Empire Fire & Marine Ins. Co. v. Williams

• Decision Date: 10 May 1963
• Docket Number: No. 38645,38645
• Parties: EMPIRE FIRE & MARINE INSURANCE CO., Appellant, v. Roger WILLIAMS and Barbara Bouchard, d.b.a. Pearson's Place, Respondents.
• Court: Minnesota Supreme Court

Page 580

121 N.W.2d 580

265 Minn. 333

EMPIRE FIRE & MARINE INSURANCE CO., Appellant, v. Roger WILLIAMS and Barbara Bouchard, d.b.a. Pearson's Place Respondents.

No. 38645.

Supreme Court of Minnesota.

May 10, 1963.

Syllabus by the Court

1. An automobile liability insurer ordinarily is subrogated to rights of its insured when it seeks recovery of payments made by it in settlement of accident claims arising out of accident which involved automobile of its insured. As such subrogee, insurer's rights are no greater than those of its insured.

2. Under Minn.St. 340.95, it has been determined by this court (Randall v. Village of Excelsior, 258 Minn. 81, 103 N.W.2d 131; Cavin v. Smith, 228 Minn. 322, 37 N.W.2d 368) that one whose voluntary intoxication has been the proximate cause of an accident may not recover from person whose illegal sale of intoxicants to him caused or contributed to such intoxication.

3. Provision in § 340.95 that 'other person' than certain specified parties therein who is injured in person or property or means of support by an intoxicated person may bring action therefor directly against person whose illegal sale of intoxicants caused or contributed to such intoxication would not extend to an insurer subrogated to rights of intoxicated person not authorized to bring such action. The legal entity of insurer under such circumstances is identical with that of its insured.

4. Decision here not inconsistent with that of court in Village of Brooten v. Cudahy Packing Co. (8 Cir.) 291 F.2d 284, where insurer proceeded as subrogee to rights of an insured Employer of intoxicated person since under § 340.95 an employer is specifically authorized to bring action directly against vendor whose illegal sale caused or contributed to the intoxication of person causing accident.

Schermer & Gensler, Minneapolis, for appellant.

Reavill, Jenswold, Neimeyer & Johnson, Duluth, for respondents.

Gordon Rosenmeier and John E. Simonett, Little Falls, amicus curiae.

THOMAS GALLAGHER, Justice.

The sole issue for determination here is whether an insurer of an intoxicated motorist involved in an automobile accident may bring action under Minn.St. 340.95 (known as the Civil Damage Act) against a licensed on sale tavern owner, causing the insured's intoxication, for sums which insurer has paid in settlement of claims against the insured arising out of the accident. Section 340.95 provides that:

'Every husband, wife, child, parent, guardian, employer, or other person who is injured in person or property, or means of support, by any intoxicated person, or by the intoxication of any person, has a right of action, in his own name, against any person who, by illegally selling * * * intoxicating liquors, caused the intoxication of such person, for all damages, sustained; * * *.'

Plaintiff, Empire Fire & Marine Insurance Company, issued an automobile liability policy to Ralph B. Snyder covering his liability for any damages arising out of the operation of his motor vehicle. On April 23, 1957, defendants, Roger Williams and Barbara Bouchard, doing business as Pearson's Place in Minneapolis, a licensed on sale liquor bar, sold intoxicating liquor to Snyder while he was obviously intoxicated in violation of § 340.14, subd. 1. ¹ As a result, Snyder became involved in an automobile accident wherein Anna Chovanec, John Chovanec, and Anna G. Chovanec sustained personal injuries. Thereafter, plaintiff paid the Chovanecs $2,600 in discharge and settlement of Snyder's legal liability to them. It is not disputed that such settlement was fair and reasonable and providently made in compliance with the terms of the policy.

Subsequently, plaintiff commenced this action against the defendants under § 340.95 to recover the amounts which it had paid. Based upon the facts as set forth above, defendants moved for summary judgment on the ground that plaintiff was not a party authorized to sue under § 340.95. This motion was granted, and in a memorandum attached to its order, the trial court stated:

'* * * In order to bring an action under this statute (§ 340.95), the plaintiff must qualify within the term other person'. The principle of ejusdem generis precludes extension of the term 'other person' beyond the class or classes specifically enumerated. There is no indication that the Legislature intended 'other person' to include an insurance carrier as coming within the same general classification as 'husband, wife, child, parent, guardian, employer.'

'* * * It is well settled in this state that neither the common law nor the civil damage statute gives one a right to recover for injury sustained as the result of his own voluntary intoxication. In the case of Randall v. Village of Excelsior, 258 Minn. 81, 103 N.W.2d 131, the Minnesota Supreme Court said:

"The Civil Damage Act does not create a cause of action in favor of one injured by his own intoxication. Only an innocent third person who is injured as a result of the intoxication of another is entitled to its benefits.'

'An insurance company, in exchange for a contract with an insured, accepts money premium payments with the full knowledge that its insured may become intoxicated and injure someone thus causing the company to suffer a monetary loss of injury. To allow the plaintiff insurance company, except by legislative action, to stand in a better position than its insured whould be to let the plaintiff have its cake and eat it too.'

1. It seems clear that whatever rights plaintiff may have against defedants under § 340.95 must arise by virtue of its position as subrogee to the rights of its insured, whose intoxication was the proximate cause of the accident and damages for which plaintiff made compensation. ² Standard policy provisions, and well-established legal principles with respect to subrogation, permit an insurer to be subrogated to all rights of its insured but no more. United States v. Munsey Trust Co., 332 U.S. 234, 67 S.Ct. 1599, 91 L.Ed. 2022; Buell v. United Firemen's Ins. Co., 167 Minn. 183, 208 N.W. 819; Morris v. Blossom, 181 Minn. 71, 231 N.W. 397. This principle is expressed in 50 Am.Jur., Subrogation, § 110, as follows:

'A subrogee * * * occupies the position of the party for whom he is substituted, and succeeds to the same But no greater rights. He cannot acquire any claim, security, or remedy which the creditor did not have. Moreover, the rights, claims, and securities to which he succeeds are taken subject to the Limitations, burdens, and disqualifications incident to them in the hands of the party to whom he is subrogated.' (Italics supplied.)

In United States v. Munsey Trust Co., 332 U.S. 234, 242, 67 S.Ct. 1599, 1603, 91 L.Ed. 2022, 2029, the United States Supreme Court recognizes the limitations of a subrogee in the following language:

'* * * it is elementary that one cannot acquire by subrogation what another whose rights he...