TX Asbestos Plaintiffs’ Law Firms Sued for $19.5M

Medical Health Insurers Allege Intentional Failure To Honor Their Subrogation Rights In “Secretive” Bankruptcy Trust Recoveries.

Aetna Inc., United Healthcare Services, Inc., and Humana, Inc. (“insurers”) brought suit against six Texas law firms who represent asbestos plaintiffs in Texas Federal Court seeking reimbursement of $19.5M for medical expenses paid by the insurers for the law firms’ clients that had received settlement funds from asbestos bankruptcy trusts. The complaint asserts that the health plans offered or administered by the insurers provide them with a contractual right to reimbursement and/or subrogation in an amount equal to the amounts the insurers paid to cover asbestos-related medical expenses if their plan participants recover money from tortfeasors, including asbestos bankruptcy trusts.

The complaint asserts that the claim procedures of the asbestos bankruptcy trusts make recovery efforts difficult because the amount of a health plan participant’s recovery from a bankruptcy trust is unknown. Despite the “secretive nature” of the process, the insurers assert that they have identified several hundred asbestos plan members who received asbestos medical expense reimbursement from their health plans and these participants secured recovery of approximately $19.5M from bankruptcy trusts employing one of the six law firms named as defendants.

The complaint asserts that the law firms were aware of the subrogation and reimbursement rights of the health plan participants yet they collected their attorneys fees and distributed funds to the participants without regard to the rights of the insurers, unjustly enriching both the law firms and their clients.

The insurers seek equitable relief in the form of restitution of the amounts that they paid for treatment of participants’ asbestos-related injuries. The insurers also seek the imposition of a constructive trust over a portion of the total asbestos recovery made by each asbestos claimant in an amount necessary to fully reimburse the insurers for such payments. Further, the insurers seek the imposition of an equitable lien to enforce the reimbursement and subrogation terms of the plans for which they provide insurance or claims administration services.  The insurers also seek reimbursement and/or subrogation of those amounts through the “basic principles of equity.”

The defendant law firms are Brent W. Coon, PC, Reaud Morgan & Quinn, LLP, The Bogdan Law Firm, Foster & Sear, LLP, Hissey Kientz, LLP and Shrader & Associates, LLP. Humana, Inc. et al v. Coon et al, number 3:16-CV-00240, U.S.D.C., Southern District of Texas.

Leave a Reply