Frisenda v. Floyd et al
Filing
53
MEMORANDUM OPINION AND ORDER GRANTING DEFENDANTS MOTION FOR PARTIAL SUMMARY JUDGMENT DKT. NO. 19 . Signed by Senior Judge Irene M. Keeley on 4/5/18. (jss)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
DAWN FRISENDA,
Plaintiff,
v.
//
CIVIL ACTION NO. 1:17CV89
(Judge Keeley)
LINDSEY FLOYD and STATE FARM
MUTUAL AUTOMOBILE INSURANCE COMPANY,
Defendants.
MEMORANDUM OPINION AND ORDER GRANTING DEFENDANT’S
MOTION FOR PARTIAL SUMMARY JUDGMENT [DKT. NO. 19]
The defendant, State Farm Mutual Automobile Insurance Company
(“State Farm”), has filed a Motion for Partial Summary Judgment,
presenting the question whether West Virginia law requires that it
pay a pro rata share of the attorney’s fees and costs incurred by
the plaintiff, Dawn Frisenda (“Frisenda”), when State Farm applies
the non-duplication of benefits provision applicable to Frisenda’s
underinsured motorist (“UIM”) coverage. Concluding that State Farm
is under no such obligation, the Court GRANTS the motion for
partial summary judgment (Dkt. No. 19).
I. FACTUAL AND PROCEDURAL BACKGROUND
The Court recites the facts based on the parties’ undisputed
submissions,
and
views
them
in
the
light
most
favorable
to
Frisenda, the non-moving party. Providence Square Assocs., LLC v.
G.D.F., Inc., 211 F.3d 846, 850 (4th Cir. 2000). On March 20, 2015,
Frisenda
was
involved
in
an
automobile
collision
with
the
FRISENDA V. FLOYD
1:17CV89
MEMORANDUM OPINION AND ORDER GRANTING DEFENDANT’S
MOTION FOR PARTIAL SUMMARY JUDGMENT [DKT. NO. 19]
defendant, Lindsey Floyd (“Floyd”). Frisenda alleges that Floyd
crossed the center line and struck the driver’s side of Frisenda’s
vehicle (Dkt. No. 1-1 at 2). At the time of the accident, State
Farm’s policy with Frisenda provided $100,000 of UIM coverage and
$25,000 of medical payments coverage (“MPC”). Floyd’s policy with
Westfield Insurance Co. (“Westfield”) provided $50,000 in liability
coverage.
Frisenda’s
policy
contained
provisions
regarding
reimbursement, subrogation, and non-duplication of benefits. State
Farm retained the right to recover certain payments, as follows:
12.
Our Right to Recover Payments
Death, Dismemberment and Loss of Sight Coverage and
Loss of Earning Coverage payments are not
recoverable by us. Under all other coverages, the
following apply:
a.
Subrogation
If we are obligated under this policy to make
payment to or for a person who has a legal
right to collect from another party, then we
will be subrogated to that right to the extent
of our payment.
The person to or for whom we make payment must
help us recover our payments by:
(1)
(2)
doing nothing to impair that legal right;
executing any documents we may need to
assert that legal right; and
2
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1:17CV89
MEMORANDUM OPINION AND ORDER GRANTING DEFENDANT’S
MOTION FOR PARTIAL SUMMARY JUDGMENT [DKT. NO. 19]
(3)
b.
taking
legal
action
through
representatives when we ask; and
our
Reimbursement
If we make payment under this policy and the
person to or for whom we make payment recovers
or has recovered from another party, then that
person must:
(1)
(2)
hold in trust for us the proceeds of any
recovery; and
reimburse us to the extent of our
payment.
