Hauptman, O'Brien, Wolf & Lathrop, P.C. v. Auto-Owners Insurance Company

Summary

The Nebraska Supreme Court held that Neb. Rev. Stat. § 44-3,128.01 does not preempt or abrogate the common fund doctrine. The court concluded that the statute, which addresses an insurer’s subrogation rights for medical payments coverage, is silent regarding attorney fees and does not restrict an attorney’s entitlement to a pro rata share of fees from the insurer’s recovery. The court affirmed the Nebraska Court of Appeals’ judgment affirming summary judgment for the law firm.

Holdings

1. Section 44-3,128.01 does not preempt or abrogate the common fund doctrine because its plain language addresses the enforceability and amount of an insurer's medical-payments subrogation right but is silent about attorney fees and does not demonstrate legislative intent to displace the common-law doctrine.
2. When an insurer holding a subrogation right does not participate in the action but accepts the benefit of the recovery, the insurer may be required to bear its proportionate share of the litigation expenses, including attorney fees, under the common fund doctrine.

Questions Presented

1. Whether Neb. Rev. Stat. § 44-3,128.01 preempts or abrogates the common fund doctrine as applied to an insurer's medical-payments subrogation interest.
2. Whether the law firm was entitled to recover a proportionate attorney fee from the insurer's subrogation recovery.

Disposition

affirmed