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Green v. Innovative Recovery Services, Inc.
Citations: 42 S.W.3d 917; 2000 Tenn. App. LEXIS 514; 2000 WL 1038118Docket: M1999-02227-COA-R3-CV
Court: Court of Appeals of Tennessee; July 28, 2000; Tennessee; State Appellate Court
Original Court Document: View Document
Faye L. Green, injured in an auto accident, hired attorney Robert L. Whitaker to pursue damages against the other driver, settling for $50,000 after initially seeking $340,000. Her medical expenses, totaling $23,059, were covered by Access MedPLUS, a TennCare contractor, which sought reimbursement through its subrogation rights. Innovative Recovery Services, Inc. (IRSI) informed Whitaker that it managed subrogation for Access MedPLUS and expected reimbursement from Green's settlement without his involvement. After the settlement, Whitaker filed for a declaratory judgment to reduce the subrogation claim by one-third for attorney fees, but the trial court granted summary judgment to IRSI, citing no contractual relationship with Whitaker. On appeal, Whitaker argued that Access MedPLUS was not entitled to subrogation because Green had not been "made whole" by the settlement. IRSI countered that this argument was not presented at trial, preventing the court from considering whether the made-whole doctrine applied. The Court of Appeals affirmed the trial court's decision, emphasizing the lack of a contractual relationship as the basis for the ruling. It referenced Tenn. Code Ann. 71-5-117, which establishes the state's subrogation rights for TennCare recipients and notes that these rights are subject to reasonable attorney fees, provided the attorney is notified of the state's claim before fund disbursement. Ms. Green hired Mr. Whitaker to pursue her personal injury lawsuit, filing a complaint without notifying TennCare or IRSI of the action. Upon discovering the lawsuit, the appellee informed Mr. Whitaker that IRSI protected the State’s subrogation interest and did not wish for him to represent them. Ms. Green claims entitlement to one-third of the medical expenses paid by TennCare, arguing that IRSI's lack of intervention or support in her case against Mr. Shear justifies this claim. The legal precedent from *Travelers Insurance Co. v. Williams* emphasizes that whether an attorney can collect fees from an insurer regarding a subrogation claim depends on the existence of an express or implied contract. In *Williams*, the court found no such contract or unjust enrichment between the insurer and the insured’s attorney, noting that one cannot be unjustly enriched by unsolicited services when the provider is informed their services are not needed. Similarly, Mr. Whitaker was explicitly told that his services were not desired by the insurer, leading to the conclusion that no contractual relationship existed between him and TennCare, disallowing his claim for attorney fees. The trial court's order is affirmed, and the case is remanded to the Chancery Court of Davidson County for further proceedings, with costs taxed to the appellant, Faye L. Green.