(Dkt. No. 19-3 at 40). In addition, the policy provided for the
non-duplication of UIM benefits:
The most we will pay for all damages resulting from
bodily injury to any one insured injured in any one
accident, including all damages sustained by other
insureds as a result of that bodily injury is the lesser
of:
1.
the limit shown under “Each Person”; or
2.
the amount of all damages
bodily injury, reduced by:
resulting
from
that
. . .
c.
any damages that have already been paid or
that are payable as expenses under Medical
Payments Coverage of this policy, the medical
payments coverage of any other policy, or
other similar vehicle insurance.
Id. at 25.
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FRISENDA V. FLOYD
1:17CV89
MEMORANDUM OPINION AND ORDER GRANTING DEFENDANT’S
MOTION FOR PARTIAL SUMMARY JUDGMENT [DKT. NO. 19]
With the assistance of counsel, Frisenda settled her claim for
Floyd’s $50,000 policy limits. On July 7, 2016, Frisenda advised
State Farm of her settlement with Westfield, which was contingent
on State Farm’s consent, waiver of subrogation, and full release of
Floyd. Frisenda also reiterated that she had incurred $34,809.27 in
medical expenses, and demanded that State Farm pay her the full
$100,000 UIM coverage available under her policy (Dkt. No. 33-1).
On August 8, 2016, State Farm responded that it would settle
Frisenda’s UIM claim for $5,707, but failed to address the pending
settlement
with
Westfield
(Dkt.
No.
33-2).
Following
further
inquiry, on August 30, 2016, State Farm consented to the settlement
with Westfield and waived its right to subrogation (Dkt. Nos. 33-3;
33-4).
On September 20, 2016, State Farm indicated that, after taking
into account the non-duplication of damages paid as expenses under
MPC, it had determined the amount of the proposed settlement as
follows:
•
•
•
•
•
Medical Bills
Future Medical
Lost Wages
General Damages
Future General Damages
$36,716.06
$13,216.00
$1,537.17
$17,000.00
$2,000.00
•
•
Non Duplication Offsets
Other Insurance
-$14,761.61 for MPC
-$50,000.00
4
FRISENDA V. FLOYD
1:17CV89
MEMORANDUM OPINION AND ORDER GRANTING DEFENDANT’S
MOTION FOR PARTIAL SUMMARY JUDGMENT [DKT. NO. 19]
(Dkt.
No.
33-7).
Frisenda
asserts
that
after
she
provided
supplemental records and bills State Farm increased its settlement
offer to $7,000. Frisenda then advised State Farm that her lost
earning capacity was approximately $174,312, and again demanded
that State Farm tender the full $100,000 of available UIM coverage.
Rather
than
do
so,
State
Farm
instead
requested
additional
information regarding the permanency of Frisenda’s injuries (Dkt.
No. 1-1 at 3-4).
On March 15, 2017, Frisenda filed this action in the Circuit
Court of Marion County, West Virginia, against Floyd and State Farm
(Dkt. No. 1-1). In addition to her negligence claim against Floyd,
Frisenda alleged claims of breach of contract, breach of duty of
good faith and fair dealing, and violations of the West Virginia
Unfair Trade Practices Act against State Farm. Id. at 5-14. She
specifically alleged that “State Farm failed to reduce its medical
payment reimbursement amount by its pro rata share of attorney’s
fees and costs pursuant to Federal Kemper Insurance Company v.
Arnold, 183 W. Va. 31, 393 S.E.2d 669 (1990)” (Dkt. No. 1-1 at 4).
State Farm timely removed the case to this Court and filed its
answer on May 16, 2017 (Dkt. Nos. 1; 3). In relevant part, State
Farm “denie[d] that it sought reimbursement of medical payments
coverage, but affirmatively state[d] and allege[d] that it applied
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FRISENDA V. FLOYD
1:17CV89
MEMORANDUM OPINION AND ORDER GRANTING DEFENDANT’S
MOTION FOR PARTIAL SUMMARY JUDGMENT [DKT. NO. 19]
non-duplication of medical payments coverage pursuant to State Farm
Mutual Automobile Insurance Company v. Schatken, 737 S.E.2d 229 (W.
