Gaier v. Midwestern Group, 91-CA-20

• Decision Date: 25 November 1991
• Docket Number: No. 91-CA-20,91-CA-20
• Citation: 601 N.E.2d 624,76 Ohio App.3d 334
• Parties: GAIER et al., Appellants, v. MIDWESTERN GROUP, Appellee. *
• Court: Ohio Court of Appeals

Page 334

76 Ohio App.3d 334

601 N.E.2d 624

GAIER et al., Appellants, v. MIDWESTERN GROUP, Appellee. ^*

No. 91-CA-20.

Court of Appeals of Ohio, Second District, Miami County.

Decided Nov. 25, 1991.

William H. Thornburgh, Troy, for appellants

Robert N. Snyder, Dayton, for appellee.

FAIN, Presiding Judge.

OPINION

Plaintiffs-appellants, J. Richard Gaier and William H. Thornburgh, appeal from a summary judgment rendered in favor of defendant-appellee, Midwestern Group. The sole issue in this appeal is whether Gaier and Thornburgh, as the attorneys for Patrick Garrett and his family, had the right to recover from Garrett's insurer, Midwestern Group, one third of the amount that Midwestern received from another insurance company in settlement of Midwestern's subrogation claim. Because there was no contractual relationship between Gaier and Thornburgh, on the one hand, and Midwestern, on the other, and because there was a failure of proof of at least one of the essential elements necessary to support a claim based on unjust enrichment or quantum meruit, we agree with the trial court that Midwestern was entitled to judgment as a matter of law. Accordingly, we affirm.

I

Gaier and Thornburgh agreed to represent Garrett and his family in a lawsuit arising out of an automobile accident involving the Garretts' car and a car operated by Jerri Jackson. The Garretts agreed to pay Gaier and Thornburgh a contingency fee of 33 1/3 percent of any settlement or judgment, after deducting for expenses of suit.

The Garretts were insured by Midwestern, and Jackson was insured by Westfield Companies. The Garretts' insurance policy with Midwestern included provisions for medical payments and for subrogation rights. Under the medical-payments provision, Midwestern paid $6,154 toward medical bills for the Garretts for injuries caused by the accident. After suit was filed and before trial, Gaier and Thornburgh negotiated a settlement of their clients' personal claims against Jackson for the sum of $114,250, which was paid by Westfield. From that settlement, Gaier and Thornburgh received attorney fees of $38,010.40. At the time of the settlement, Westfield also issued separate checks totalling $6,154 for Midwestern's subrogation claim. The record does not reflect the identity of the payees on these checks. We will assume that the checks were payable jointly to Midwestern and the Garretts and/or Gaier and Thornburgh.

Gaier and Thornburgh held the checks, claiming that they were entitled to one third of the amount as attorney fees. When Midwestern refused their claim to the fees, Gaier and Thornburgh filed a declaratory judgment action against Midwestern claiming that they were entitled to one third of the money as their contingency fee and also that they had been acting as agent for Midwestern, so that it was "only equitable" that Midwestern pay them the one-third fee.

Both parties filed motions for summary judgment. Gaier and Thornburgh alleged in their affidavit supporting their motion for summary judgment, but produced no other proof, that Midwestern "always" paid a one-third attorney fee on any recovery of a subrogation claim against a tortfeasor. Midwestern argued that there was no attorney-client relationship between Midwestern and Gaier and Thornburgh, and that Midwestern did its own work to protect its subrogation claim. The court granted summary judgment to Midwestern; Gaier and Thornburgh appeal.

II

Gaier and Thornburgh's sole assignment of error is as follows:

"The trial court erred in granting summary judgment in favor of the defendant and in failing to grant summary judgment in favor of the plaintiffs."

Gaier and Thornburgh argue that the language in the insurance policy regarding subrogation rights is ambiguous and, therefore, should be construed against the insurer, who drafted it. That provision is as follows:

"OUR RECOVERY RIGHTS. In the event of any payment under this policy, we are entitled to all the rights of recovery that the person or organization to whom payment was made has against another. That person or organization must sign and deliver to us any legal papers relating to that recovery, do whatever else is necessary to help us exercise those rights and do nothing after loss to prejudice our rights.

"When a person has been paid damages by us under this policy and also recovers from another, the amount recovered from the other shall be held by that person in trust for us and reimbursed to us to the extent of our payment."

Gaier and Thornburgh argue that the word "recovered" is not adequately defined as to "net" recovery or "gross" recovery and that equity requires Midwestern to pay a one-third attorney fee.

Gaier and Thornburgh do not claim that they had either an actual or an implied attorney-client relationship with Midwestern. Rather, they seem to be arguing that simply because they sued the tortfeasor and negotiated a settlement with the tortfeasor, for which they received substantial attorney fees, they also should be paid attorney fees for a separate settlement between the insurance companies on the subrogation claim for the medical payments. They apparently base this claim partly on the fact that the checks were...