The Tennessee Supreme Court issued an opinion yesterday in the Abbott v. Blount County, Tennessee case.
In an opinion by now retired Justice Al Birch, the Court made it crystal clear that an insurance company could not require a plaintiff to get approval of plaintiff’s health insurance company before settling a personal injury suit. The Court said that it is "clear that the made-whole doctrine applies regardless of the language found in the insurance contract. Contract terms that require the consent of the insurer would allow the insurer to withhold consent from any settlement that does not make the insured whole and thereby compel the insured to seek a larger award at trial. We disapproved of allowing insurers to contract away the right to be made whole in York, and we do so again today. Finally, we note that the lack of an insurer’s consent does not make an insured more likely to receive a double recovery."
The Court said that there was a genuine issue of material fact about whether the plaintiffs were made whole.
The Court also said that "if Blount County had knowledge of the Abbotts’ lawsuit and settlement negotiations but did not intervene or warn the insured that Blount County’s subrogation rights could affect the Abbotts’ recovery, then Blount County will be deemed to have waived those rights. However, the facts concerning whether Blount County had notice of the lawsuit and settlement negotiations are disputed, and, thus, we affirm the Court of Appeals’ holding that summary judgment as to this issue is inappropriate."
The cite to the Abbott case is No. E2004-00637-SC-R11-CV ; it was filed on November 7, 2006. Read the opinion here.
Two points. First, note that this case is governed by state law, not ERISA. ERISA is a much different breed of cat.
Second, this opinion points out the need for the plaintiff to prove that he or she was not made whole. It is not enough to say "look how bad I am hurt" or "See how much my medical bills are." The plaintiff must introduce evidence from which the value of the case can be determined. Evidence. Real evidence. Just like you use in court. Oh, that’s right, we are talking about court.
For example, in our recent hearing on this subject, the insurer stipulated to the medical bills and records. The insurer also stipulated that the judge could draw reasonable conclusions from the records about the permanency of the injuries (to avoid the cost of taking medical depositions). We had a nurse testify about the medical treatment of each client. We used illustrations – no reason a nurse cannot testify as to the accuracy of those. We had our clients testify. The total testimony was under 90 minutes.