Va. 2012)” (Dkt. No. 3 at 5). Following a scheduling conference on
July 28, 2017, the Court set a briefing schedule regarding whether
State Farm is required to pay a pro rata share of Frisenda’s
attorney’s fees and costs when it applies its policy’s nonduplication provision (Dkt. Nos. 8; 9). On August 2, 2017, State
Farm advised Frisenda that it was waiving the subrogation of
medical payments (Dkt. No. 33-8).
In
its
motion
for
partial
summary
judgment,
State
Farm
contends that neither West Virginia law nor the language of the
policy at issue requires that it pay attorney’s fees and costs when
applying the non-duplication of benefits provision to prevent a
double recovery of Frisenda’s damages (Dkt. No. 19). State Farm
argues that, although it must share in fees and costs when seeking
reimbursement, non-duplication is distinct from reimbursement (Dkt.
No. 20 at 5-9). In response, Frisenda contends that non-duplication
accomplishes the same purpose as reimbursement, and that State Farm
therefore must pay its fair share of the cost Frisenda incurred to
create the $50,000 “common fund” from Westfield (Dkt. No. 33 at 1117).
6
FRISENDA V. FLOYD
1:17CV89
MEMORANDUM OPINION AND ORDER GRANTING DEFENDANT’S
MOTION FOR PARTIAL SUMMARY JUDGMENT [DKT. NO. 19]
II. STANDARD OF REVIEW
Summary
documents,
judgment
is
electronically
appropriate
stored
where
the
information,
“depositions,
affidavits
or
declarations, stipulations (including those made for purposes of
the motion only), admissions, interrogatory answers, or other
materials” establish that “there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a matter of
law.” Fed. R. Civ. P. 56(a), (c)(1)(A). When ruling on a motion for
summary judgment, the Court reviews all the evidence “in the light
most favorable” to the nonmoving party. Providence, 211 F.3d at
850. The Court must avoid weighing the evidence or determining its
truth and limit its inquiry solely to a determination of whether
genuine issues of triable fact exist. Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 249 (1986).
The moving party bears the initial burden of informing the
Court of the basis for the motion and of establishing that there
are no genuine issues of fact. Celotex Corp. v. Catrett, 477 U.S.
317, 323 (1986). Once the moving party has made the necessary
showing, the non-moving party “must set forth specific facts
showing that there is a genuine issue for trial.” Anderson, 477
U.S. at 256 (internal quotation marks and citation omitted). The
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1:17CV89
MEMORANDUM OPINION AND ORDER GRANTING DEFENDANT’S
MOTION FOR PARTIAL SUMMARY JUDGMENT [DKT. NO. 19]
“mere existence of a scintilla of evidence” favoring the non-moving
party will not prevent the entry of summary judgment; the evidence
must be such that a rational trier of fact could reasonably find
for the nonmoving party. Id. at 248–52.
III. APPLICABLE LAW
As a threshold matter, the Court must distinguish among
reimbursement, subrogation, and non-duplication under West Virginia
law. Generally speaking, subrogation and reimbursement relate to
the
distribution
of
recoveries
against
a
wrongdoer
or
the
wrongdoer’s liability carrier, while non-duplication prevents an
insured from receiving a double recovery of damages. See State Farm
Mut. Auto. Ins. Co. v. Schatken, 737 S.E.2d 229 (W. Va. 2012).
A.
Subrogation and Reimbursement
An insurer may seek subrogation from a third-party wrongdoer
of sums that the insurer has already paid to its insured but for
which the wrongdoer is liable to the insured. See Richards v.
Allstate Ins. Co., 455 S.E.2d 803, 805 (W. Va. 1995). “A provision
in an insurance policy providing for the subrogation of the insurer
to the rights of the insured to the extent medical payments are
advanced to such insured . . . is not invalid as against the public
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MEMORANDUM OPINION AND ORDER GRANTING DEFENDANT’S
MOTION FOR PARTIAL SUMMARY JUDGMENT [DKT. NO. 19]
policy of [West Virginia].” Id. at Syl. Pt. 1 (quoting Syl.,
Travelers Indem. Co. v. Rader, 166 S.E.2d 157 (1969)).
