[I]n the absence of a conflict of interest with its insured, when an insurance policy (a) allows an insurance company to seek "reimbursement" of medical expense payments to an insured out of any recovery obtained by the insured from a third party; (b) the insured obtains a recovery from a third party that duplicates the insurance company's medical expense payments to the insured; and (c) when the insurance company is also the liability insurer of the third party, then the insurance company may seek reimbursement of those medical expense payments from the insured. Syl. Pt. 3, Ferrell v. Nationwide Mut. Ins. Co., 217 W.Va. 243, 617 S.E.2d 790, 795–96 (2005). Exercising a contractual right to reimbursement, however, comes at an equitable cost. Courts in West Virginia have authority to impose attorneys' fees and costs on a common fund:
The circuit court granted partial summary judgment as to the non-duplication provision, denied the motion to strike, and established a new briefing schedule for the reimbursement issue. State Farm argued that the reimbursement provision had been specifically upheld in Ferrell v. Nationwide Mut. Ins. Co., 217 W.Va. 243, 617 S.E.2d 790 (2005), but alternatively argued: 1) that the provision did not constitute a “justiciable issue” in the instant action as it had not been invoked; and 2) it did not intend to invoke the reimbursement provision in this case. The circuit court found that the reimbursement provision was invoked by State Farm, creating a justiciable claim, and granted summary judgment to the Schatkens, finding that the reimbursement provision likewise violated W. Va.Code § 33–6–31(b).
However, this Court finds that those cases are not applicable to the case at hand as the defendants are not seeking reimbursement from the plaintiffs. The plaintiffs cite both Ferrell v. Nationwide Mutual Insurance Company, 617 S.E.2d 790 (W. Va. 2005), and Federal KemperInsurance Company v. Arnold, 393 S.E.2d 699 (W. Va. 1990), to support their argument that attorneys' fees and costs should be provided in this action. The West Virginia Supreme Court did not deal with this issue in Schatken although it was argued in the briefing in that action.
But the anti-subrogation rule only proscribes subrogation “in favor of an insurer against its own insured.” Syl. Pt. 2, Ferrell v. Nationwide Mut. Ins. Co., 217 W.Va. 243, 617 S.E.2d 790, 790 (2005) (emphasis added) (quoting Syl. Pt. 2, Richards v. Allstate Ins. Co., 193 W.Va. 244, 455 S.E.2d 803, 804 (1995)).
And in situations where both parties to an accident are insured by the same insurer, it sometimes eliminates the need for costly litigation to determine fault. Ferrell v. Nationwide Mut. Ins. Co. , 217 W. Va. 243, 249, 617 S.E.2d 790, 796 (2005). See also , 11 Steven Plitt, et al., Couch on Insurance § 158:2 (3d ed. 2021) ("Recovery under the medical payments clause of an automobile liability policy is completely independent of liability on the part of the insured.").
Medical payments coverage “permits the insured to gain speedy reimbursement for medical expenses incurred as a result of a collision without regard to the insured's fault.” Ferrell v. Nationwide Mut. Ins. Co., 217 W.Va. 243, 249, 617 S.E.2d 790, 796 (2005). In contrast, uninsured coverage is intended to supplement an insured's recovery from another driver in order to make the insured whole.
Horner contends that unless the insurance policy uses clear and unambiguous language reserving the right of reimbursement from proceeds of the insured's settlement with a third party, the antisubrogation rule will apply and the insurer has no recourse even if that means the insured receives a double recovery. For this proposition, Horner relies onFerrell v. Nationwide Mutual Ins. Co., 217 W. Va. 243, 247, 617 S.E.2d 790, 796 (2005). See also Richards v. Allstate Ins. Co., 193 W. Va. 244, 455 S.E.2d 803 (1995).