889.90. Since attorneys’ controlling are not highest where injured benefits to an employ spoken subject. state court has not subrogated ee is by operation of law to the Bosch, employee’s rights Commissioner Estate third-party U.S. 456, 465, 1776, 1782, tortfeasor. S.Ct. See La.Civil 18 L.Ed.2d 886 Code Ann. art. 1829 *3 “ (e); 23:1101; comment appellate La.R.S. ‘[A]n intermediate Chase state v. Dunbar, 185 So.2d 571 (La.App. ... a datum 1st ascertaining is Cir.), writ refused, 249 La. law which 573 and disregarded is not to be by a (La.1966). 187 So.2d 738 and 739 federal court unless is convinced other persuasive highest that the data court of the employer may The recover from the tort- ” state would decide otherwise.’ (ellipsis Id. only feasor to the extent of compensation original, omitted). emphasis citation and paid it has or has obliged pay, become so subrogation is opposed as to total. C. 1830; art. La.Civil Code Ann. La.R.S. Arabie, (La. Moody v. 498 23:1101. So.2d 1081 One Louisiana appel- intermediate 1986),1 the court late court explicitly fashioned a formula cited Moody for the “[wjhere proposition apportioning recovery costs subrogation under which is partial, thing court first determines the involved is a intervenor-subro- cause of action, gee’s co-ownership recovery by interest in the results.” Nicholes determining v. Helena Police Jury, Parish 604 ratio that So.2d the amount of Cir.), 1031 denied, (La.App. 1st paid writ bears to 605 recovery. the total The court (La.1992). So.2d 1378 then determines the cost obtaining of recovery applies the ratio to the total Louisiana’s intermediate courts generally cost of recovery to determine the amount for recognize Moody applies in cases of which the intervenor-subrogee responsible. partial subrogation. Courts declining ap Id. at 1085-87. portion attorneys’ fees Moody under almost invariably distinguish particular situation Legal Security argue does not in their case from a subrogation. See, strict district court applying formula, erred in Nicholes, e.g., id. at 1032 (holding that chari but that the district court should not have ty hospital’s subrogation rights statutorily apportioned at all. costs It greater invested with rights than tort victim- argues Moody was a compen- workers’ patient were intended to insure that charity sation case holding and its was limited to hospitals are full for the services they cases an employee which employer render); State, Moore v. Louisiana State jointly right own the receive University Medical Center at Shreveport, from a third-party tortfeasor. The Louisiana Cir.) (La.App. So.2d 293 3d (holding that Supreme Court has not ruled on whether granting statute state-supported hospital lien Moody is limited to the compensa- and privilege for medical provided services tion setting, so we are constrained to make did not legal create true subrogation relation an guess” “Erie on how that court would ship, hospital so was required pay pro rule. rata fees), share attorneys’ denied, writ “[wjhen Moody says that employer an (La.1992); 600 So.2d 667 Charity Hospital of pays compensation to a worker who has been Band, Louisiana v. 1392 (La.App. So.2d injured by wrongful person, Cir.1992) act of a third (same), 4th denied, writ 600 So.2d employer (La.1992); worker become co- 645 Sauseda, Miller v. property owners of a right Cir.1992) consisting (La.App. of a 3d (holding that con right to tractual recover per reimbursement superseded from third clause obligation subrogee son.” Id. at as pro to pay 1085. The Moody did not rata share of legal expenses), denied, explain how it writ reached the conclusion that (La.1993). employer employee and the are co-own ers of the cause action the tortfea Furthermore, this court affirmed the dis- sor, but it long has recognized been under trict court’s apportionment litigation ex- Louisiana law that an employer pays who penses in the context of a Superseded by part, 23:1103(C) (eff. statute in 1, 1990). see La.R.S. Jan. language holding upon itly its in Southern subrogation conventional clause. reimbursement Chabert, F.2d Transp. Co. Pacific no policy contains insurance Labiches’ However, is not Cir.1992). Chabert (5th clause. reimbursement such appeal here, issue as controlling with complied stop does McLain whether discussion Our application say: whether on to Moody rather McLain there. went appropriate. language Moody was is bolstered conclusion Our Supreme Court Louisiana by the used D. Insur Casualty Bureau Farm Southern agree general Sonnier, exception 406 So.2d 178 A notable Company ance *4 subroga partial subroga Moody applies partial involving (La.1981), that ment a case Bd., 599 Sonnier, Sch. Parish the v. Caddo payments. is McLain medical tion tion of denied, 605 Cir.), subrogor writ 2d (La.App. the stated that court supreme So.2d that held (La.1992). subrogation, McLain in subrogee, a the So.2d and right to re a co-ownership of independent substantive enjoys no “an there each subrogation against the the language of may be exercised the right which cover under case, in Thus, not co-owners involved are policy the provision debtor.” subroga generally right. property implied same and the co-ownership of the in not result does tion McLain, 879. at So.2d right. property same mis- is upon Sonnier reliance McLain’s num- for a unpersuasive Moody, McLain did Sonnier, find predated We which placed. distinguish- First, is McLain subrogated partially of reasons. a ber whether address which on language policy the the are co-owners able its insured insurer and ato holding. tortfeasor; In addition based its court the the against of action cause clause, contract the subrogation the rights between preferential conventional with dealt clause a reimbursement contains Sonnier subrogor. What McLain in the subrogee and and subrogor the provides: that, although the held was this against payment rights a we make their may exercise subrogee B. If pay- subrogor for whom who to or a person independently, the policy and tortfeasor the from damages an- may his exercise only part made recovers ment is been has prefer- the debt in other, person shall: balance right for the Sonnier, at 406 So.2d proceeds subrogee. the for us to the in trust ence 1. Hold recovery, and 181. the of our the extent us to 2. Reimburse con- instant inapplicable to Sonnier

