[Cite as Lamosek v. Buss, 2013-Ohio-5842.]
IN THE COURT OF APPEALS
ELEVENTH APPELLATE DISTRICT
TRUMBULL COUNTY, OHIO
IRENE LAMOSEK, et al., : OPINION
Plaintiffs-Appellants, :
CASE NO. 2013-T-0015
- vs - :
AHLAM BUSS, :
Defendant, :
STATE FARM INSURANCE, :
Defendant-Appellee. :
Civil Appeal from the Trumbull County Court of Common Pleas, Case No. 2011 CV
2475.
Judgment: Affirmed.
Michael D. Rossi, Guarnieri & Secrest, P.L.L., 151 East Market Street, P.O. Box 4270,
Warren, OH 44482 (For Plaintiffs-Appellants).
Andrew C. Stebbins and Patrick J. O’Malley, Keis George, LLP, 55 Public Square,
#800, Cleveland, OH 44113 (For Defendant-Appellee).
COLLEEN MARY O’TOOLE, J.
{¶1} Irene and Daniel Lamosek appeal from a summary judgment rendered in
favor of State Farm Mutual Automobile Insurance Company. On November 12, 2009,
the Lamoseks were involved in an automobile accident with Ahlam Buss. At the time of
the accident, the Lamoseks were insured by State Farm. Mr. Buss was insured by
Geico General Insurance Co. The Lamoseks filed their initial complaint against Mr.
Buss on November 4, 2011.
{¶2} The Lamoseks’ automobile insurance policy with State Farm contained
medical payments coverage. Irene Lamosek sustained injuries in the accident which
required medical treatment. The Lamoseks submitted medical bills to State Farm which
paid to them, or on their behalf, $5,000. Under its policy, State Farm asserted a
subrogated interest against the medical expenses portion of Irene Lamosek’s recovery.
{¶3} The Lamoseks filed an amended complaint on May 22, 2012, adding State
Farm as a defendant. They alleged in the amended complaint that their rights were
subject to an attorney contingent-fee representation agreement and that State Farm
was likewise subject to the agreement. The Lamoseks asserted that State Farm was
trying to avoid its subrogated responsibilities through inter-company arbitration with
Geico.
{¶4} The tort case between the Lamoseks and Mr. Buss settled prior to trial.
The Lamoseks and State Farm both filed motions for summary judgment regarding the
subrogation issue. The Lamoseks argued that as subrogee, State Farm was subject to
the costs of their right of recovery against Mr. Buss. The Lamoseks argued that State
Farm was required to bear the costs of recovery (33 percent) as outlined in their
contingent-fee contract, not as a matter of equity or unjust enrichment, “but of
subrogation, qua subrogation.” They argued that State Farm stands in the shoes of its
insured and is subject to the same costs of the insured.
{¶5} In its cross-motion for summary judgment, State Farm argued that,
regardless of the legal theory used, their subrogated recovery was not subject to the
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contingent-fee agreement. State Farm averred that Ohio law is clear that insurers are
not subject to the costs of counsel when their insured’s enter into contingency
agreements. The trial court granted State Farm’s motion for summary judgment holding
that there is “no authority to support compelling State Farm to be bound to a
contingency fee agreement that it never executed.”
{¶6} The Lamoseks filed a timely appeal, asserting a sole assignment of error:
{¶7} “On cross-motions for summary judgment, the trial court erred in entering
judgments in favor of Appellee State Farm against Appellants Lamosek.”
{¶8} “Summary judgment is a procedural tool that terminates litigation and thus
should be entered with circumspection. Davis v. Loopco Industries, Inc., 66 Ohio St.3d
64, 66, * * *(1993). Summary judgment is proper where (1) there is no genuine issue of
material fact remaining to be litigated; (2) the movant is entitled to judgment as a matter
of law; and (3) it appears from the evidence that reasonable minds can come to but one
conclusion, and, viewing the evidence in the non-moving party’s favor, that conclusion
favors the movant. See e.g. Civ.R. 56(C).
{¶9} “When considering a motion for summary judgment, the trial court may not
weigh the evidence or select among reasonable inferences. Dupler v. Mansfield
Journal Co., 64 Ohio St.2d 116, 121, * * *(1980). Rather, all doubts and questions must
be resolved in the non-moving party’s favor. Murphy v. Reynoldsburg, 65 Ohio St.3d
356, 359, * * *(1992). Hence, a trial court is required to overrule a motion for summary
judgment where conflicting evidence exists and alternative reasonable inferences can
be drawn. Pierson v. Norfork Southern Corp., 11th Dist. No. 2002-A-0061, 2003 Ohio
6682, ¶36. In short, the central issue on summary judgment is, ‘whether the evidence
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presents sufficient disagreement to require submission to a jury or whether it is so one-
sided that one party must prevail as a matter of law.’ Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 251-252, * * *(1986). On appeal, we review a trial court’s entry of
summary judgment de novo. Grafton v. Ohio Edison Co., 77 Ohio St.3d 102, 105, 1996
* * *(1996).” (Parallel citations omitted.) Meloy v. Circle K Store, 11th Dist. Portage No.
