Quote of the Day - Be wary of the man who urges an action in which he himself incurs no risk.
Here's the playbill. While trying to put out a prairie fire in Nebraska started by sparks from a Union Pacific train, Dailey suffered second- and third-degree burns over a significant portion of his body. He sued UP and settled, receiving over $1.2 million, plus $10K/month for ten years. Plus, UP agreed to defend Dailey if his health insurer, Blue Cross/Blue Shield, sued to recover part of the settlement. That agreement did not necessarily mean that UP would pay more.
Larry H. Parker may not have been able to do much better.
Trouble is, BC/BS was left out in the cold. It had paid almost $800K of Dailey's doctor and hospital bills, but had not received anything as part of the settlement. So, it sued Dailey for equitable subrogation and for breach of contract.
It wanted money.
If BC/BS recovered that money from Dailey, he was out of luck. He had signed a UP settlement, releasing it from paying any more. Dailey would have to pay BC/BS out his own recovery.
But, BC/BS had a contract with Dailey that allowed it to recover the money it had spent on Dailey's care if Dailey recovered in a settlement. So, it sued both UP and Dailey. UP denied the claim, and the lower court decided that if BC/BS wasn't entitled to recover from Dailey, it wouldn't be entitled to recover from UP.
The initial decision was that BC/BS was entitled to contractual recovery, reducing Dailey's recovery by the nearly $800K it had paid for Dailey's injuries. Remember - Dailey had released UP.
The Nebraska Supreme Court didn't like that result. Well, more than half of the Court. They decided that an insurer is precluded from any recovery unless the insured has been made completely whole by the tort-feasor. In other words, the insurer can't take any money from the injured insured until he has first been fully paid for his injuries.
The root of the rationale? The court said that " these are risks of loss that the insurer is paid to bear."
Hmm. Do they mean that BC/BS has to act like an insurance company? What a surprise.