In addition, an insurer may provide for reimbursement of
medical payments from an insured who recovers from the wrongdoer:
[I]n the absence of a conflict of interest with its
insured, when an insurance policy (a) allows an insurance
company to seek “reimbursement” of medical expense
payments to an insured out of any recovery obtained by
the insured from a third party; (b) the insured obtains
a recovery from a third party that duplicates the
insurance company's medical expense payments to the
insured; and (c) when the insurance company is also the
liability insurer of the third party, then the insurance
company may seek reimbursement of those medical expense
payments from the insured.
Syl. Pt. 3, Ferrell v. Nationwide Mut. Ins. Co., 617 S.E.2d 790,
795-96 (W. Va. 2005).
Exercising a contractual right to reimbursement, however,
comes at an equitable cost. Courts in West Virginia have authority
to impose attorneys’ fees and costs on a common fund:
Except in rare instances, the power of a court to require
one party to contribute to the fees of counsel of another
must be confined to cases where the plaintiff, suing in
behalf of himself and others of the same class, discovers
or creates a fund which enures to the benefit of all.
Syl. Pt. 1, Sec. Nat’l Bank & Trust Co. v. Willim, 180 S.E.2d 46
(W.
Va.
1971)
(quoting
Syl.
Pt.
2,
Roach
v.
Wallins
Creek
Collieries Co., 160 S.E. 860 (W. Va. 1931)). The equitable commonfund doctrine recognizes “that someone ‘who recovers a common fund
9
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1:17CV89
MEMORANDUM OPINION AND ORDER GRANTING DEFENDANT’S
MOTION FOR PARTIAL SUMMARY JUDGMENT [DKT. NO. 19]
for the benefit of persons other than himself’ is due ‘a reasonable
attorney’s fee from the fund as a whole.’” US Airways, Inc. v.
McCutcheon, 569 U.S. 88, 104 (2013) (quoting Boeing Co. v. Van
Gemert, 444 U.S. 472, 478 (1980)). “State courts . . . routinely
use the common-fund rule to allocate the costs of third-party
recoveries between insurers and beneficiaries.” Id. at 104 & n.8.
Therefore, when an insured retains her own attorney to recover
funds from a wrongdoer, she often creates a “common fund” that
enures to the benefit of her insurer. Id.
The Supreme Court of Appeals recognized this application of
the common-fund doctrine in Federal Kemper Insurance Co. v. Arnold,
where it reasoned that “reimbursement of payments . . . should
reflect the [routine] cost to the covered person of obtaining a
recovery against the person at fault.” 393 S.E.2d 669, 671 (W. Va.
1990). An insurer cannot “sit back and permit its insured to
proceed with an action, expecting to share in the avails of that
proceeding without the burden of any of the expense.” Id. (quoting
Klacik v. Kovacs, 268 A.2d 305, 308 (N.J. Super. 1970)). Therefore,
“reimbursement[s] should be reduced by the insurer’s pro rata share
of the costs to the covered person of obtaining the recovery.” Id.
at Syl. Pt. 3; see also Fauble v. Nationwide Mut. Fire Ins. Co.,
664 S.E.2d 706, 710 (W. Va. 2008).
10
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1:17CV89
MEMORANDUM OPINION AND ORDER GRANTING DEFENDANT’S
MOTION FOR PARTIAL SUMMARY JUDGMENT [DKT. NO. 19]
B.
