LAW OFFICE OF STEVEN J BRUZONSKY
917 E. SAN ANGELO AVE.
GILBERT, AZ 85234
480-969-3003 • Fax: 1-866-295-6635
“ER 1.15 Compliance Considering Recent FEHBA and Medicare Advantage Appellate Decisions”
February 6, 2015
Annual Liens Seminar 2015
Arizona Association For Justice/
Arizona Trial Lawyers Association
ARIZONA ANTI-SUBROGATION CASELAW:
[The following applies to all liens provided there is no federal preemption and/or no Arizona statutory provision which invalidate Arizona anti-subrogation caselaw.]
The common law rule long followed in Arizona is that, absent a statute, an assignment of a cause of action for personal injuries against a third party tortfeasor is void and unenforceable.
Harleysville Mutual Ins. Co. v. Lea, 2 Ariz. App. 538, 542, 410 P.2d 495, 499 (1966) (Auto medical payments, Pensylvania insurance policy. The Arizona non-assignability rule "has much support in public policy.")
State Farm Fire and Casualty Co. v. Knapp, 107 Ariz. 184, 185, 484 P.2d 180, 181 (1971) (Auto medical payments. Subrogation is prohibited under Arizona common law.).
Allstate Ins. Co. v. Druke, 118 Ariz. 301, 304, 576 P.2d 489, 492 (1978) (Auto medical payments. "Whatever the form, whatever the label, whatever the theory, the result is the same. The policies create an interest in any recovery against a third party for bodily injury. Such an arrangement, if made or contracted for prior to settlement or judgment, is the legal equivalent of an assignment and therefore unenforceable.")
Gallego v. Strickland, 121 Ariz. 160, 589 P.2d 34 (App. 1978) (Uninsured motorist claim, prior to statutory amendment providing for uninsured motorist subrogation);
Hall v. Olague, 119 Ariz. 73, 75 n.2, 579 P.2d 577, 579 n.2 (App. 1978) ("In Arizona recompensation from the tort recovery by means of subrogation or refund of benefits is not permissible.").
ARIZONA ANTI-SUBROGATION CASELAW
Brockman v. Metropolitan Life Ins. Co., 125 Ariz. 246, 248, 609 P.2d 61, 63 (1980) (New York group health insurance policy that had a reimbursement agreement between insurer and insured was void as against Arizona public policy.).
Karp v. Speizer, 132 Ariz. 599, 601, 647 P.2d 1197, 1199 (App. 1982) (Assignment to judgement creditor by judgement debtor of proceeds expected to be recovered from personal injury action."We feel and therefore hold, that the better reasoned rule is that even though a cause of action for personal injury may survive, an action still may not be assignable either in whole or in part prior to judgment.").
Talley v. Industrial Commission of Arizona, 137 Ariz. 343, 670 P.2d 741, 744 (App. 1983)
(Subrogation for worker’s compensation is a statutory “limited exception” to the anti-subrogation rule. "Ordinarily, under Arizona law, an insurance company may not be assigned an injured insured's claim or [be] subrogated to the proceeds of such a claim.").
American and Foreign Ins. Co. v. Allstate Ins. Co., 139 Ariz. 223, 226, 677 P.2d 1331, 1334 (App. 1983) (The "subrogation or assignment of a personal injury claim is void in Arizona.").
State Farm Mut. Auto. Ins. Co. v. Janssen, 154 Ariz. 386, 395, 742 P.2d 1372, 1381 (App. 1987) ("The common law of Arizona has held that subrogation or assignment of a personal injury claim is void.").
Preferred Risk Mut. Ins. Co. v. Vargas, 157 Ariz. 17, 19, 754 P.2d 346, 348 (App. 1988) (Involving an Iowa insurance policy. "The Arizona Supreme Court has held that subrogation to another's rights in a personal injury claim amounts to assignment of the claim and is therefore void.").
Lo Piano v. Hunter, 173 Ariz. 172, 175, 840 P.2d 1037, 1040 (App. 1992) (Local school district health trust fund, prior to A.R.S. §12-962 establishing liens for local school districts. "The rule prohibiting assignment of a personal injury claim has been applied by the Arizona courts without exception in a variety of contexts.").
Lingel v. Olbin, 198 Ariz. 249, 252, 8 P.3d 1163, 1166 (App. 2000) ("It is well established in Arizona . . . that, absent statutory authorization, an assignment of a cause of action for personal injuries against a third-party tortfeasor is void and unenforceable.").
Premium Cigars International, Ltd. v. Farmer-Butler-Leavitt Ins. Agency,208 Ariz. 557, 564, 96 P.3d 555, 563 (App. 2004) ("Personal-injury . . . claims are not assignable.").
Smith v. Arizona Long Term Care System,207 Ariz. 217, 222, 84 P.3d 482, 487 (App. 2004) (Personal injury settlement insurance proceeds cannot be "sold or assigned.").