Allstate Ins. Co. v. Metropolitan Dade County
| Decision Date | 02 August 1983 |
| Docket Number | No. 82-478,82-478 |
| Citation | 436 So.2d 976 |
| Parties | ALLSTATE INSURANCE COMPANY, as subrogee of Irwin Siegel, Appellant, v. METROPOLITAN DADE COUNTY, Appellee. |
| Court | Florida District Court of Appeals |
Bedford & Whitelock and Jack Whitelock, Jr., Miami, for appellant.
Robert A. Ginsburg, County Atty., and Kenneth B. Drucker and Roy Wood, Asst. County Attys., for appellee.
Before HENDRY, HUBBART and FERGUSON, JJ.
Allstate Insurance Company appeals from a final summary judgment entered in favor of appellee Metropolitan Dade County on Allstate's subrogation claim against the county. For reasons more fully developed below, we affirm the trial court's decision.
The facts need be stated only briefly. On May 3, 1975, an automobile insured by appellant was involved in an accident with a bus owned and operated by appellee. By the terms of the insurance contract, the insured's claim under his uninsured motorist benefits went to arbitration. On June 6, 1978, an award in the amount of $156,000 was entered in favor of the insured. Appellant paid that award on October 6, 1978. Under the terms of the contract, appellant was then subrogated to the rights of the insured. Appellant did not file a complaint on its subrogation claim against appellee until September 24, 1980. Under section 768.28(12), Florida Statutes (1975), an action against a governmental agency must be brought within four years of the date the statute of limitations begins to run. The only issue on appeal is whether the trial court erred in finding that in a subrogation claim, the statute of limitations begins to run on the date of the accident and that, therefore, summary judgment was appropriate since appellant did not file its complaint until after the statute of limitations period had already ended.
Appellant repeatedly characterizes this action as a "subrogated claim for indemnity". By doing so, it attempts to blur the distinction between subrogation and indemnification thus merging the two and treating all claims for reimbursement as if they were indemnity claims. These efforts are understandable: appellant seeks to take advantage of the well established principle that in indemnification actions, the statute of limitations does not begin to run until the indemnitee pays on an obligation. Employers' Fire Insurance Co. v. Continental Insurance Co., 326 So.2d 177 (Fla.1976); Castle Construction Co. v. Huttig Sash & Door Co., 425 So.2d 573 (Fla.2d DCA 1982); Fireman's Fund Insurance Co. v. Rojas, 409 So.2d 1166 (Fla.3d DCA 1982); Mims Crane Service, Inc. v. Insley Manufacturing Corp., 226 So.2d 836 (Fla.2d DCA 1969). This focus on the common set elements of both doctrines, that both involve parties seeking reimbursement for monies paid which should have been paid by another, cannot be used to shift attention away from the true distinction; that is, subrogation and indemnification are different because the rights involved are different.
In principle, there is a clear distinction between subrogation rights and indemnification rights. Subrogation is designed to afford relief when one is required to pay a legal obligation which ought to be met, either wholly or partially, by another. Underwriters at Lloyds v. City of Lauderdale Lakes, 382 So.2d 702 (Fla.1980); American Home Assurance Co. v. City of Opa Locka, 368 So.2d 416 (Fla.3d DCA 1979), and cases cited therein. Subrogation rights place a party, like appellant in this case, in the legal position of one who has been paid money because of the acts of a third party. Thus, the subrogee "stands in the shoes" of the subrogor and is entitled to all of the rights of its subrogor, Klonis v. Armstrong, 436 So.2d 213 (1983), but also suffers all of the liabilities to which the subrogor would be subject. Holyoke Mutual Insurance Co. v. Concrete Equipment, Inc., 394 So.2d 193 (Fla.3d DCA), rev. denied, 402 So.2d 609 (Fla.1981); Jones v. Bradley, 366 So.2d 1266 (Fla. 4th DCA 1979). In subrogation, the subrogee, now in the same posture as the plaintiff/subrogor, acquires all rights as against the defendant/wrongdoer and is thus able to bring an action against that party to recover the monies paid.
Indemnity, on the other hand, shifts the entire loss from one who, although without active negligence or fault, has been obligated to pay, because of some vicarious, constructive, derivative, or technical liability, to another who should bear the cost because it was the latter's wrongdoing for which the former is held liable. Houdaille Industries, Inc. v. Edwards, 374 So.2d 490 (Fla.1979). Indemnification rights derive from the relationship between a party like the appellant and the party causing the injury. Given the requisite relationship, and assuming that the party seeking indemnification was not at all responsible for the injury, the injuring party becomes liable to the payor.
Both subrogation and indemnification may be either contractual or equitable in origin. The two doctrines remain distinct when they have their source in contract. Contractual subrogation presupposes a contract between the subrogor and the subrogee; that is, between the injured and the paying parties. Contractual indemnification requires a contract between the paying party and the injuring party. In equity, however, the distinction between subrogation and indemnification may blur. A court may emphasize either or both of the doctrines "when necessary to bring about equitable adjustment of a claim founded on right and natural justice". Rebozo v. Royal Indemnity Co., 369 So.2d 644, 646 (Fla.3d DCA), cert. denied, 379 So.2d 209 (Fla.1979) (equitable subrogation). A court recognizing equitable rights may, therefore, refer to subrogation and indemnification interchangeably. See, e.g., Employers' Fire Insurance Co. v. Continental Insurance Co., 326 So.2d at 180 and n. 5. See also Klonis v. Armstrong, supra ().
The question of when a statute of limitations begins to run depends on whether the subrogation or indemnification right is equitable or contractual in nature. A contractual right to indemnification cannot vest until payment is made. As a result, the statute of limitation does not begin to run until payment is made. See cases cited supra. The same is true with equitable subrogation and indemnification. Employers' Fire Insurance Co., supra. The court may find that some occurrence has tolled the statute. Government Employees Insurance Co. v. Wheelus, 319 So.2d 181 (Fla. 4th DCA 1975). Contractual subrogation rights, however, by their terms, refer to a transfer or substitution of the rights and liabilities of the injured party to the paying party. Klonis v. Armstrong, supra; Holyoke Mutual Insurance Co., supra; Jones v. Bradley, supra. In addition, subrogation contracts frequently grant the subrogee the means of insuring that the subrogor will protect the subrogee's rights, even in advance of payment. Not surprisingly, therefore, courts have traditionally held that in contractual subrogation actions, the statute of limitations runs from the date of the injury to the original "rightsholder" and not from the date of payment by the subrogee. These traditional rules are stated in Don Reid Ford, Inc. v. Feldman, 421 So.2d 184 (Fla. 5th DCA 1982):
Where insurers have brought actions for subrogation to recover, for injuries or damage for which the insurer has paid its insured, against a third party whose alleged tortious conduct caused the injuries or damage, such insurers have frequently attempted to have applied to the subrogation actions the same time of accrual as that applied to indemnity actions, but courts generally have adhered to the view that the statute of limitations begins to run on a subrogated insurer's action against a third-party tortfeasor at the same time that the statute of limitations would begin to run on an action by the insured, or his personal representative in the event of the death of the insured, against the third-party tortfeasor. A rationale offered in support of this view has been that a subrogated insurer stands in the shoes of its insured, taking no rights other than those that the insured had, and at the same time being subject to all defenses which the...
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