Non-Duplication of Benefits
The Supreme Court of Appeals addressed the validity of State
Farm’s non-duplication of benefits policy provision in State Farm
Mutual Automobile Insurance Co. v. Schatken. There the Schatkens
“were injured when their vehicle was struck by a vehicle driven by
19-year-old Ida Trayter.” With State Farm’s consent, they accepted
the $25,000 coverage limits offered by the tortfeasor’s carrier,
and subsequently exhausted the $5,000 in medical payments coverage
in their State Farm policy. Schatken, 737 S.E.2d at 231. The
Schatkens’ policy also contained reimbursement and non-duplication
provisions identical to those at issue in this case. Id. at 232.
State Farm offered to settle their claim under their UIM coverage
but,
pursuant
to
the
non-duplication
provision,
reduced
the
settlement offer by both “the $25,000.00 liability limits and
$5,000.00 medical payments” the plaintiffs had already received.
Id. at 231-32.
The Schatkens argued on appeal that this reduction violated
the provision of W. Va. Code § 33-6-31(b), which requires that
“[n]o sums payable as a result of underinsured motorists’ coverage
shall be reduced by payments made under the insured’s policy or any
other policy.” Id. at 232. In addition, they argued that the
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1:17CV89
MEMORANDUM OPINION AND ORDER GRANTING DEFENDANT’S
MOTION FOR PARTIAL SUMMARY JUDGMENT [DKT. NO. 19]
application of State Farm’s non-duplication provision was “patently
unfair” because it allowed State Farm to benefit from their
recovery against the tortfeasor “without any consideration for
attorney’s
fees”
that
would
normally
be
accounted
for
under
reimbursement. Respondent’s Brief at 12-15, State Farm Mut. Auto.
Ins. Co. v. Shatken, 737 S.E.2d 229 (W. Va. 2012) (No. 11-1142),
http://www.courtswv.gov/supreme-court/calendar/2012/briefs/oct12/
11-1142respondent.pdf.
The Supreme Court of Appeals rejected this argument, reasoning
that
State
impermissible
Farm’s
non-duplication
“attempt
to
reduce
the
provision
was
not
an
monetary
extent
of
its
coverage,” but rather prevented a “double recovery of damages.”
Schatken, 737 S.E.2d at 234-35 (internal quotation omitted). In
other words, a non-duplication provision in an automobile insurance
policy prevents a double recovery rather than “erod[ing] coverage”
available to an insured, given that an insured remains entitled to
the full amount of UIM coverage if his damages meet or exceed the
policy limitations even after non-duplication is applied. Id. at
235-37. Notably, the court did not address directly the plaintiffs’
argument that non-duplication prevented them from being “made
whole” because the provision did not account for their attorney’s
fees and costs. Instead, the Supreme Court of Appeals concluded
12
FRISENDA V. FLOYD
1:17CV89
MEMORANDUM OPINION AND ORDER GRANTING DEFENDANT’S
MOTION FOR PARTIAL SUMMARY JUDGMENT [DKT. NO. 19]
that non-duplication “in no way undermines the ‘preeminent public
policy of this state . . . that the injured person be fully
compensated for his or her damages.’” Id. at 236 (emphasis in
original).1
IV. DISCUSSION
Frisenda does not dispute that, as a consequence of Schatken’s
holding, State Farm is entitled to apply its non-duplication
provision in an amount equal to the medical payments advanced to
her. Rather, she contends that it is inequitable for State Farm to
apply non-duplication without accounting for the costs she incurred
to recover $50,000 from Floyd’s liability carrier (Dkt. No. 33 at
6). Frisenda argues that State Farm’s obligation to share in her
attorney’s fees and costs with regard to amounts paid under MPC
1
State Farm argues that, because the Supreme Court of Appeals
did not address the plaintiffs’ argument regarding attorney’s fees
and costs in Schatken, it impliedly rejected the position now
posited by Frisenda (Dkt. No. 34 at 8-10). This position finds
support in several recent cases; indeed, this Court has previously
acknowledged the force of the argument. See Smith v. State Farm
Mut. Auto. Ins. Co., No. 5:12CV23, 2014 WL 2533832, at *7
(N.D.W.Va. June 4, 2014) (citing Order Denying Pls.’ Mot. for Leave
to File Am. Compl., Schatken v. State Farm Mut. Auto. Ins. Co., No.
