Dairyland Ins. Co. v. Mumert

• Decision Date: 14 November 1973
• Docket Number: No. 55866,55866
• Citation: 212 N.W.2d 436
• Parties: DAIRYLAND INSURANCE COMPANY, Appellant, v. Lyle MUMERT d/b/a 'The Office' Tavern, Appellee.
• Court: Iowa Supreme Court

Page 436

212 N.W.2d 436

DAIRYLAND INSURANCE COMPANY, Appellant, v. Lyle MUMERT d/b/a 'The Office' Tavern, Appellee.

No. 55866.

Supreme Court of Iowa.

Nov. 14, 1973.

Patterson, Lorentzen, Duffield, Timmons, Irish & Becker, and Robin L. Hermann, Des Moines, for appellant.

Klockau, McCarthy, Schubert, Lousberg, Ellison & Rinden, Rock Island, Ill., and Cornwall, Avery & Berg, Spencer, for appellee.

Heard by MOORE, C.J., and RAWLINGS, LeGRAND, REES and REYNOLDSON, JJ.

REES, Justice.

This appeal is from an order of trial court sustaining detendant's motion to dismiss petition of plaintiff asking contribution from defendant for settlement arrived at between plaintiff and the owner and occupants of an automobile with which plaintiff's insured came into collision while the insured was allegedly intoxicated.

In its petition, plaintiff alleged it was a foreign corporation duly licensed and authorized to transact in Iowa the business of writing and issuing automobile liability insurance policies. It further alleged that defendant Mumert, d/b/a 'The Office' Tavern, is an individual, a resident of Cherokee, operating a tavern or dram shop at Cherokee, and that he is or was a licensee or permittee subject to the rules and regulations of chapter 123, The Code, 1971.

Plaintiff further alleged that at all times material it had in full force and effect a policy of automobile liability insurance it had issued to one Raymond Ware, and which insured Ware against legal liability for damages done by his automobile while being driven by himself, and that on or about December 3, 1971 defendant sold to Ware beer or liquor while Ware was in an intoxicated condition or to the extent that he became intoxicated. It further alleged that Ware, on December 3, 1971, after leaving defendant's place of business in an intoxicated state, drove his automobile in such a careless and negligent manner as to collide with an automobile owned by one Hiniker and being then and there operated by Hiniker's wife, and in which vehicle the minor daughter of the Hinikers was riding as a passenger.

Plaintiff further alleged in its petition that as a consequence of said collision the motor vehicle was damaged in the amount of $1362.75, and that the occupants Ilene Hiniker and Linda Hiniker sustained injuries. Plaintiff further alleged that subsequent to the collision, and after it had investigated the causes thereof and the extent of the damages, it entered into a settlement agreement with Owen Hiniker, Ilene Hiniker and Linda Hiniker, and paid to them for a release the sum of $2682.57, which represented a fair and reasonable payment for the property damage and physical injuries incurred as the result of the collision. Plaintiff further asserted there was in fact common liability between the defendant Mumert and its insured Ware to the Hinikers, and that defendant and plaintiff's insured Ware were concurrent tort-feasors the defendant's negligence being predicated on his violation of chapter 123, The Code, 1971, and the negligence of its insured Ware being predicated upon his statutory and common-law violations of the law of the road. Plaintiff demanded judgment and contribution from the defendant in the amount of $1341.29 and interest.

Defendant's motion to dismiss was on the grounds that the petition of plaintiff was insufficient at law and failed to state a cause of action for the reason that said cause of action for contribution had been abolished as to the defendant by virtue of chapter 131, Acts of the 64th General Assembly, 1st session, which became effective on January 1, 1972, and that since the plaintiff had not made settlement with the Hinikers until February 1, 1972, its cause of action did not arise until the latter date, and that as a consequence of its settlement subsequent to the effective date of the act of the 64th General Assembly referred to, that plaintiff was barred by the aforementioned statute from recovering against the defendant. Trial court sustained the motion to dismiss on July 7, 1972, and later enlarged its ruling in conformity with plaintiff's application for enlargement thereof on August 18, 1972. From such order sustaining defendant's motion to dismiss, plaintiff appeals. We affirm.

Plaintiff assigns two errors upon which it relies for reversal

(1) The court erred in holding plaintiff's cause of action for contribution was barred by section 94 of chapter 131 of the laws of the 64th G.A., 1st session; and

(2) Trial court erred in holding section 94 of chapter 131 of the laws of the 64th G.A., 1st session, constitutional.

