Made Whole Doctrine

[MikeMayberry]

What is the name of your state (only U.S. law)? NJ

I have been reading some of the basics about the MWD in NJ (and other states), yet I haven't seen anything that explains the process of determining if and when the damaged party had been made whole, specifically when it comes to pain and suffering. For instance, someone slips and falls in a supermarket, and accepts a $15k settlement offer. The injured person paid $400 in medical bills, and their health insurance paid their providers $4k. If the health insurance wants to subrogate, I understand they can't get anything until the damaged party is made whole. Does that mean they take the insured to court and then a judge decides whether the insured has been made whole? Could a judge say "I determine the defendant was made whole at $13k, so he owes the insurance $2k?". Is that how it works? (I know I left out the attorney's contingency fee. I am not certain at what point that gets paid. So please recalculate if necessary, but the main point is what is the process of determining "made whole".)

 

[Zigner]

What is the name of your state (only U.S. law)? NJ

I have been reading some of the basics about the MWD in NJ (and other states), yet I haven't seen anything that explains the process of determining if and when the damaged party had been made whole, specifically when it comes to pain and suffering. For instance, someone slips and falls in a supermarket, and accepts a $15k settlement offer. The injured person paid $400 in medical bills, and their health insurance paid their providers $4k. If the health insurance wants to subrogate, I understand they can't get anything until the damaged party is made whole. Does that mean they take the insured to court and then a judge decides whether the insured has been made whole? Could a judge say "I determine the defendant was made whole at $13k, so he owes the insurance $2k?". Is that how it works? (I know I left out the attorney's contingency fee. I am not certain at what point that gets paid. So please recalculate if necessary, but the main point is what is the process of determining "made whole".)

The insurance company has a contract with the insured wherein the insured agrees to reimburse the insurance company.

Why does this come up?

 

[MikeMayberry]

The insurance company has a contract with the insured wherein the insured agrees to reimburse the insurance company.

Why does this come up?

Right, and from what I understand the MWD will supersede the contract.

 

[FlyingRon]

Right, and from what I understand the MWD will supersede the contract.

You understand wrong. The made whole doctrine says nothing of the sort. The MWD is used in the ABSENCE of a statutory or contractual provision to the contrary. It also has nothing to do with the party guaranteed to have been made whole, what it does is allow a defense to keep him from recovering from both the tortfeasor and the insurer to be made "more than whole."

If you have an actual insurance question ask it. This is not a generalized legal education site.

 

[MikeMayberry]

The excerpt below is from Georgia and relates to auto insurance, but the principals are the same. It clearly shows that you are mistaken. Just as I thought, an insurer can sue an insured, and a court will determine whether "the case was settled for its full value".


"Most automobile medical payments policies have language included in the contract that says they are entitled to reimbursement for bills they paid if you receive a settlement for those same bills. In Georgia though, there is a statute that protects consumers from having to reimburse these companies unless you settle your case for an amount that exceeds the total of all lost wages, medical bills and pain and suffering. In practice, very few medical payments insurers are dumb enough to sue their own insureds to gamble that a court will rule that the case was settled for its full value."


In fact there are multiple websites specifically saying that MWD is a defense to the insured/insurer contract, so contrary to your belief, it isn't "in ABSENCE of a statutory or contractual provision to the contrary."

Here's a good link, so you can get educated:

https://www.mwl-law.com/wp-content/uploads/2013/03/CONTRACTING-AWAY-MADE-WHOLE-NASP-FALL-06.pdf

 

[Silverplum]

The excerpt below is from Georgia and relates to auto insurance, but the principals are the same. It clearly shows that you are mistaken. Just as I thought, an insurer can sue an insured, and a court will determine whether "the case was settled for its full value".


"Most automobile medical payments policies have language included in the contract that says they are entitled to reimbursement for bills they paid if you receive a settlement for those same bills. In Georgia though, there is a statute that protects consumers from having to reimburse these companies unless you settle your case for an amount that exceeds the total of all lost wages, medical bills and pain and suffering. In practice, very few medical payments insurers are dumb enough to sue their own insureds to gamble that a court will rule that the case was settled for its full value."


In fact there are multiple websites specifically saying that MWD is a defense to the insured/insurer contract, so contrary to your belief, it isn't "in ABSENCE of a statutory or contractual provision to the contrary."

Here's a good link, so you can get educated:

https://www.mwl-law.com/wp-content/uploads/2013/03/CONTRACTING-AWAY-MADE-WHOLE-NASP-FALL-06.pdf

When did Georgia absorb New Jersey??

 

[LdiJ]

The excerpt below is from Georgia and relates to auto insurance, but the principals are the same. It clearly shows that you are mistaken. Just as I thought, an insurer can sue an insured, and a court will determine whether "the case was settled for its full value".


"Most automobile medical payments policies have language included in the contract that says they are entitled to reimbursement for bills they paid if you receive a settlement for those same bills. In Georgia though, there is a statute that protects consumers from having to reimburse these companies unless you settle your case for an amount that exceeds the total of all lost wages, medical bills and pain and suffering. In practice, very few medical payments insurers are dumb enough to sue their own insureds to gamble that a court will rule that the case was settled for its full value."


In fact there are multiple websites specifically saying that MWD is a defense to the insured/insurer contract, so contrary to your belief, it isn't "in ABSENCE of a statutory or contractual provision to the contrary."

Here's a good link, so you can get educated:

https://www.mwl-law.com/wp-content/uploads/2013/03/CONTRACTING-AWAY-MADE-WHOLE-NASP-FALL-06.pdf

You cannot assume that Georgia law is going to even be remotely similar to New Jersey law in this particular arena. If you find something similar that relates specifically to New Jersey then fine, but something from another state is not going to help you at all.

 

[Zigner]

The OP doesn't understand what his linked PDF says, nor does he even understand Georgia law on the matter. From his link:

Despite its hostility toward subrogation, Georgia law provides us with one of the few cases which helps subrogating insurers combat the Made Whole Doctrine across the country. A Plan beneficiary is presumed to be made whole if he voluntarily settles his or her case within policy limits, according to one federal district court decision. Thompson v. Fed. Express Corp., 809 F. Supp. 950, 954 (M.D. Ga. 1993).


ETA: MOST states don't have Georgia's view on the matter.