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Wolters v. American Republic Insurance Company6/27/2003
Rockingham
Argued: May 14, 2003
The defendant, American Republic Insurance Company, appeals a decision of the Superior Court (Coffey, J.) granting summary judgment to the plaintiff, Diana Wolters, on her declaratory judgment claim. We affirm.
The relevant facts are as follows. On January 16, 1997, the plaintiff was injured in an automobile accident. She incurred approximately $77,392 in medical expenses. The plaintiff was insured by the defendant under a group health insurance policy, which covered her medical expenses. She sued the driver of the other vehicle and the defendant did not intervene. In March 2001, the plaintiff settled her claim for $625,000.
On March 16, 2001, after settlement, the defendant notified the plaintiff that it had placed a lien upon her settlement proceeds. It is undisputed that the plaintiff's insurance contract with the defendant contains no clause providing for reimbursement or subrogation lien rights to the defendant for the payment of medical expenses. The plaintiff filed a declaratory judgment action in superior court to determine the parties' rights. Both sides filed motions for summary judgment as to whether the defendant is entitled to reimbursement from or equitable subrogation of the plaintiff's settlement proceeds.
The court granted the plaintiff's motion for summary judgment, ruling that, absent an express contractual or statutory provision, the defendant has no right to equitable reimbursement or subrogation of the plaintiff's settlement proceeds. This appeal followed.
"Summary judgment is an appropriate means of avoiding the expense and time of a full trial, and thus the trial court must grant summary judgment when it finds no genuine issue of material fact, after considering the affidavits and other evidence presented in a light most favorable to the non-moving party, and when the moving party is entitled to a judgment as a matter of law." Hudon v. City of Manchester, 141 N.H. 420, 423 (1996) (brackets, citations and quotations omitted). We review the trial court's application of the law to facts de novo. Morse v. Goduti, 146 N.H. 697, 698 (2001).
The sole issue on appeal is whether a health insurance carrier has an equitable right to reimbursement or subrogation of its insured's settlement proceeds for medical expenses paid under a policy that contains no reimbursement or subrogation clause.
The doctrine of subrogation has its origins in equity. See Dimick v. Lewis, 127 N.H. 141, 145 (1985). A party's right to subrogation can arise either by contract, statute, or common law or equitable principles. Moulton v. Groveton Papers Co., 114 N.H. 505, 510 (1974); see also 16 L. Russ & T. Segalla, Couch on Insurance 3d ยง 222:6, at 222-27 (2000).
The doctrine of subrogation presupposes the payment of a debt by a party secondarily liable therefor, who thereby acquires an equitable right to be reimbursed by the principal debtor and for the purpose of making this right effective is invested with all the rights which the creditor had against him (the principal debtor).
DeLellis v. Burke, 134 N.H. 607, 611 (1991) (quotation omitted). The purpose behind subrogation "is to place the responsibility where it ultimately should rest by compelling payment by the one who in good conscience ought to pay it." Security Fence Co. v. Association, 101 N.H. 190, 192 (1957) (quotation omitted). "It also prevents the insured from recouping a windfall double recovery." Cunningham v. Metropolitan Life Ins. Co., 360 N.W.2d 33, 36 (Wis. 1985). "In any subrogation case, the burden of proving entitlement is on subrogee, which generally includes proof of: he existence
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