payment. subrogor rights of the troversy, because rough- are provision This the “debtor” McLain, against at subrogee 599 So.2d and Miller, com- workers’ rights clause of the ly parallel the reimbursement parallels reim- and insurer “agreed or its employer plaintiffs had pensation which tortfeasor. third-party I receive ‘any amount that a against employee intervenor burse compensation medical workers’ payment person Louisiana’s a third Under from may each plan employee law, employer the extent expenses independent medical “an same termed paid me for could be already what have have Miller, may at exercised be which right expenses’.” substantive suit appen- files employer court If an of lower the debtor.” against decision (reprinting employ- party tortfeasor dix). a against third employee injuries before ment-related the insurer held that Miller a may still maintain suit, employee right to files aof not co-owners were insured need separate action the rela- because expenses, recover pending suit. employer’s in the a intervene premised them “was tionship between Serv., 381 Truck Big Moose Roche from the Oilfield of reimbursement right contractual dismissed, 449 U.S. (La.), appeal against via rather than plaintiffs 54, 66 L.Ed.2d 808, 101 S.Ct. explic- McLain Id. at 831. defendant.” Louisiana s workers law also recognize We that the of predicting task provides that compromise “[n]o with such the final course be by supreme taken person third by employer either the or the aof ais difficult one. The Erie injured employee dependent or his shall be guesses made under circumstances such as binding upon rights or affect the of the oth- presented in this many case are wrong. times ers unless assented to him.” LA.R.S. We have no assurance that predictions employer’s 23:1103. And if an employ- we today make will ultimately fare better rights ee’s are not completely independent forays the notable similar diversity into under Louisiana’s jurisdiction that have missed the mark. We law, subrogor’s neither a are and subrogee’s conclude, however, that the district court cor- rights as independent implies. as Sonnier rectly applied For formula to example, Farr, in Audubon Ins. Co. v. case. (La.1984), We So.2d 232 therefore judgment. AFFIRM the the court held that a subrogor could subrogee’s release the claims REYNALDO GARZA, Judge, G. Circuit third party thereby bar suit Concurring subrogee Specially; against the third party. Sonni- simply er does not address whether a cause I concur in opinion prepared in the of action is co-owned *5 Moody. above case. I specially write because I argues McLain also that Louisiana courts would preferred have certify to question have resisted efforts to extend Moody be- of Louisiana law that we decide today to the yond the workers setting. We Supreme Court of I Louisiana. was unable argument find this particularly unpersuasive get my co-panelists one certify in the context partial light simple question of whether the formula of the fact that the two cases McLain cites Moody Arabie, cited in opinion, applied proposition, this Moore, Band and as- types other of insurance other work sume that a subrogee normally liable for a men’s compensation. Personally, I think pro rata share legal expenses but distin- that it should and that is the my reason for guish special charity case hospitals. concurrence. McLain, at 879. We therefore conclude Moody applies eases of subrogation. The ratio given nale in Moody for creating system of apportionment is that both a worker in jured by a party third tortfeasor and an UNITED America, STATES of employer obligated pay workers’ compen Plaintiff-Appellee, sation have a property right to recover dam ages from the Moody, defendant. at 1084-85. As are co-owners Carlos Rafael (93-1987); HERNANDEZ property right, appor must be Eugenio (93-2015), Nunez-Muro tioned between them. Defendants-Appellants. Such is also the case where an insured 93-1987, Nos. 93-2015. contractually surrogates his claim to in- surer. prevent intended to United States Court Appeals, an intervenor insurance company from “free Sixth Circuit. riding” on plaintiffs’ attorney by pay- Argued May 9, 1994. ing any portion of the attorneys’ fees. Moody appears Decided and to be Filed June any 1994.* special principles of Certiorari Denied Oct. law, but on principles applicable See 115 S.Ct. 285. subrogation generally. Moreover, the Loui- Supreme siana Court has given no indication that it intends to limit Moody to the workers’

compensation setting.

*This originally decision was issued “unpub- as an designated opinion as one lished decision” filed on June July 1994. On recommended for publication. full-text