American States Ins. Co. v. Williams

• Decision Date: 08 February 1972
• Docket Number: No. 871A156,871A156
• Citation: 151 Ind.App. 99,278 N.E.2d 295
• Parties: AMERICAN STATES INSURANCE COMPANY, Appellant, v. Dennis WILLIAMS, Appellee, William Irwin and The Progressive Steel Workers of Hammond, Indiana, Inc., Appellee (Third Party Defendant).
• Court: Indiana Appellate Court

Page 295

278 N.E.2d 295

151 Ind.App. 99

AMERICAN STATES INSURANCE COMPANY, Appellant, v. Dennis WILLIAMS, Appellee William Irwin and The Progressive Steel Workers of Hammond Indiana, Inc., Appellee (Third Party Defendant).

No. 871A156.

Court of Appeals of Indiana, Third District.

Feb. 8, 1972.

Frank J. Galvin, Jr., Hammond, Karl M. Jacobs, Fowler, for appellant.

Eugene M. Feingold, Wilson, Benne, Feingold & Donnersberger, Hammond, for appellee.

SHARP, Judge.

This case arose as a result of an automobile collision which occurred in Hammond, Indiana on May 22, 1967. This collision involved an automobile owned by the City of Hammond, Indiana and operated by Dennis Williams. The automobile operated by Dennis Williams was insured by the Appellant, American States Insurance Company, with a standard form uninsured motorist endorsement. The other automobile involved in the collision was operated by one William Irwin. On July 5, 1968, Dennis Williams filed a complaint for personal injury damages against the Appellant, American States Insurance Company, alleging that the automobile operated by William Irwin was an uninsured vehicle. On July 10, 1969, the Appellant, American States Insurance Company, filed its cross-complaint for declaratory relief designating William Irwin as cross-defendant (third party defendant). On August 24, 1970, the Appellant, American States Insurance Company, filed its cross-complaint for declaratory relief designating The Progressive Steel Workers of Hammond, Indiana as cross-defendant (third party defendant) alleging that at the time of the collision on May 22, 1967, William Irwin was acting as an agent for The Progressive Steel Workers of Hammond, Indiana, Inc.

Both Irwin and The Progressive Steel Workers of Hammond, Indiana, Inc. filed separate motions to dismiss as to said cross-complaints for failure to state a claim pursuant to Trial Rule 12(b)(6) under the Indiana Rules of Civil Procedure asserting the defense of the two year statute of limitations as provided in Ind.Ann.Stat. § 2--602 (Burns 1967), I.C.1971, 34--1--2--2 which provided in pertinent part as follows:

'The following actions shall be commenced within the periods herein prescribed after the cause of action has accrued, and not afterwards.

'First. For injuries to person or character, for injuries to personal property * * * within two (2) years.'

The trial court granted both motions to dismiss on the basis of the above cited two year statute of limitations. The Appellant, American States Insurance Company, is not asserting any error with regard to the sustaining of the motion as to Irwin. (Although Irwin has been included as a party in the caption of this case, he is not really a party here.) The Appellant is asserting error in sustaining the motion to dismiss as to The Progressive Steel Workers of Hammond, Indiana, Inc.

In Indiana Insurance Company v. Noble, Ind.App., 265 N.E.2d 419 at page 432 (1970), this Court stated the options available in this kind of case as follows:

'1. He may file an action directly against his insurance company without joining the uninsured motorist as a party defendant and litigate all of the issues of liability and damages in that one action. Wortman v. Safeco Ins. Co., supra (D.C., 227 F.Supp. 468); Hill v. Seaboard Fire and Marine Ins. Co., supra (Mo.App., 374 S.W.2d 606); Boughton v. Farmers Insurance Exchange, supra (Okl., 354 P.2d 1085); Application of Travelers Indemnity Co. (Debose), Sup., 226 N.Y.S.2d 16 (1960), and State Farm Mutual Auto Ins. Co. v. Matlock, Tex.Civ.App., 446 S.W.2d 81 (1969). See also Lawrence v. Continental Ins. Co., La.App., 199 So.2d 398 (1967).

2. He may file an action joining both the uninsured motorist and the insurance company as party defendants and litigate all of the issues of liability and damages in that action. See American Fid. Fire Ins. Co. v. Hartford Accident and Indem. Co., 251 S.C. 507, 163 S.E.2d 926 (1968), and Widiss page 273. See also, Hill v. Seaboard Fire and Marine Ins. Co., supra.

3. He may file an action against the uninsured motorist alone without joining the insurance company as a party defendant and litigate the issues of liability and damages. In such case he gives preliminary and adequate notice of the filing and pendency of such action to the insurance company so that they may take appropriate action including intervention.

