Louisiana refers to the Made Whole Doctrine as the “Full Compensation Rule” and requires an insured to be fully compensated before an insurer/Plan may exercise its subrogation rights. Southern Farm Bureau Cas. Ins. Co. v. Sonnier, 406 So.2d 178 (La. 1981); Carter v. Bordelon, 370 So.2d 113 (La. App. 1979). Unlike a majority of states, Louisiana does place the burden of proving full compensation on the insured/Plan beneficiary, as opposed to requiring the Plan/insurer to prove it. Wallace v. Aetna Life & Cas. Ins. Co., 499 So.2d 577 (La. App. 1986).
The Louisiana Court of Appeals has indicated that the Made Whole Doctrine is considered a rule of interpretation or gap filler which becomes significant only when a contract or Plan fails to clearly address the issue. Nat’l Emp. Benefit Trust of the Associated Gen. Contractors of Am. v. Sullivan, 940 F. Supp. 956 (W.D. La. 1996); Roberts v. Richard, 743 So.2d 731 (La. App. 1999). The Louisiana Supreme Court has held that despite a subrogation clause, if the insured is less than fully compensated by tort recovery, the insurer is only partially subrogated, and the insured has complete priority in receiving payment. Sonnier, supra; Brister v. Blue Cross and Blue Shield of Fla., Inc., 562 So.2d 1040,1044 (La. Ct. App. 1990) (“What the Supreme Court held in Sonnier was that since the survivors had not been fully compensated, the subrogated insurer could not collect from the survivors the amount the insurer had paid them.”). However, in American Postal Workers Union v. Tippitt, 82 So.3d 379 (La. App. 2011), the Court of Appeals ruled that when a beneficiary/insured settles a case with knowledge of his obligation to reimburse the Plan, he cannot claim he wasn’t made whole.