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Equitable Subrogation Dispute Sent To Florida Supreme Court

Last week, an appellate court asked the Florida Supreme Court to review its decision that Allstate and their policyholder who was found responsible in an underlying personal injury action have the right to seek payment from a group of medical care providers who allegedly made the man's auto injuries worse. The Brevard County case involved an accident in which Benjamin Edward Hintz was riding a scooter and was struck by a car driven by Emily Boozer, whose father owned the car and was an Allstate policyholder. That led to a lawsuit in which the Boozers were found liable for nearly $11.2 million, with Allstate paying its policy limit of $1.1 million.

After Allstate and Boozer hit Holmes Regional Medical Center, Dr. Basil Theodotou, Dr. David Packey and Neurology Clinic P.A. with a subrogation suit, the defendants argued that Boozer should be required to pay her full judgment before she's allowed to file a complaint against them. Boozer argued that a defendant in a personal injury case right to equitable subrogation starts when a victim has been fully paid or judgment is entered against the them. Equitable subrogation is when one pays a debt owed by another under circumstances that in fairness entitles the payor to the security or obligation held by the creditor. The trial court dismissed the suit, and Boozer appealed. In reversing the trial court's ruling, two out of three judges on the panel agreed that Allstate and Emily Boozer had not paid the entirety of their $11 million judgment to the family of Benjamin Edward Hintz for head injuries he sustained from an accident with Boozer, and could seek equitable subrogation from Hintz's medical providers. In its decision, the panel leaned heavily on the language from a prior Florida Supreme Court Case holding that equitable subrogation was a law "founded on the proposition of doing justice without regard to form." As Appellate Judge Jay P. Cohen wrote in the majority opinion, ""By definition, equity favors justice and fairness over formalistic rules. Appellee's ask us to do the opposite of equity: follow a rigid rule and disregard what seems logical and just." The panel said it was undisputed that Boozer cannot pay the judgment and Allstate has already paid its policy limit, but it should have the opportunity to equitable subrogation because it has potentially paid more than its fair share.

Source: http://www.law360.com/articles/683313/equitable-subrogation-dispute-sent-to-fla-supreme-court


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