## Facts

- Frank F. Frost was injured in an automobile accident involving a vehicle owned by Porter Leasing Corp. and operated by its driver.
- Frost and his wife, Rilla Frost, sued the owner and driver for personal injuries and loss of consortium.
- While the tort action was pending, Frost received medical and hospital expense benefits under a group health policy issued to a union health plan and paid for by his employer.
- Frost submitted medical expense claims totaling $26,566.04; the insurer, Union Labor Life Insurance Co., paid $22,679.57 in benefits.
- The group insurance policy contained no express provision granting the insurer subrogation or reimbursement rights from the insured’s tort recovery.
- Union Labor intervened in the tort action seeking, to the extent of its payments, a share of any recovery Frost obtained for medical expenses; it did not assert a direct claim against the tort defendants.
- The Frosts settled with the tort defendants for a lump sum of $250,000 (the defendants’ policy limits), and the tort action was dismissed as to the defendants.
- The remaining dispute was whether Union Labor could obtain equitable (implied) subrogation from the settlement proceeds despite the absence of a subrogation clause.

## Issues

1. Whether a group medical insurer has a right of subrogation in an insured’s recovery against a tortfeasor for personal injuries when the insurance policy contains no express subrogation provision.

## Decision

- The Supreme Judicial Court of Massachusetts answered the reported question in the negative and reversed the recognition of subrogation.
- The court held that, absent a contractual subrogation clause (or other controlling source of entitlement), the insurer could not share in the insured’s recovery from the tortfeasor.
- A concurring justice agreed with the result, emphasizing that any subrogation right should be disclosed in the policy so insureds have notice of a potential reduction in net recovery.

## Legal Principles

- Subrogation is an equitable doctrine that typically allows a payor to succeed to the rights of the paid party against a primary obligor, but it does not arise automatically from payment of insurance benefits.
- In Massachusetts, a medical and hospital expense insurer has no implied equitable subrogation right to an insured’s personal injury recovery when the policy lacks an express subrogation or reimbursement provision.
- Courts are reluctant to infer subrogation in personal injury settlements because lump-sum recoveries often reflect multiple damage components and do not reliably identify amounts attributable to medical expenses.
- If subrogation is intended as a cost-control mechanism in health coverage, it must be secured through clear policy language (or statute), not imposed by judicial implication.

## Conclusion

Massachusetts law does not grant a group health insurer a right to reimbursement from an insured’s tort settlement for medical expenses paid unless the insurance contract (or statute) expressly provides for subrogation.


Frost v. Porter Leasing Corp., 386 Mass. 425, 436 N.E.2d 387 (Mass. 1982)