10-C-367 (Cir. Ct. Jefferson Cty., W. Va., July 11, 2013) (denying
motion to amend on remand)). However, the question presented and
the holding in Schatken were confined to whether State Farm’s nonduplication provision violated W. Va. Code § 33-6-31(b) under State
Automobile Mutual Insurance Co. v. Youler, 396 S.E.2d 737 (W. Va.
1990). See Schatken, 737 S.E.2d at 237.
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1:17CV89
MEMORANDUM OPINION AND ORDER GRANTING DEFENDANT’S
MOTION FOR PARTIAL SUMMARY JUDGMENT [DKT. NO. 19]
should not turn on whether she obtained the policy limits from
Floyd’s
liability
carrier.
Id.
Frisenda’s
argument
is
best
illustrated by two examples that utilize the coverage available in
this case.
The first example assumes that a no-fault insured recovers
less
than
the
policy
limits
from
the
tortfeasor’s
liability
carrier, as follows:
•
•
•
•
Tortfeasor’s Liability Coverage:
No-Fault Insured’s MPC:
No-Fault Insured’s UIM Coverage:
Total Damages:
•
•
•
•
•
No-Fault MPC Advancements:
Liability Settlement:
Attorney’s Fees and Costs:
Reimbursement:
Insured’s Total Recovery:
$50,000.00
$25,000.00
$100,000.00
$40,000.00
$25,000.00
$40,000.00
-$13,333.33
-$16,666.67
$35,000.00
In this example, the insured retained counsel under a one-third
contingency fee agreement to secure the $40,000 settlement from her
tortfeasor’s liability carrier. But, in doing so, the insured never
triggers
her
UIM
coverage,
because
she
did
not
recover
the
tortfeasor’s policy limits.2 In order to be reimbursed for medical
2
The Court acknowledges that an insured actually may incur
damages in excess of the tortfeasor’s liability coverage, but be
unable to obtain policy limits from the carrier. Because, in this
case, State Farm’s UIM coverage is only triggered when its insured
obtains policy limits (Dkt. No. 19-3 at 24), the Court has not
considered that factual scenario.
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1:17CV89
MEMORANDUM OPINION AND ORDER GRANTING DEFENDANT’S
MOTION FOR PARTIAL SUMMARY JUDGMENT [DKT. NO. 19]
payments, the insurer must account for the cost that its insured
incurred to secure the common fund from the liability carrier.
Pursuant to Federal Kemper, in this example, the insurer does so by
reducing its $25,000 reimbursement by one-third to $16,666.67.
The second example assumes that the no-fault insured recovers
the policy limits from the tortfeasor’s carrier, and in fact incurs
$30,000 in damages above those policy limits:
•
•
•
•
•
•
•
•
•
•
Here,
Tortfeasor’s Liability Coverage:
No-Fault Insured’s MPC:
No-Fault Insured’s UIM Coverage:
Total Damages:
No-Fault MPC Advancements:
Liability Settlement:
Attorney’s Fees and Costs:
UIM Settlement:
Attorney’s Fees and Costs:
Insured’s Total Recovery:
the
insured
retained
counsel
$50,000.00
$25,000.00
$100,000.00
$80,000.00
$25,000.00
$50,000.00
-$16,666.67
$5,000.00
-$1,666.67
$61,666.66
pursuant
to
a
one-third
contingency fee agreement, and collected the $50,000 policy limits
from
her
tortfeasor’s
liability
carrier,
thus
triggering
the
insured’s UIM coverage for her remaining $30,000 in damages. In
reliance on the non-duplication provision of its policy, the
insurer reduces what would otherwise be a $30,000 UIM settlement by
the $25,000 already advanced under MPC, thus arriving at a UIM
settlement of $5,000. Under State Farm’s approach, the insurer does
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1:17CV89
MEMORANDUM OPINION AND ORDER GRANTING DEFENDANT’S
MOTION FOR PARTIAL SUMMARY JUDGMENT [DKT. NO. 19]
not account for attorney’s fees and costs when crediting the
$25,000.
