If you are handling or investigating a subrogation suit against the government, let this be another reminder of the importance of notice. A U.S. District Court Judge, sitting in Alaska, recently shot down the government’s motion to dismiss a subrogation lawsuit based upon perceived inadequacies in the notice of claim.
The subrogation case originated from a motor vehicle collision wherein a vehicle driven by an employee of the National Park Service struck the vehicle of State Farm’s insured at an intersection. In relation to the accident, State Farm issued payments to its insured driver, the driver’s husband/policyholder, and other entities. Shortly thereafter, State Farm gave notice of its claim by filing a timely Standard Form 95 (SF-95) with the National Park Service.
Standard Form 95 is used to present claims against the United States under the Federal Tort Claims Act (FTCA) for property damage, personal injury, or death allegedly caused by a federal employee’s negligence or wrongful act or omission occurring within the scope of the employee’s federal employment. These claims must be presented to the Federal agency whose employee conduct gave rise to the injury. A completed Standard Form 95 must be presented to the appropriate federal agency within two years after the claim accrues.
More than six months after filing the SF-95 and without a response from the National Park Service, State Farm filed suit.
The government moved to dismiss for lack of jurisdiction on the grounds that the SF-95 notice was inadequate because it only listed the driver as State Farm’s subrogor, and did not separately list the driver’s husband or State Farm itself as claimants. As a result, it argued, State Farm had not fully exhausted its administrative remedies and should only be able to recover the amount paid to its insured driver, a paltry $90, not the amounts that it paid to the driver’s husband or other entities, which made up the bulk of the nearly $60,000 claim.
In holding that State Farm provided the government with “more than adequate notice” of its subrogation claim, the court pointed out that the term “State Farm” appeared on the SF-95 form no less than six times, along with the specific dollar amount sought, and an explanation of the basis of the claim. The form also listed State Farm’s mailing address and stated that it was presenting a claim for the “deductible and State Farm’s interest.” Since insurers may bring suit as subrogees under the FTCA and because State Farm was a proper subrogee, both under the terms of the policy and based upon equitable principles (i.e., payment), the court explained, the damages suffered by the insureds transformed into the damages suffered by State Farm. Accordingly, “State Farm was bringing suit for damages which State Farm itself suffered.” The court ultimately held that State Farm had exhausted its administrative remedies because it presented a proper claim to the National Park Service by filing an SF-95 “as subrogee of” its insured (“State Farm a/s/o Antoinette Edenshaw”). Read the full opinion here.
The ruling demonstrates that government notice of claim forms, such as the SF-95, are not typically formatted for subrogation claimants. Given the ambiguity, subrogation notices may be the target of increased scrutiny. To protect your subrogated interest, please contact any of Cozen O’Connor’s subrogation and recovery attorneys.