![]() ![]() That means that the Member will pay the Administrator the amount of money recovered by him through judgment or settlement from the third person or organization up to the amount of the benefits paid or provided by the administrator. "Separate from and in addition to the Administrator's right of subrogation, if a subscriber or a member of his family recovers money from the other person or organization for any injury or condition for which benefits are provided by the administrator, the Member agrees to reimburse the Administrator from the recovered money that amount of benefits the Administrator has paid or provided. 1990).Ĭontained in the Blue Cross policy was specific language that gave Blue Cross first priority over any money that the insured collected from a third party. ![]() For a complete understanding of the issues involved in this case and our resolution of them, the reader should take note of two other cases released this day: McKleroy v. The Powells appeal the trial court's judgment that Blue Cross is entitled to recover the full $27,080.26. This reimbursement is due even though the insured is not paid in full, or made whole by any recovery from a third party." In its judgment the trial court stated that "it is conceded by all concerned that the $100,000 recovery does not make the plaintiff whole." The trial court went on, however, to hold that under the insurance contract Blue Cross was "entitled to the reimbursement of any amounts paid by it for the benefit of its insured. The trial court allowed Blue Cross to intervene, dismissed the Jollys, and ruled that Blue Cross was entitled to the full amount it had paid for Cynthia's medical expenses out of the settlement recovery. Cynthia Powell, however, settled her claim against the Jollys for the $100,000 limit of the Jollys' liability insurance policy.īlue Cross filed a motion to intervene in the lawsuit, seeking subrogation for $27,080.26 that it had paid for Cynthia's medical expenses. In an amended complaint, she alleged over $7,000,000 as damages for her injuries. Cynthia sued the driver of the other automobile involved in the accident, Joy Jolly, and its owner, Dale Jolly, alleging negligence and wantonness. Blue Cross and Blue Shield of Alabama ("Blue Cross") paid Cynthia's medical expenses of $27,080.26 under the provisions of a group health insurance policy that covered Cynthia. Cynthia Powell was permanently injured in an automobile accident. The facts in this case were stipulated by the parties. Because we hold that the right of subrogation, whether equitable or contractual, does not arise until the plaintiff/insured has been fully compensated for her loss, we reverse and remand. This appeal presents this primary issue: May the insurer/indemnitor, by contract providing for subrogation, claim reimbursement of its payment to the insured/indemnitee, out of the insured/indemnitee's recovery from the third-party tort-feasor, when the third-party recovery does not exceed the insured/indemnitee's total loss? The trial court held that the insurer/indemnitor could so contract and ordered the insured/indemnitee to reimburse the insurer/indemnitor. ![]() Blair of Lange, Simpson, Robinson & Somerville, and Walter F. Haley of Hare, Wynn, Newell & Newton, Birmingham, for appellants.ĭuncan B. ![]()
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