United States v. Greene
| Decision Date | 07 February 1967 |
| Docket Number | No. 66 C 1603.,66 C 1603. |
| Citation | 266 F. Supp. 976 |
| Parties | UNITED STATES of America, Plaintiff, v. Kilbourne H. GREENE, Defendant, v. Jackie S. O'GUIN, Third-Party Defendant. |
| Court | U.S. District Court — Northern District of Illinois |
Edward V. Hanrahan, U. S. Atty., Chicago, Ill., for plaintiff.
Querry, Harrow, Gulanick & Kennedy, Chicago, Ill., for defendant.
Third Party Defendant.
Joseph Marshall, Chicago, Ill., pro se.
No appearance for Third-Party Defendant.
This suit was brought by the United States under 42 U.S.C. § 26511 to recover from the defendant the reasonable value of medical care which the United States furnished a victim of the defendant's allegedly tortious conduct. The defendant has raised certain defenses under Illinois law which do not contest the alleged tortiousness of his conduct but which would preclude the tort victim from recovery at this time. These defenses are that the Illinois statute of limitations has run and that the tort victim has given defendant a release from all liability.
Plaintiff has moved to strike these defenses on the ground that while the preliminary question of whether defendant's conduct was tortious may be governed by state law, the United States right of recovery under section 2651 is independent of any procedural or contractual defenses which the tortfeasor might be able to assert against the tort victim under state law. In opposition to the motion to strike, the defendant argues that the United States stands in the legal "shoes" of the tort victim as subrogee of his claim and is therefore subject to all defenses available against the tort victim. The controversy over the nature of the right created in the government by section 2651 is based on the following language in the statute:
"* * * the United States shall have a right to recover from said third person the reasonable value of the care and treatment so furnished or to be furnished and shall, as to this right be subrogated to any right or claim that the injured or diseased person * * * has against such third person * * *."
Plaintiff, in support of its right of action, cites a law review article2 which concludes that section 2651 created a separate right of action in the United States which is not subject to any state law procedural defenses which might be raised against an action instituted by the tort victim. The article cited by plaintiff relies in turn on the House of Representatives Judiciary Committee report on the bill.3 In that report, the House Judiciary Committee amended the language of the bill from "the United States shall be subrogated to any right or claim that the injured or diseased person * * * has against such third person. * * *"4 to the language presently in the statute.
The House report contains a number of somewhat enigmatic statements which purport to interpret the purpose of this amendment.5 All these statements emphasize that the purpose of the amendment was to clarify an "independent" right of recovery in the United States, but none states that this independent right remained "subrogated" to the right of the victim.
An analysis of the legal concept of subrogation when coupled with the judicial history which stimulated the passage of the act convinces us that the United States does not stand solely in the shoes of the tort victim through subrogation. The right held by the United States under § 2651 is also a separate federal right which, when asserted, is not subject to procedural or contractual infirmities which might bar an action by the tort victim. However, the United States recovery may be barred by substantive defenses such as contributory negligence or lack of negligence.
"Subrogation" is a term of legal art which we assume would not be employed by the drafters of the statute unless they intended it to be construed in its normal sense. In legal context, subrogation is a derivative right held by one who, while under a legal or equitable obligation to another person, pays that person a debt owed by a third party. The right of the payor (subrogee) to seek reimbursement from the third party debtor is derived from, and generally dependent on, the existence of a right in the payee (subrogor) against the debtor.6 If the payee collects from the debtor, the payor may get a refund from the payee. If, however, the payee fails to demand satisfaction from the debtor, the payor may assert the right of the payee against the debtor. The payor (subrogee), in seeking reimbursement from the third party debtor is subject to any defenses, procedural or substantive, which the third party debtor may have had against the payee (subrogor).7 These defenses are available against the subrogee because he is merely asserting the subrogor's cause of action; he "stands in the shoes" of the subrogor.
Applying the concept of subrogation to the instant situation it is clear that the United States and the alleged tort victim, O'Guin, do not stand in a subrogee-subrogor relationship. A tort victim can only recover expenses which he has or will become liable to pay as a result of the tortious conduct. Since O'Guin was not liable to the government for the treatment he received,8 he could not recover the reasonable value of the treatment from the alleged tortfeasor. Therefore no underlying obligation between the tort victim and the alleged tortfeasor exists here to which the government could be subrogated. In the true subrogation situation, it is the subrogee's payment of this underlying obligation which gives him the right to enforce the obligation.9
The judicial history which stimulated the passage of § 2651 also clearly shows that the right created by the statute was not solely one of subrogation to the right of the tort victim. The need for a statutory right in the government to recover from a tortfeasor the reasonable value of medical treatment given a serviceman victimized by a tort was the first enunciated in United States v. Standard Oil of California, 332 U.S. 301, 67 S.Ct. 1604, 91 L.Ed. 2067 (1947). There, as here, the government sought to recover the reasonable value of medical care rendered a serviceman, a tort victim, after the serviceman had given the tortfeasor a release. The government sought to avoid the effect of the release by asserting a previously unrecognized right of recovery independent of the serviceman's cause of action. The Supreme Court characterized the government's claim as follows:
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