The Wall Street Journal has an article today on Deborah Shank and Wal-Mart's subrogaton reach. You can find it here. I spoke and exchanged e-mails on several occasions with Vanessa Fuhrmans, the author of the article, about the Shanks. Vanessa accurately identifies and discusses the facts and legal principles involved. I discussed the Shank case when it was initially decided by the Eighth Circuit here and here. One fact I was not aware of before reading the WSJ article was that Deborah's husband recovered $300,000 from the tortfeasor as damages for his loss associated with Deborah's injuries. The article suggests that Wal-Mart did not attempt to pursue that recovery. Perhaps, in Wal-Mart's mind, not asserting a claim to Jim Shank's $300,000 was evidence of its corporate generosity. Whether the language of the plan document would allow such a claim is debatable.
Brian: What I find particularly disturbing here is what you mentioned recently about an equitable application of the make whole doctrine. It seems that the health insurer has a leg-up in being made whole before Deborah Shank does. The reason seems to be simply because the plan says so. I was under the impression this doctrine was originally intended for the human victims, not the insurance companies. The article mentioned that 1-3% of the claims are recovered through subrogation. This leads me to believe that the premium savings is 1-3%. Premiums are ridiculously expensive, but is this the way humans act to emphasize the best of what we have to offer? Those who are bothered by subrogation have a legitimate right to be so disturbed. Those who see it as complying with the document are probably heavy smokers who are mentally challenged. Don Levit
by Don Levit November 17, 2008 at 01:47 PM
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