COURT REJECTS CLASS ACTION CHALLENGE TO MED-PAY SUBROGATION RIGHTS

November 16, 2020

Recently, a Federal District Magistrate Judge considered a motion to certify a class action lawsuit challenging an automobile insurer’s assertion of subrogation rights under Medical Payments (Med-Pay) Coverage and found the claims failed to satisfy commonality requirements and rejected the class certification efforts.  In Lopez v. Progressive County Mutual Ins. Co., 2020 WL 6391214 (W.D. Tex. - San Antonio, November 2, 2020), the insureds suffered injuries in an auto accident and presented claims for related expenses under their Med-Pay coverage.  Their insurer, Progressive, put the other insurer on notice of its right to recover against any settlement proceeds.  When settling their personal injury claims the insureds asked Progressive to share in the attorney fees and expenses incurred in pursuing the claim. Progressive declined and reaffirmed their claim for reimbursement.  This lawsuit followed.

The insureds challenged Progressive’s Med-Pay right to recover claiming it only applied to medical payments made to the insureds and not to the providers as they did in this case.  The insureds alleged causes of action under Texas Deceptive Trade Practices Act for violations of the Texas Insurance Code and alleging Progressive fraudulently asserted claims against their personal injury recovery.  In pursuing the class action, they sought an injunction on behalf of all individuals who had Medical Payments Coverage with Progressive.  The insureds filed a motion to certify the class and the court analyzed and ruled on that motion.

In considering the insureds’ motion, the court analyzed the four requirements for class certification – numerosity, commonality, typicality, and adequate representation.  Noting that commonality requires “the plaintiff to demonstrate that the class members have suffered the same injury,” the court observed in part that what “Progressive knew or intended will need to be evaluated with respect to each Sub41 letter sent, is affected by the unique circumstances of each claim, and will need to be determined by a file-by-file review of not only Progressive and third-party records.”  The court also noted that contributory negligence would need to be considered in evaluating individual claims.  Accordingly, the court found that because the commonality element failed the class action should not be certified and it declined to consider the other three class action requirements.