American Family Mut. Ins. Co. v. Dewitt
| Decision Date | 13 October 2009 |
| Docket Number | No. 08SC308.,08SC308. |
| Citation | 218 P.3d 318 |
| Parties | AMERICAN FAMILY MUTUAL INSURANCE CO., Petitioner v. Ed DeWITT and Sarah Elaine DeWitt, Respondents. |
| Court | Colorado Supreme Court |
Roger Moore, Dwight L. Pringle, Law Office of Roger Moore, Denver, CO, for Petitioner.
Craig S. Nuss, William P. Boyle, Patterson, Nuss & Seymour, P.C., Greenwood Village, CO, for Respondent.
American Family Mutual Insurance Company ("American Family") brought this action against Sarah and Ed DeWitt (collectively "DeWitts"), as subrogee of its insured, Jeffrey Henderson ("Henderson"). Henderson suffered injuries after a collision with a vehicle owned by Ed DeWitt and operated by Sarah DeWitt. Henderson brought an uninsured/under insured motorist ("UM/UIM") claim against American Family which went to arbitration and resulted in a payment from American Family to Henderson in the amount of $100,000.
As subrogee to Henderson, American Family brought this action against the DeWitts, seeking damages in the amount of $100,000. A jury trial was held and American Family was awarded $16,000 in damages. American Family appealed the ruling, arguing that its role as subrogee rendered the claim equitable in nature, thereby making the presence of a jury inappropriate. In addition, American Family contends the trial court erred in allowing its former attorney, Heather Salg ("Salg"), who represented the company during the arbitration, to testify as to her valuation of the case during the arbitration process. The court of appeals affirmed the trial court, holding the claim was legal in nature and therefore the trial court properly empaneled a jury, and holding American Family failed to properly preserve its objection related to Salg's testimony at trial.
We granted certiorari and now affirm the judgment of the court of appeals. While the act of subrogation has its roots in equity, we find that the presence of a subrogee party does not transform otherwise legal claims into claims in equity. Therefore, we hold that the utilization of a jury as fact finder in this case was proper. As for the testimony of American Family's former attorney that, during arbitration, she valued the case at $7,500, we find that American Family's objection to such testimony did not provide the trial court with an adequate opportunity to address the argument made on appeal that the evidence was inadmissible.
This case arises from a motor vehicle collision occurring on October 10, 2000, on Interstate 70 near Ward Road. Respondent Sarah DeWitt was driving a car owned by her father, Respondent Ed DeWitt, when she collided with a vehicle owned by Henderson. At the time of the collision, Henderson was insured by American Family under a policy providing up to $100,000 in UM/UIM coverage. The DeWitts' vehicle was insured by Mid-Century Insurance with a policy providing liability limits of $25,000.
After the accident, the DeWitts' insurance company, Mid-Century, offered Henderson $25,000, representing the per occurrence limit of the DeWitt liability coverage in 2003. However, American Family, Henderson's insurer, refused to authorize the payment. Instead, American Family chose to advance Henderson $25,000, the value of the Mid-American policy, in order to avoid releasing the DeWitts from liability. In exchange for the advanced proceeds, American Family accepted an assignment of Henderson's claims against the DeWitts. American Family filed this action, as subrogee to Henderson's rights, against the DeWitts to recover its payment. American Family, standing in the shoes of Henderson, asserted claims against Sarah DeWitt based on allegations of negligence and against Ed DeWitt under the Family Car Doctrine.
Henderson believed his losses exceeded $25,000 so he made a UM/UIM claim against his insurer, American Family. The claim went to arbitration, as provided for in the policy language. American Family was represented in the arbitration by Heather Salg. Neither of the DeWitts were allowed to intervene in the contractual UM/UIM arbitration between Henderson and American Family. The DeWitts were not allowed to call witnesses, make statements, engage in discovery, or cross-examine witnesses during the arbitration. The arbitrator ruled Henderson suffered noneconomic losses of $200,000 and, as a result, American Family paid Henderson $75,000, the balance of his $100,000 UM/UIM coverage limit.