2012-P-0158, 2013-Ohio-2837, ¶5-6.
{¶10} The Lamoseks state that the issue in this case is whether State Farm may
enjoy its derivative right of recovery without regard for the costs to its insureds of
obtaining that recovery. The Lamoseks claim this issue is distinguishable from those
raised in Gaier v. Midwestern Group, 76 Ohio App.3d 334, 337-339 (2d Dist.1991) and
Wiswell v. Shelby Mut. Ins. Co., 33 Ohio App.3d 297, 300-301 (6th Dist.1986) as they
are not raising a claim in equity or of unjust enrichment. They argue that as a
subrogated insurer, State Farm stands in the place of its insureds and has no greater
right to recovery than that of its insureds. Physicians Ins. Co. v. Univ. of Cincinnati
Hosp. Aring Neurological Inst., 146 Ohio App.3d 685, 690 (10th Dist.2001). The
Lamoseks maintain that State Farm must bear the same costs they did in enforcing their
right to recover against the tortfeasor.
{¶11} While it is true that as a subrogated insurer State Farm has no greater
right to recovery than its insured, appellants’ policy provides that “if any injured person
to or for whom we have made payment recovers from any liable party, that injured
person shall hold in trust for us the proceeds of the recovery and reimburse us to the
extent of our payments * * *.” (Emphasis sic). The Lamoseks were paid a settlement by
Geico for, among other items, medical payments. Thus, they had a contractual
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obligation to reimburse State Farm $5,000 out of their recovery from Geico. The
obligation to reimburse State Farm was to reimburse the entire amount, regardless of
the amount of the settlement or the cost of obtaining the settlement. Gaier at 338.
{¶12} Additionally, an insured is not entitled to deduct attorney’s fees from the
amount to which the insurer is subrogated when the insurer has preserved its right to
recover the amount paid to the insured under the medical-payments provision of the
policy. Wiswell at 298, 300-301. Here, State Farm notified Geico of its subrogation
claim prior to the settlement of the lawsuit; thus its right to subrogation was protected
regardless of the settlement between the Lamoseks and Mr. Buss. See, e.g., Peterson
v. Ohio Farmers Ins. Co., 175 Ohio St. 34 (1963); Motorists Mut. Ins. Co. v. Gerson, 113
Ohio App. 321 (9th Dist.1960).
{¶13} For the foregoing reasons, appellants’ sole assignment of error is not well-
taken. The judgment of the Trumbull County Court of Common Pleas is affirmed. The
court finds there were reasonable grounds for this appeal.
THOMAS R. WRIGHT, J., concurs,
TIMOTHY P. CANNON, P.J., concurs in judgment only with a Concurring Opinion.
______________________
TIMOTHY P. CANNON, P.J., concurring in judgment only.
{¶14} I concur in the judgment of the majority, affirming the decision of the trial
court. I do so primarily because State Farm was joined in this action as a party and was
put in the position of having to set up and present its subrogation claim. Under certain
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circumstances, I believe it is completely appropriate to allow payment of fees to an
attorney representing an injured victim based on the amount of subrogated money
recovered, because the subrogated insurer cannot obtain rights greater than the injured
victim. When an injured victim must pay to recover the money, the subrogated insurer
should not be able to require that the injured party also pay to collect the insurer’s
money.
{¶15} The policy at issue in this case states: “If the person to or for whom we
make payment recovers from any party liable for the bodily injury, that person shall hold
in trust for us the proceeds of the recovery, and reimburse us to the extent of our
payment.” (Emphasis added.)
{¶16} The proceeds of the injured party’s recovery are only two-thirds of the
amount paid by the subrogated carrier. This is the extent of the payment recovered by
the insured. Therefore, because the subrogated insurer cannot get rights greater than
the injured party, the recovery should be limited to the net proceeds the injured party
was able to recover. It is insignificant that the subrogated insurer was not a party to the
contingent fee agreement. If full recovery is sought in the name of the injured party and
the recovery is achieved due to counsel’s efforts, the proceeds are the net amount paid
to the insured after payment of fees and expenses.
{¶17} According to appellee, not only should the injured party return the entire
subrogated amount she paid someone to collect, the payment should come out of the
proceeds of money to which the injured party was otherwise entitled. If this result
occurred in all cases, it would be unjust and inequitable. According to its argument, the
subrogated insurer, whose claim is contingent on that of the injured party, should be
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able to recover 100 percent of its loss. The injured party, however, recovers only a
small fraction of his or her claim, because after payment of attorney fees and expenses
to recover all damages, there is little left.
{¶18} In this case, it is not clear from the record that the subrogated insurer sat
on the sidelines and let the injured party do all the required work to effect recovery. In
fact, it appears that because the insurer was actually named as a party to the suit, it
was forced to obtain counsel and set up its own claim. Therefore, any recovery
obtained by the subrogated insurer would have included whatever fees it arranged for
its own counsel. As a result, on the particular facts of this case, I would affirm the
judgment of the trial court.
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