Court Opinion

ID: 2707392
Source: CourtListenerOpinion
Date Created: 2014-08-05 13:30:01.181098+00
Date Added: 2024-06-11T08:37:13.494644
License: Public Domain

[Cite as Lamosek v. Buss, 2013-Ohio-5842.]

                                  IN THE COURT OF APPEALS

                              ELEVENTH APPELLATE DISTRICT

                                   TRUMBULL COUNTY, OHIO

IRENE LAMOSEK, et al.,                        :      OPINION

                 Plaintiffs-Appellants,       :
                                                     CASE NO. 2013-T-0015
        - vs -                                :

AHLAM BUSS,                                   :

                 Defendant,                   :

STATE FARM INSURANCE,                         :

                 Defendant-Appellee.          :

Civil Appeal from the Trumbull County Court of Common Pleas, Case No. 2011 CV
2475.

Judgment: Affirmed.

Michael D. Rossi, Guarnieri & Secrest, P.L.L., 151 East Market Street, P.O. Box 4270,
Warren, OH 44482 (For Plaintiffs-Appellants).

Andrew C. Stebbins and Patrick J. O’Malley, Keis George, LLP, 55 Public Square,
#800, Cleveland, OH 44113 (For Defendant-Appellee).

COLLEEN MARY O’TOOLE, J.

        {¶1}     Irene and Daniel Lamosek appeal from a summary judgment rendered in

favor of State Farm Mutual Automobile Insurance Company. On November 12, 2009,

the Lamoseks were involved in an automobile accident with Ahlam Buss. At the time of

the accident, the Lamoseks were insured by State Farm. Mr. Buss was insured by
Geico General Insurance Co. The Lamoseks filed their initial complaint against Mr.

Buss on November 4, 2011.

         {¶2}   The Lamoseks’ automobile insurance policy with State Farm contained

medical payments coverage. Irene Lamosek sustained injuries in the accident which

required medical treatment. The Lamoseks submitted medical bills to State Farm which

paid to them, or on their behalf, $5,000.       Under its policy, State Farm asserted a

subrogated interest against the medical expenses portion of Irene Lamosek’s recovery.

         {¶3}   The Lamoseks filed an amended complaint on May 22, 2012, adding State

Farm as a defendant. They alleged in the amended complaint that their rights were

subject to an attorney contingent-fee representation agreement and that State Farm

was likewise subject to the agreement. The Lamoseks asserted that State Farm was

trying to avoid its subrogated responsibilities through inter-company arbitration with

Geico.

         {¶4}   The tort case between the Lamoseks and Mr. Buss settled prior to trial.

The Lamoseks and State Farm both filed motions for summary judgment regarding the

subrogation issue. The Lamoseks argued that as subrogee, State Farm was subject to

the costs of their right of recovery against Mr. Buss. The Lamoseks argued that State

Farm was required to bear the costs of recovery (33 percent) as outlined in their

contingent-fee contract, not as a matter of equity or unjust enrichment, “but of

subrogation, qua subrogation.” They argued that State Farm stands in the shoes of its

insured and is subject to the same costs of the insured.

         {¶5}   In its cross-motion for summary judgment, State Farm argued that,

regardless of the legal theory used, their subrogated recovery was not subject to the

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contingent-fee agreement. State Farm averred that Ohio law is clear that insurers are

not subject to the costs of counsel when their insured’s enter into contingency

agreements. The trial court granted State Farm’s motion for summary judgment holding

that there is “no authority to support compelling State Farm to be bound to a

contingency fee agreement that it never executed.”

      {¶6}   The Lamoseks filed a timely appeal, asserting a sole assignment of error:

      {¶7}   “On cross-motions for summary judgment, the trial court erred in entering

judgments in favor of Appellee State Farm against Appellants Lamosek.”

      {¶8}   “Summary judgment is a procedural tool that terminates litigation and thus

should be entered with circumspection. Davis v. Loopco Industries, Inc., 66 Ohio St. 3d
64, 66, * * *(1993). Summary judgment is proper where (1) there is no genuine issue of

material fact remaining to be litigated; (2) the movant is entitled to judgment as a matter

of law; and (3) it appears from the evidence that reasonable minds can come to but one

conclusion, and, viewing the evidence in the non-moving party’s favor, that conclusion

favors the movant. See e.g. Civ.R. 56(C).

      {¶9}   “When considering a motion for summary judgment, the trial court may not

weigh the evidence or select among reasonable inferences.            Dupler v. Mansfield

Journal Co., 64 Ohio St. 2d 116, 121, * * *(1980). Rather, all doubts and questions must

be resolved in the non-moving party’s favor. Murphy v. Reynoldsburg, 65 Ohio St. 3d
356, 359, * * *(1992). Hence, a trial court is required to overrule a motion for summary

judgment where conflicting evidence exists and alternative reasonable inferences can

be drawn. Pierson v. Norfork Southern Corp., 11th Dist. No. 2002-A-0061, 2003 Ohio
6682, ¶36. In short, the central issue on summary judgment is, ‘whether the evidence

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presents sufficient disagreement to require submission to a jury or whether it is so one-

sided that one party must prevail as a matter of law.’ Anderson v. Liberty Lobby, Inc.,

477 U.S. 242, 251-252, * * *(1986). On appeal, we review a trial court’s entry of

summary judgment de novo. Grafton v. Ohio Edison Co., 77 Ohio St. 3d 102, 105, 1996

* * *(1996).” (Parallel citations omitted.) Meloy v. Circle K Store, 11th Dist. Portage No.