At bottom, Frisenda argues that it is inequitable for State
Farm to apply its policy’s non-duplication provision where it could
have paid the full $30,000 in UIM coverage and recovered the MPC
advancement through reimbursement (Dkt. No. 33 at 15). To account
for this perceived inequity, Frisenda would have the Court extend
Federal Kemper to scenarios in which an insurer applies nonduplication rather than reimbursement. Frisenda cites absolutely no
authority in support of her position, and every court in West
Virginia that has considered the question has rejected Frisenda’s
argument. See Smith, No. 5:12CV23, 2014 WL 2533832; Walker v. State
Farm Mut. Auto. Ins. Co., No. 5:11cv529, 2013 WL 2949042 (S.D.W.Va.
June 14, 2013); Order Granting the Defs.’ Mot. for J. on the
Pleadings, Pinkerman v. State Farm Mut. Auto. Ins. Co., No. 13-C167 (Cir. Ct. Boone Cty., W. Va., Aug. 24, 2015); Order Denying
Pls.’ Mot. for Leave to File Am. Compl., Schatken, No. 10-C-367.
Contrary to Frisenda’s repeated assertion that non-duplication
of benefits is a “legal fiction” equivalent to reimbursement (Dkt.
No. 33 at 6, 14-15), these separate provisions in State Farm’s
policy have different meanings under West Virginia law. Smith, No.
5:12CV23, 2014 WL 2533832, at *7. Insurers may seek reimbursement
16
FRISENDA V. FLOYD
1:17CV89
MEMORANDUM OPINION AND ORDER GRANTING DEFENDANT’S
MOTION FOR PARTIAL SUMMARY JUDGMENT [DKT. NO. 19]
from an insured who recovers damages from a third-party. Ferrell,
617 S.E.2d 790, Syl. Pt. 3. When reimbursement occurs, the insurer
is expected to pay a fair share of the attorney’s fees and costs
expended that resulted in the “common fund.” See Fed. Kemper, 393
S.E.2d
669,
Syl.
Pt.
3.
Unlike
reimbursement,
however,
non-
duplication operates to prevent an insured from receiving a double
recovery from the insurer itself. See Schatken, 737 S.E.2d at 23437.
In Pinkerman v. State Farm Mutual Automobile Insurance Co.,
the Circuit Court of Boone County, West Virginia, cited with
approval reasoning of the Supreme Court of Vermont in Ovitt v.
American Home Assurance Co., 971 A.2d 662 (Vt. 2009), to explain
why non-duplication does not result in the insurer recovering from
a
common
fund
acknowledged
created
the
rule
by
that
its
insured.
insurers
In
Ovitt,
typically
must
the
court
share
in
attorney’s fees and costs when they seek reimbursement of medical
payments from a common fund. Id. at 664 (citing Guiel v. Allstate
Ins. Co., 756 A.2d 777 (Vt. 2000)). However, this same logic does
not apply to an insurer’s non-duplication of medical payments:
[P]laintiffs have not shown how their lawsuit has
conferred any benefit on Concord with respect to its
$5,000 medical payment. Concord is not, as a result of
this judgment, getting back the $5,000 it already paid
plaintiffs; instead, it is simply claiming credit against
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1:17CV89
MEMORANDUM OPINION AND ORDER GRANTING DEFENDANT’S
MOTION FOR PARTIAL SUMMARY JUDGMENT [DKT. NO. 19]
a $105,400 judgment for $5,000 already paid. Concord is
in the same position with respect to the $5,000 that it
was in after it paid plaintiffs under the medical
payments coverage provision of their insurance policy and
before this lawsuit was initiated-the $5,000 remains in
plaintiffs' possession. Absent any benefit to Concord, it
is senseless to suggest that Concord should pay
attorney's fees to plaintiffs. There are simply no
equities that favor plaintiffs' receipt of attorney's
fees from Concord.
