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Wal-Mart is going to lose this one. This is 21st century America, where it is no longer required to honor your commitments. Today's professional athletes are the most public example of this.

Wal-Mart even loses if they elect to try and collect. If they decide to do nothing, it sets a precedent that they are flexible in enforcing the terms of their contracts.

Another issue is, this is the sort of thing that drives up insurance premiums for the rest of us. Wal-Mart and/or their insurance underwriter won't lose that money. That $450k will be recovered in the form of higher premiums for everyone else.

I'd much rather donate to this woman's trust fund directly. Do you have any information on how to do this?

Lee, a law professor in Georgia: "The case is even more convoluted
than you [stated]. One aspect concerns how well the Shanks' lawyer
understood all the ramifications of her legal situation. For instance, he
should have known about the subrogation clause in her medical insurance
and factored that into the Shanks' understanding of the settlement offer.
It's part of his job, although it's also certainly possible that he did
understand the situation and that the Shanks were lucky to get a
settlement at all from the defendant -- $900,000 isn't a great settlement
for someone in Debbie's plight, and it may be that the plaintiff's
evidence wasn't particularly strong. If the trust set up for her care is
truly irrevocable, Wal Mart can't get to it, and Debbie can be discharged
of any obligation to Wal Mart in bankruptcy."

Nick, an attorney in California: "Something struck me as wrong upon
reviewing the case summary: namely, that the attorney's fees and court
costs are chargeable out of a subrogation claim (meaning that Wal-Mart
would be limited to the amount paid over for the injured party's use).
Her attorney had to be aware of the subrogation claim, and unless there
was some intent to challenge the validity of the claim, Wal-Mart was
immediately entitled to at least that portion of the $417,477 reasonably
attributable to past medical expenses. I tend to blame her lawyer for
much of this situation. You do not let a client agree to a settlement
until you have explained to them exactly how much of it they will get to
keep. If you let them sign while they may be operating under a mistaken
impression as to what they will get out of the settlement, you have
failed to discharge your duties [as legal counsel]."

http://tinyurl.com/cwt5d

Lawyers familiar with employment law said that while state law generally bars a health insurance company from trying to get a piece of a settlement, self-funded health plans are allowed under federal law to recover their costs. [...]

Wal-Mart's health plan explicitly states that it gets reimbursed first out of any settlement or judgment, up to 100 percent of the total amount of the medical expenses, according to the lawsuit filed by the Administrative Committee of the Wal-Mart Stores Inc. Associates' Health and Welfare Plan. The plan also explicitly states that, "All attorney's fees and court costs are the responsibility of the participant, not the plan," the suit says.

It is pretty standard practice that if you get a settlement for injuries the insurance that paid for treatment gets its money replaced. Usually that comes out second after the lawyers' fees. The one problem I have with that scenario is that the insurance gets reimbursed on the dime of the injured person (i.e. they don't get hit by the 1/3 + costs lawyer's fees as they get reimbursed.)

An example would be that Susan gets 100K for pain/suffering/whatever. She pays out 33K plus fees (let's say another 7K) for a total of 40K, leaving her with 60K. Insurance Co. paid out 30K for medical treatment and that comes off next leaving her with 30K. She comes out with 30K after paying 40K for attorneys' fees. The insurance co. is reimbursed in full without having to spend a dime or a minute on the attorney.

I would be interested to hear the terms of the settlement. If it was for all medical treatment, then Walmart should have been paid off the top before she got a cent. If it was for future/long term care, then Walmart should lay off or provide that for her.

In a case similar to this, I pursued money for long term care from an auto insurance company after immediate medical expenses were paid by an employee health plan. But I would not settle with the auto insurance until the health insurer relinqished their potential subrogation claim on the basis of the need for long term care. Faced with taking nothing either way and potential bad publicity, their lawyers very reluctantly relented. But that came from looking ahead and keeping the money off the table and out of their reach.