A recent case before the California Court of Appeals, Ellis v. Mercury Ins. Co., Cal. Ct. App. (2015), dealt with a situation in which a woman was involved in an automobile accident. Following the accident, the woman, hereinafter referred to as the plaintiff, had her car insurance company, the defendant, pay for various medical expenses.
Then, after the plaintiff recovered an arbitration award as against the other driver involved in the car accident, the insurance company sought subrogation from the plaintiff to reimburse for the amount they paid out. (Car insurance policies typically include a subrogation clause, whereby if you get “paid twice” for an expense, they are entitled to be repaid the amount that they have paid out.)
The plaintiff did not tender the amount the insurance company claimed entitlement to pursuant to the subrogation, and the insurance company therefore sought a judgment from her in that amount. In response, the plaintiff filed a complaint against the insurance company, claiming breach of contract and other torts.