Id. at 665; see Order Granting the Defs.’ Mot. for J. on the
Pleadings, Pinkerman, No. 13-C-167.
In this case, Frisenda’s $50,000 settlement with Westfield did
not create a common fund benefitting State Farm that would warrant
the reimbursement of attorney’s fees and costs. Frisenda retained
the full amount of her settlement with Floyd’s liability carrier,
as well as the amount paid to her by State Farm under MPC.3 Because
State Farm waived subrogation and is not seeking reimbursement
(Dkt. No. 34 at 3, 7), it did not “sit back and permit its insured
to proceed with an action, expecting to share in the avails of that
proceeding without the burden of any of the expense.” Fed. Kemper,
393 S.E.2d at 671. It will not benefit directly or indirectly from
3
Notably, MPC “is not an additional layer of underinsured
coverage,” but rather “permits the insured to gain speedy
reimbursement for medical expenses incurred as a result of a
collision without regard to the insured’s fault.” Schatken, 737
S.E.2d at 235 (quoting Ferrell, 617 S.E.2d at 796). Frisenda
realized the benefit of her MPC when she received payments toward
her medical expenses in a prompt and timely manner. See id.
18
FRISENDA V. FLOYD
1:17CV89
MEMORANDUM OPINION AND ORDER GRANTING DEFENDANT’S
MOTION FOR PARTIAL SUMMARY JUDGMENT [DKT. NO. 19]
Frisenda’s “recovery against the person at fault.” Id. Rather, by
deducting amounts paid under MPC from its UIM settlement offer,
State Farm is permissibly seeking to address only Frisenda’s
“remaining uncompensated damages.” Schatken, 737 S.E.2d at 235
(emphasis in original).4
Undoubtedly, Frisenda’s total recovery would have been greater
had State Farm sought reimbursement rather than relied on the valid
and
enforceable
non-duplication
provision
of
its
policy.
See
Schatken, 737 S.E.2d 201. But no common fund having been created,
no reason exists in equity to erase the distinction between these
provisions. Moreover, by asking the Court to treat non-duplication
as
reimbursement,
application
of
Frisenda
the
“seek[s]
to
be
relieved
non-duplication
of
benefits
from
language
the
by
attempting to accentuate the impact of the provision on [her].”
Walker, No. 5:11cv529, 2013 WL 2949042, at *6. The Court concludes
that it lacks the authority to so relieve her. See id.
4
Frisenda speculates that she would not be fully compensated
under W. Va. Code § 33-6-31(b) if the jury determines that her
damages amount to at least $75,000 because she would then owe her
attorney one-third of the $25,000 already received under MPC (Dkt.
No. 33 at 16-17). This argument is misguided. The requirement that
an injured person be fully compensated for her damages relates to
the availability of coverage, not the insured’s contingent fee
arrangement with counsel. See Schatken, 737 S.E.2d at 234-35.
19
FRISENDA V. FLOYD
1:17CV89
MEMORANDUM OPINION AND ORDER GRANTING DEFENDANT’S
MOTION FOR PARTIAL SUMMARY JUDGMENT [DKT. NO. 19]
V. CONCLUSION
For the reasons discussed, the Court GRANTS State Farm’s
Motion for Partial Summary Judgment (Dkt. No. 19), and DIRECTS the
Clerk to transmit copies of this Memorandum Opinion and Order to
counsel of record.
It is so ORDERED.
DATED: April 5, 2018.
/s/ Irene M. Keeley
IRENE M. KEELEY
UNITED STATES DISTRICT JUDGE
20
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