American Family then amended its complaint in this case to seek recovery of the additional payment. The parties' combined Trial Management Order contained the following stipulated facts: (1) Sarah DeWitt was liable for the accident; (2) Henderson was not at fault in causing the accident. Additionally, the Trial Management Order described the damages sought as follows:
Plaintiff paid its insured in under-insured motorist benefits for the insured's pain, suffering and psychic damages in the sum of $100,000, or its policy limits. Plaintiff seeks reimbursement of $100,000 in under-insured motorist benefits from Defendants Sarah and Ed DeWitt. Plaintiff was required to make this payment pursuant to the terms of Mr. Henderson's insurance policy and the findings of an independent arbitrator triggered by a dispute between Mr. Henderson and Plaintiff over the amount of his potential recovery under his policy. Pursuant to Colorado Law, Plaintiff is entitled to 9 percent interest on this amount, from the date of loss on October 20, 2000. The statutory interest to the trial date of October 3, 2005, is in the amount of $44,679.68, jointly and severally from Defendants Sarah Elaine DeWitt and Ed DeWitt plus court costs of $488.80 and for any other relief this Court deems proper.
Prior to trial, American Family moved to strike the DeWitts' jury demand, arguing that, because Sarah DeWitt admitted negligence, the trial court "sitting in equity [should] determine the issues of restitution, reimbursement, unjust enrichment, and the family car doctrine." American Family argued that all claims in controversy sounded in equity and that there existed no issue of fact necessitating the presence of a jury. The DeWitts opposed the motion, arguing that American Family was not enforcing an equitable right, nor seeking to invoke the coercive powers of the court. Rather, the DeWitts argued, American Family was standing in the shoes of Henderson, asserting his tort claims for personal injury, which constitutes legal relief. The trial court denied American Family's motion to strike the jury "for the reasons set forth in the Response." In a bench ruling on the first day of trial, the trial court again refused to strike the jury.
As the jury trial proceeded, the DeWitts endorsed Heather Salg, who represented American Family during the arbitration proceedings, as a witness to testify about that arbitration. Counsel for American Family objected to calling Salg as a witness for the DeWitts, arguing that such testimony was not relevant, invaded the province of the jury, and that Salg was not endorsed as an expert witness. The trial court overruled the objection, and Salg, no longer representing American Family, testified on direct examination that during the prior Henderson-American Family arbitration she asked the arbitrator to award Henderson $7,500. On cross-examination, counsel for American Family inquired into Salg's rationale for asking the arbitrator for $7,500, as well as whether the $7,500 figure represented her opinion regarding the worth of the case, based on her experience as an attorney.
As the trial concluded, the jury returned a verdict in favor of American Family and against the DeWitts, jointly. The jury found Henderson incurred damages as a result of the collision, and that Sarah DeWitt's negligence caused Henderson's damages. The jury also found that Sarah DeWitt was a resident of her father's household and thus Ed DeWitt was vicariously liable via the Family Car Doctrine. The jury determined Henderson was damaged in the amount of $16,000.
American Family appealed the verdict, arguing that the trial court committed reversible error in refusing to strike the jury and that the trial court abused its discretion and committed reversible error in allowing Salg to testify over American Family's objections. The court of appeals affirmed, finding the thrust of the action was legal in nature, entitling the DeWitts to a jury. The court of appeals also determined that a relevancy objection was made, but, since the argument on appeal stemmed from an unfair prejudice analysis, the issue was not properly preserved. The court of appeals held that a relevancy objection did not sufficiently encompass unfair prejudice concerns and therefore a separate and distinct objection was required.
American Family filed a petition for certiorari in this case, arguing the same two sources of reversible error. We granted the petition and now affirm the ruling of the court of appeals.1
American Family brought this claim against the DeWitts as Henderson's subrogee. American Family claims the concept of subrogation is equitable in nature and, therefore, its subrogee status necessarily creates a cause of action that sounds in equity rather than at law. We disagree that the existence of subrogation necessarily creates an equitable action and, accordingly, affirm the ruling of the court of appeals.
The distinction between law and equity has its roots in our judicial history. For many years, our judicial system contained separate courts of law and courts of equity, each of which developed different rules of substance, procedure, and remedy. Dodd, Law of Remedies, § 2.6(3) (2d ed.1976). Courts of law and courts of equity offered distinct types of relief to parties. For example,
The damages remedy was historically a legal remedy. The injunction and most other...
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