Kevin Hall was injured in an auto accident in 1993 when Hall was a passenger in a car driven by Kieron Mazzola. The car was insured by Royal Insurance Company and, while registered to Kieron's parents, K. Lewis and Carole Mazzola, the car was owned by Fidelity L.S. Group, Inc.

The collision that injured Kevin occurred in New York while the car was registered and insured in New Jersey. Kevin's medical expenses totaled over $133,000. This amount was paid by Allstate, the Hall's insurer; according to New York's No-Fault Insurance Law. After being paid by Allstate, the Halls filed suit against Mazzola and Fidelity. A month after filing the suit, the case was settled out of court between the Halls, the Mazzolas, Fidelity and Royal Ins. Royal settled the suit for one million dollars, but only after getting a signed waiver of subrogation from the Halls. The waiver covered ALL CLAIMS and damages arising out of the '93 collision.

Allstate proceeded to recover the sums it paid to the Halls. Initially through arbitration and later by filing an action against the Mazzola et. al. Allstate argued that their right to subrogate damages from Mazzola and Royal was destroyed by the Halls' waiving their subrogation rights. Allstate also argued that the parties were aware that the waiver would destroy Allstate's ability to recover payments. The trial court denied Allstate's request for summary judgment on two grounds. First, their subrogation rights were terminated by the Hall's signed waiver and second, Allstate was prohibited from recovery by both the laws of New York (accident site) and New Jersey (vehicle registration and policy issuance site). Allstate appealed the decision under New York Law.

The higher court reviewed the circumstances. Acknowledging that further action would be necessary to establish whether New York or New Jersey would apply to the case. The court decided that Allstate was, per New York Law, permitted to recover payments that exceeded $50,000. Any amounts at or below $50,000 are deemed ineligible for recover under New York Law. The court also held the opinion that, after paying Hall's medical expenses; its right to subrogate already existed at the time that the Halls signed the waiver. The lower court's decision was reversed and the action remanded for trial.

Allstate Insurance Company, Plaintiff-Appellant, v. Kieron Mazzola and First Fidelity L.S. Group, Inc., Defendants-Appellees. United States Court Of Appeals For The Second Circuit No. 97-7974 Filed April 27, 1999 FindLaw: Laws: Cases and Codes: http://laws.findlaw.com/2nd/977974.html - U.S. 2nd Circuit Court of Appeals (March 9, 2000)