Egros v. Pempton, s. CA
| Decision Date | 18 October 1991 |
| Docket Number | Nos. CA,s. CA |
| Citation | 588 So.2d 1139 |
| Parties | Nannette Hatten EGROS v. Johnnie E. PEMPTON, et al. 90 0526, CA 90 0527. 588 So.2d 1139 |
| Court | Court of Appeal of Louisiana — District of US |
Allen Edwards, Jim Dore, Plaquemine, Vincent J. Sotile, Jr., Donaldsonville, for Nannette Egros.
William J. Staser, Baton Rouge, for Jamie Hughes and Bruno J. Egros, III.
Kevin Patrick Monahan, Baton Rouge, for Jacqueline Maxwell.
Jay Dardenne, Baton Rouge, for Orona Cabinet and Millwork Co. and Assurance Co. of America
Michael P. Colvin, Baton Rouge, for State Farm Mut. Auto. Ins. Co.
Before WATKINS, CARTER and FOIL, JJ.
At issue in this appeal is whether an uninsured motorist carrier may recover the full amount of what it has paid to its insured's beneficiaries from a non-motorist tortfeasor found to be 15% at fault. The trial court allowed the uninsured motorist full reimbursement on its cross claim. We affirm.
The facts forming the basis for this appeal are not in dispute. On July 23, 1987, Bruno Egros was driving his vehicle on Highway 73 in Ascension Parish when he collided with an 18-wheeler which was blocking traffic on the highway. The 18-wheeler, driven by Johnnie Pempton and owned by K & K Trucking, was being used to deliver a load of lumber to Orona Cabinet and Millwork Company (Orona). John McAndrew was assisting Pempton as he attempted to back into Orona's driveway to complete the delivery. Pempton backed the trailer of the vehicle across Highway 73 and, while it was completely blocking the highway, Egros, travelling at 45 m.p.h., slammed into it. Mr. Egros died 11 days later from injuries sustained in the collision.
Nannette Egros and her children brought these wrongful death and survival actions against a number of defendants, including: Johnnie Pempton and K & K Trucking Company, and their insurer, Royal Insurance Company; Orona and its insurer, Assurance Company of America; and State Farm, the Egros' uninsured motorist carrier. State Farm filed a cross claim against defendants Pempton, K & K Trucking, Orona and Assurance, seeking to recover from them all sums it would be required to pay plaintiffs under its uninsured motorist coverage.
Prior to trial, plaintiffs settled with Royal Insurance Company for $735,000.00 and released it, along with its insureds, Pempton and K & K Trucking, from the lawsuit. Trial proceeded against Orona, Assurance and State Farm. The jury ruled in favor of plaintiffs, awarding them $2,362,518.80 and allocating fault for the death in the following manner: Johnnie Pempton and K & K Trucking--55%; John McAndrew--15%; Orona--15%; and Bruno Egros--15%. The trial judge reduced the amount of damages recoverable by 70%, the percentage of fault attributed to the released solidary obligors and to Bruno Egros, entering judgment in favor of plaintiffs for $903,663.00. The trial court cast Orona, Assurance and State Farm liable in solido on the judgment, subject to Assurance's policy limits of $500,000.00 and State Farm's $100,000.00 policy limits. Additionally, the trial court entered judgment in favor of State Farm on its cross claim against Orona and Assurance, granting to State Farm's insured's beneficiaries a preference over their insurer to recover the full amount of their damages.
Following the judgment, State Farm deposited its policy limits plus interest into the registry of the court; plaintiffs withdrew the proceeds and executed a satisfaction of the judgment in favor of State Farm. Plaintiffs also settled with Orona and Assurance, executing a satisfaction of the judgment in their favor. Orona and Assurance brought this appeal, challenging the action of the trial court in granting State Farm's cross claim against them.
Orona and Assurance's first assignment of error urges that there should be judgment in their favor on the cross claim because the trial court's judgment does not state a specific sum owed on the claim and State Farm did not seek a clarification of the judgment or answer this appeal. Our reading of the trial court's written reasons for judgment convinces us that the trial court intended that State Farm be paid on its cross claim the full amount of what it paid its insured's beneficiaries, $117,543.15, which represents the full policy limits plus interest deposited by it into the registry of the court. The amount of the judgment is easily ascertainable from the record before us and for the purposes of this appeal, we conclude the trial court awarded State Farm the entirety of what it paid on the plaintiffs' UM claims.