4. He may file an action against the uninsured motorist and give no notice to the insurance company.

'There can be no question that under options one and two the insurance company is bound by the determination of the issues of liability and damages after all appellate remedies are exhausted . . ..'

In this case Dennis Williams had the option to file an action directly against his insurance company without joining the uninsured motorist as a party defendant. However, the insurance company had an equal right to bring in as parties the uninsured motorist and his principal. This is certainly in accord with the overriding premise expressed in Indiana Insurance Company v. Noble, supra, to litigate all disputes in one case. This right on the part of the insurance company to join the uninsured motorist and his principal as parties to this action and the right of the appellant insurance company to require its insured to file a lawsuit against the uninsured motorist is explicitly provided for in the policy here in question as follows:

'After notice of claim, under this endorsement, the company may require the insured to take such action as may be necessary or appropriate to preserve his right to recover damages from any person or organization alleged to be legally responsible for the bodily injury--the company may require the insured to join such person or organization as party defendant.'

The only really substantive question which remains is whether or not the defendant-appellant insurance company acted to bring in the uninsured motorist and his principal within the statute of limitations.

As a threshold matter, we must decide whether a motion to dismiss under Trial Rule 12(B)(6) can be a proper vehicle to raise the defense of the statute of limitations. In Cassidy v. Cain, Ind.App., 251 N.E.2d 852 (1969), this Court held that summary judgment was a proper means to raise the defense of the statute of limitations. Although Cassidy v. Cain, supra, was decided before the adoption of the new rules of Civil Procedure on January 1, 1970, it remains valid. Further, we believe that a motion to dismiss under Trial Rule 12(B)(6) is also a proper vehicle by which the statute of limitations may be raised if the complaint (or in this case cross-complaint) shows on its face that it was filed subsequent to the running of the statute of limitations. See Harvey, Indiana Procedure, Vol. 1, page 483, which states:

'There is a division in federal cases on the question of whether affirmative defenses may be raised by motion. Many cases have held that, in view of the provisions of Rule 9(F) making allegations of time material on an issue of sufficiency of the complaint, a complaint which shows on its face that the claim is barred by the statute of limitations fails to state a claim and can be dismissed on a motion made under Rule 12(B)(6).'

See also Wright and Miller Federal Practice and Procedure, Vol. 5, § 1277, pp. 328 to 338, and Barron and Holtzoff, Federal Practice and Procedure, Vol. 1A, § 281, pp. 182 to 192.

Where it is clear from the face of the complaint (or in this case the cross-complaint) that it is barred by the statute of limitations, such complaint (or cross-complaint) may be subject to a motion to dismiss.

The basic issue presented for determination is two-fold; the nature and extent of any right acquired by an insurance company upon payment of a claim to one of its insureds under an uninsured motorist endorsement, and the statute of limitations applicable to such right.

Prior to 1969, the statute requiring the offering of uninsured motorist protection, Ind.Ann.Stat. § 39--4310 (Burns 1965 Repl.), contained no mention of any subrogation rights of the insurer against the uninsured motorist. In 1969, the section was amended by the General Assembly, Ind.Ann.Stat. § 39--4310 (Burns 1970 Supp.), I.C.1971, 27--7--5--1 so as to specifically give the insurance company the right of subrogation. The section as amended reads in pertinent parts as follows:

'The policy or indorsement affording the coverage specified in this act may further provide that payment to any person of sums as damages under such coverage shall operate to subrogate the insurer to any cause of action in tort which such person may have against any other person or organization legally responsible for the bodily injury or death because of which such payment is made, and the insurer shall be subrogated, to the extent of such payment, to the proceeds of any settlement or judgment that may thereafter result from the exercise of any rights of recovery of such person against any person or organization legally responsible for said bodily injury or death for which payment is made by the insurer. Such insurer may enforce such rights in its own name or in the name of the person to whom payment has been made, as in their interest may appear, by proper action in any court of competent jurisdiction.' (Acts 1965, ch. 138 sec. 1, p. 215; 1969 ch. 124, sec. 1, p. 272.) (Emphasis added.)

Both parties here assume that even prior to the above amendment, an insurance company had the right of subrogation, although this question is much in conflict among the several states, which is presumably why the legislature enacted the amendment. Since this question will henceforth be moot and because the parties do not raise the issue, we will not belabor the point except to hold that we agree that the right existed prior to the amendment. See Hudak, Arbitration, Statutes of Limitation and Uninsured Motorist Endorsements, 19 Clev.S.L.Rev. 528 (19 ) and Walsh, Subrogation...