2012-P-0158, 2013-Ohio-2837, ¶5-6.

       {¶10} The Lamoseks state that the issue in this case is whether State Farm may

enjoy its derivative right of recovery without regard for the costs to its insureds of

obtaining that recovery. The Lamoseks claim this issue is distinguishable from those

raised in Gaier v. Midwestern Group, 76 Ohio App. 3d 334, 337-339 (2d Dist.1991) and

Wiswell v. Shelby Mut. Ins. Co., 33 Ohio App. 3d 297, 300-301 (6th Dist.1986) as they

are not raising a claim in equity or of unjust enrichment.        They argue that as a

subrogated insurer, State Farm stands in the place of its insureds and has no greater

right to recovery than that of its insureds. Physicians Ins. Co. v. Univ. of Cincinnati

Hosp. Aring Neurological Inst., 146 Ohio App. 3d 685, 690 (10th Dist.2001).            The

Lamoseks maintain that State Farm must bear the same costs they did in enforcing their

right to recover against the tortfeasor.

       {¶11} While it is true that as a subrogated insurer State Farm has no greater

right to recovery than its insured, appellants’ policy provides that “if any injured person

to or for whom we have made payment recovers from any liable party, that injured

person shall hold in trust for us the proceeds of the recovery and reimburse us to the

extent of our payments * * *.” (Emphasis sic). The Lamoseks were paid a settlement by

Geico for, among other items, medical payments.           Thus, they had a contractual

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obligation to reimburse State Farm $5,000 out of their recovery from Geico.           The

obligation to reimburse State Farm was to reimburse the entire amount, regardless of

the amount of the settlement or the cost of obtaining the settlement. Gaier at 338.

      {¶12} Additionally, an insured is not entitled to deduct attorney’s fees from the

amount to which the insurer is subrogated when the insurer has preserved its right to

recover the amount paid to the insured under the medical-payments provision of the

policy. Wiswell at 298, 300-301. Here, State Farm notified Geico of its subrogation

claim prior to the settlement of the lawsuit; thus its right to subrogation was protected

regardless of the settlement between the Lamoseks and Mr. Buss. See, e.g., Peterson

v. Ohio Farmers Ins. Co., 175 Ohio St. 34 (1963); Motorists Mut. Ins. Co. v. Gerson, 113
Ohio App. 321 (9th Dist.1960).

      {¶13} For the foregoing reasons, appellants’ sole assignment of error is not well-

taken. The judgment of the Trumbull County Court of Common Pleas is affirmed. The

court finds there were reasonable grounds for this appeal.

THOMAS R. WRIGHT, J., concurs,

TIMOTHY P. CANNON, P.J., concurs in judgment only with a Concurring Opinion.

                              ______________________

TIMOTHY P. CANNON, P.J., concurring in judgment only.

      {¶14} I concur in the judgment of the majority, affirming the decision of the trial

court. I do so primarily because State Farm was joined in this action as a party and was

put in the position of having to set up and present its subrogation claim. Under certain

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circumstances, I believe it is completely appropriate to allow payment of fees to an

attorney representing an injured victim based on the amount of subrogated money

recovered, because the subrogated insurer cannot obtain rights greater than the injured

victim. When an injured victim must pay to recover the money, the subrogated insurer

should not be able to require that the injured party also pay to collect the insurer’s

money.

      {¶15} The policy at issue in this case states: “If the person to or for whom we

make payment recovers from any party liable for the bodily injury, that person shall hold

in trust for us the proceeds of the recovery, and reimburse us to the extent of our

payment.” (Emphasis added.)

      {¶16} The proceeds of the injured party’s recovery are only two-thirds of the

amount paid by the subrogated carrier. This is the extent of the payment recovered by

the insured. Therefore, because the subrogated insurer cannot get rights greater than

the injured party, the recovery should be limited to the net proceeds the injured party

was able to recover. It is insignificant that the subrogated insurer was not a party to the

contingent fee agreement. If full recovery is sought in the name of the injured party and

the recovery is achieved due to counsel’s efforts, the proceeds are the net amount paid

to the insured after payment of fees and expenses.

      {¶17} According to appellee, not only should the injured party return the entire

subrogated amount she paid someone to collect, the payment should come out of the

proceeds of money to which the injured party was otherwise entitled. If this result

occurred in all cases, it would be unjust and inequitable. According to its argument, the

subrogated insurer, whose claim is contingent on that of the injured party, should be

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able to recover 100 percent of its loss. The injured party, however, recovers only a

small fraction of his or her claim, because after payment of attorney fees and expenses

to recover all damages, there is little left.

       {¶18} In this case, it is not clear from the record that the subrogated insurer sat

on the sidelines and let the injured party do all the required work to effect recovery. In

fact, it appears that because the insurer was actually named as a party to the suit, it

was forced to obtain counsel and set up its own claim.          Therefore, any recovery

obtained by the subrogated insurer would have included whatever fees it arranged for

its own counsel. As a result, on the particular facts of this case, I would affirm the

judgment of the trial court.

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