After nine successful years, Bowitch & Coffey is closing its doors. Starting August 1, 2021, Gary Bowitch and Dan Coffey will be practicing law in their own law firms and will continue to provide clients with the same high quality legal services in their areas of expertise. Their new contact information is:


Gary S. Bowitch

Attorney at Law

13 Willow Street

Castleton, NY 12033

Phone: 518-527-2232

Email: gbowitch@bowitchlaw.com

Bowitch Law New Website

Daniel Coffey

Coffey Law PLLC

17 Elk Street

Albany, NY 12207

Phone: 518-813-9500

Email: Dan@coffeylawny.com

Coffey Law New Website

Health Insurer’s subrogation rights not extinguished by release signed by insured

Plaintiff GHI paid approximately $71,000 in health benefits to its insured, Weaver, for injuries she suffered in an auto accident.  Weaver sued the other driver and his employer, Mid-Hudson Cable and settled her PI claim for $2 million.  At the time of the settlement, both Weaver and Mid-Hudson knew that GHI had made payments and was asserting a lien on the PI file.  Weaver’s attorney signed a settlement agreement with the other driver in which, among other things, Weaver agreed to defend and indemnify Mid-Hudson from any further claims, including any claims of health insurance lienholders.  Weaver signed a general release releasing all claims against the other driver.

No one gave GHI any money to satisfy its lien so GHI sued Mid-Hudson.  The judge granted Mid-Hudson’s motion to dismiss, concluding that the release given by Weaver prevented GHI from suing Mid-Hudson.  The appellate court reversed and reinstated GHI’s lawsuit.   Where a defendant takes a release from an insured knowing there remains a subrogation interest that has not been satisfied, the release does not prevent the carrier from bringing a subrogation lawsuit. [1]  In other words, an insured cannot extinguish a carrier’s subrogation interests by signing a release – so long as the tortfeasor (i.e., the one who caused the harm) has knowledge of the carrier’s subrogation interests.  The Court also noted that a carrier can sue its own insured if the insured settled a third-party PI claim while concealing the carrier’s subrogation interests and thus prejudicing the carrier.  This appellate court in Albany disagreed with another appellate court case which held that an insured can kill a carrier’s subrogation rights by signing a release.

The Court declined to rule as to whether Mid-Hudson had a claim for defense and indemnification from Weaver. But, it appears likely that Mid-Hudson will seek recoupment of its defense costs and any amount it is found to owe to GHI from Weaver since Weaver’s attorney signed a defense and indemnification “hold harmless” agreement which should protect Mid-Hudson from suit by a lienholder.

Bottom Line:  Wherever possible, put both your insured and the defendant/tortfeasor on notice of your subrogation interest/lien.  If your insured settles a PI claim and signs a release, thus frustrating your subrogation rights, you may be able to go after your insured.  If the defendant/tortfeasor knows about your subrogation interest/lien, your insured cannot kill your rights by signing a release.  


[1]   Group Health, Inc. as subrogee of Stephanie L. Weaver v. Mid-Hudson Cablevision, Inc., 3rd Dept No.: 504108, January 22, 2009

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