I. Plaintiff contends its action for contribution against defendant is not precluded by the provisions of chapter 131, section 94, Acts of the 64th General Assembly, 1st session, which now appears as section 123.94, The Code, 1973. The act which took effect January 1, 1972, provides as follows:

'No right of action for contribution or indemnity shall accrue to any insurer, guarantor or indemnitor of any intoxicated person for any act of such intoxicated person against any licensee or permittee as defined in this act.'

The accident which gives rise to the common liability of plaintiff and defendant to the injured third parties happened before the effective date of the above recited statute, and on December 3, 1971. The settlement, and actual payment by plaintiff to the injured parties--Hinikers--was on February 1, 1972, one month after the effective date of the statute. The question for our determination here, then, is when a right of action for contribution Accrues for the purposes of section 123.94, The Code, 1973 (chapter 131, § 94, Acts of the 64th G.A., 1st session).

Both parties to this appeal concede that absent the statutory enactment of section 123.94, an intoxicated driver or his insurer who has paid damages to a third person injured by the driver could recover contribution from the vendor of the liquor. See Federated Mutual Implement & Hardware Ins. Co. v. Dunkelberger, 172 N.W.2d 137 (Iowa 1969). Plaintiff further asserts that despite the legislative prohibition against contribution or indemnity recovery provided for in section 123.94, The Code, there still remains in Iowa a common-law right to contribution between negligent concurrent tort-feasors, and we agree. Best v. Yerkes, 247 Iowa 800, 77 N.W.2d 23, 60 A.L.R.2d 1354; Allied Mutual Casualty Co. v. Long, 252 Iowa 829, 107 N.W.2d 682; Fane v. Hootman, 254 Iowa 241, 117 N.W.2d 435; Iowa Power & Light Co. v. Abild Const. Co., 259 Iowa 314, 144 N.W.2d 303.

In 18 Am.Jur.2d, Contributions, § 46, p. 66, we find:

'It is important to note, however, the distinction between the accrual of the right to Recover contribution and the inchoate right to contribution before payment or discharge of the common liability. Even though a cause of action for contribution does not become complete until the claimant's act of payment or discharge of more than his equitable share of the common liability, generally a right to be protected against an unfair exaction--an incidental or inchoate right to compel contribution--comes into being and becomes the property right or interest of a tortfeasor the instant the joint or concurring acts of himself and other tortfeasors give to the injured person a cause of action against them--in other words, when the common liability arises. Such right is in a sense an incident which follows the principal event out of which the injured person's cause of action arises, and once in being, although contingent, subordinate, or inchoate, it is nonetheless real and subsisting, and has an existence in contemplation of law until it is no longer needed as a resource to which the joint tortfeasor may look for relief from an imposition upon him of an inequitable share of the burden on account of the joint tort, provided he does not in the meantime waive or give up such right. This inchoate right arises as soon as the acts of the joint wrongdoers raise the injured person's cause of action against them; it does not depend upon an action against them being commenced. It is held that even death of a joint tortfeasor after the negligent act has fixed the right of contribution upon the common liability does not destroy such right nor interfere with its legal growth into an accrued cause of action.'

And, at 18 Am.Jur.2d, Contribution, § 9, pp. 20--21, we further find:

'While it is true that a common burden or obligation resting upon the parties is essential to the accrual of the right of contribution, no cause of action therefor arises merely because of the relationship of the parties or because of the claimant's liability on such obligation. The right to contribution is inchoate or subordinate from the time of the creation of the relationship giving rise to the common burden until the time of payment by a co-obligor of more than his proportional share, and as a rule, the right to contribution becomes complete and enforceable only upon a payment or its equivalent by the claimant discharging, satisfying, or extinguishing the whole or more than his just and equitable share of the common obligation, provided the obligation is due at the time. Or, stated it terms applicable to actions at law, the implied promise to contribute is considered as made at the time the common liability is assumed and the right to sue thereon arises when a party has paid or satisfied the whole of the obligation or more than his share thereof.'

The foregoing principles are summarized succinctly in 18 C.J.S. Contribution § 4, p. 7:

'The right to contribution is inchoate from the date of the creation of the relation between the parties, but is not complete, so as to be enforceable, until there has been an actual payment, in whole or in part, of the common obligation or until something is done equivalent to a discharge thereof.'

Section 123.94, The Code, 1973, and its antecedent Act of the General Assembly, commands that '(n)o right of action for contribution * * *...