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In re Stalter

Court of Claims of Ohio

April 20, 2016

IN RE: KYLE STALTER, KYLE STALTER, KEVIN STALTER Applicant

          Sent to S.C. Reporter 5/23/17

          DECISION

          Patrick M. McGrath Judge.

         {¶1} On November 19, 2015, a hearing was held in this matter before a magistrate of this court. On January 15, 2016, the magistrate issued a decision wherein he recommended that the Attorney General's July 28, 2015 decision be reversed and the claim be remanded for calculation of economic loss incurred by applicant, Kevin Stalter. Specifically, the magistrate determined that $20, 000.00 subrogated by Aetna should reduce the settlement amount before apportionment is done, thus making the total settlement $65, 000.00, not $85, 000.00. (Mag. Decision, Pgs. 5-6.) Additionally, the magistrate found that the settlement agreement addressed only victim, Kyle Stalter, and was not for use by victim's father, Kevin Stalter. (Mag Decision, Pg. 6.)

         {¶2} Civ.R. 53 states that: "[a] party may, within fourteen days of the filing of the decision, serve and file written objections to the magistrate's decision." The Attorney General (AG) timely filed its objections on January 29, 2016. Applicant did not file a response.

         {¶3} On February 2, 2015, applicants, Kevin and Kyle Stalter, filed a compensation application as the result of injuries sustained by Kyle Stalter during an aggravated vehicular assault on April 10, 2014. On June 2, 2015, the AG issued a finding of fact and decision determining that Kyle qualified as a victim of criminally injurious conduct, but denied an award on the basis of a settlement. The AG determined that Kevin, Kyle's father, had uncompensated out-of-pocket medical expenses, but those expenses should be covered by a collateral source, specifically Kyle's uninsured automobile settlement. Applicants filed a request for reconsideration on June 23, 2015, and, on July 28, 2015, the AG issued a final decision without any modification.

         {¶4} The AG raises two objections to the magistrate's recommendation.

         {¶5} Objection 1: AGO objects to the Magistrate's finding of fact that "the subrogated amount should be subtracted from the insurance proceeds, along with the attorney fees to arrive at the net settlement figure."

         {¶6} The AG's first objection turns on where in the collateral source and Fout-Craig calculations the $20, 000.00 amount subrogated by Aetna should be deducted. The AG argues that the subrogated amount should be subtracted from the gross collateral source reimbursement, instead of from the insurance proceeds as the magistrate recommended. Further, the AG argues that its method benefits claimants because it allows claimants to receive a higher amount of their insurance settlement as non-economic loss. With the magistrate's method, the claimants would not receive the benefit of being reimbursed for the subrogated amount.

         {¶7} Initially, the court notes that there are two methods that the Crime Victim's Program has used to handle subrogation of medical expenses. The first method derives from In re Dungey, V92-49877 (02-23-99), and is the method used by the magistrate in his recommendation. The In re Dungey method operates as follows: the applicant's attorney fees and the amount that was subrogated to applicant's health insurance are deducted from the total settlement. The second method derives from In re Kennard, V97-63444 (11-13-00) and In re Kissinger, V93-72805 (07-21-00). This method operates as follows: the applicant's net insurance settlement is calculated by deducting only the cost of attorney fees from the gross amount, and any medical bills applicant paid out of the insurance settlement, as well as any subrogation paid for medical expenses, are treated as medical expense in calculating the applicant's net collateral source availability.

         {¶8} The court agrees with the magistrate that "[a]n applicant should not be penalized by the Crime Victims Program for having to pay a portion of an automobile settlement to his health insurer in settlement of a subrogation claim, when the applicant no longer receives the benefit of his automobile insurance settlement to the extent of the amount paid in subrogation, the subrogated amount does not constitute a collateral source." (Mag. Decision, Pg. 5.) However, the court agrees with the AG that the In re Kennard and In re Kissinger method is more appropriate in this case. Using this method allows the victim to keep more of the settlement for pain and suffering, and the victim needs to incur less economic loss than he would under the In re Dungey method to receive an award. Accordingly, the Attorney General's first objection is SUSTAINED, and calculation for total economic loss sustained by the victim, Kyle, is as follows:

Gross Insurance Settlement

$100, 000.00

Attorney Fees

$15, 000.00

Net Insurance Settlement

$85, 000.00

x Fout-Craig Economic Loss Apportionment x 33%

Gross Collateral Source Offset

$28, 050.00

Gross Collateral Source Offset

$28, 050.00

-Subrogated amount (Victim's Economic Loss) -

$20, 000.00

Net Collateral Source Offset

$8, 050.00

Claimant's remaining Economic Loss
$7, 143.61[1]

-Net Collateral Source Reimbursement -

$8050.00

Net Collateral Source Offset -

$906.39[2]

         {¶9}Objection 2: AGO objects to the Magistrate's finding of fact that "the agreement only concerned (Victim) and not ...


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