Orona and Assurance contend that the trial court erred in awarding State Farm the full amount of what it paid, arguing first that such an award constitutes impermissible indemnification because its insured, Bruno Egros, was found to be at fault. They then argue that State Farm could not be awarded the full amount on the basis of contribution because State Farm did not pay the entire amount of the judgment. These characterizations are misplaced. State Farm's right to recover what it has paid its insured is not grounded in indemnification or contribution, but rather is based on subrogation embodied in La.R.S. 22:1406(D)(4), which provides, in pertinent part:
D. The following provisions shall govern the issuance of uninsured motorist coverage in this state.
(4) In the event of payment to any person under the coverage required by this Section and subject to the terms and conditions of such coverage, the insurer making such payment shall, to the extent thereof, be entitled to the proceeds of any settlement or judgment resulting from the exercise of any rights of recovery of such person against any person or organization legally responsible for the bodily injury for which such payment is made, including the proceeds recoverable from the assets of the insolvent insurer.
This provision has been interpreted by our Supreme Court as embodying the principle of subrogation. Bosch v. Cummings, 520 So.2d 721 (La.1988). The Court has declined to read the provision expansively so as to grant the UM carrier an independent right of action against an uninsured motorist. Hebert v. Green, 311 So.2d 223, 228 (La.1975). It has made it clear that beyond the right to reimbursement, the statute does not even attempt to delineate the insurer-insured-tortfeasor relationship. Bond v. Commercial Union Assurance Co., 407 So.2d 401 (La.1981). Instead, the Court has construed La.R.S. 22:1406(D)(4) to grant to the UM carrier those rights afforded by the general civil code provisions governing subrogation. Bosch v. Cummings, 520 So.2d at 723. In Bosch, the Court explained that it has construed the provision narrowly to prohibit a UM carrier from attempting to limit, frustrate or interfere with the insured's right to pursue the fullest possible recovery and defeat the very purpose behind the uninsured motorist statute, that is, full reparation for all damages suffered by the innocent victims of uninsured or underinsured motorists. The UM carrier's subrogation rights were delineated as follows:
However, when the uninsured motorist insurer makes payment under its policy to its insured the carrier may become subrogated, under the general civil code articles on subrogation, in the measure of what it has paid, to the insured's right against the tortfeasor and his insurer, because this construction of the statute best conforms to the purpose of the law.... Under these precepts, the uninsured motorist carrier who pays all of its insured's damages is completely subrogated to his claim against the uninsured or underinsured tortfeasor, but when he pays for only part of the damages sustained, the insurer receives a partial, subordinate subrogation.... Because subrogation is a means of transferring an obligation under which one person is substituted to the rights of another, the uninsured motorist carrier by subrogation may acquire only whatever rights its insured has against the underinsured motorist or his insurer.
Bosch v. Cummings, 520 So.2d at 723-234. (Citations omitted)
Recognizing that State Farm is exercising its right of subrogation against Orona and Assurance, we now address the latter's argument that a UM carrier should not be entitled to full reimbursement against a non-motorist tortfeasor found to be only 15% at fault. Orona and Assurance contend that State Farm was called upon to pay plaintiffs because the only motorist in this case, found to be 55% at fault, did not have adequate insurance. They point to the recent case of American States Insurance Company v. Roark, 583 So.2d 570 (La.App. 3d Cir.1991), in which the court held that a UM carrier does not have a cause of action under La.R.S. 22:1406(D)(4) to seek reimbursement from the proceeds received from a settlement by the insured with the tortfeasor's homeowner's insurer. The court construed La.R.S. 22:1406(D)(4) to allow a UM carrier to demand reimbursement only when the insured receives money from the uninsured tortfeasor and the uninsured tortfeasor's insurer. In reaching that decision, the court relied on a passage from the case of Neimann v. Travelers Ins. Co., 368 So.2d 1003, 1007-1008 (La.1979), wherein the Supreme Court stated that the UM carrier has no right under La.R.S. 22:1406(D)(4) other than the right to reimbursement from the proceeds, if any, that the insured in fact recovers from the underinsured tortfeasor.
We do not read the language of La.R.S. 22:1406(D)(4) so narrowly. It clearly grants to the UM insurer the right to recover proceeds of any settlement or judgment resulting from the exercise of the rights of its insured against any person or organization legally responsible for the bodily injury for which such payment is made. The legislature did not limit the UM carriers' right of reimbursement to proceeds received from the uninsured motorist and his insurer, but instead granted that right when the UM...
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