Guiberson v. Hartford Cas. Ins. Co.
| Decision Date | 08 August 1985 |
| Docket Number | No. 84-424,84-424 |
| Citation | 42 St.Rep. 1196,704 P.2d 68,217 Mont. 279 |
| Parties | Raymond GUIBERSON, Plaintiff and Respondent, v. HARTFORD CASUALTY INSURANCE COMPANY, Defendant, Third-Party Plaintiff and Appellant, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Tim Tintinger and the State of Montana, Third-Party Defendants and Appellants. |
| Court | Montana Supreme Court |
Alexander & Baucus, Nancy Cory argued, Great Falls, for Hartford Cas. ins.
Michael J. McKeon argued, Anaconda, for State Farm.
John Bobinski, Helena, argued for State, Dept. of Administration.
Corette, Smith, Pohlman & Allen, Butte; R.D. Corette & Robert Carlson, Butte, argued for Guiberson.
A jury in the Third Judicial District, Deer Lodge County, awarded plaintiff $600,000 in damages for injuries sustained after he jumped onto the trailer bed of his employer's beer truck in an attempt to prevent two escaped mental patients from absconding with it. In an amended judgment, the court found the State of Montana liable for half the verdict and the uninsured motorist (mental patient) liable for the other half. The State paid and settled its claims. Insurance companies appeal the amended judgment, and plaintiff cross-appeals to reinstate the original verdict.
We affirm the amended judgment to the extent that it determined the liabilities of the joint tort-feasors, the State of Montana and Tintinger, the uninsured motorist. We reverse the portion of the order which apportioned the liabilities in contract of the two insurance companies under their respective uninsured motorist provisions.
We hold that State Farm was the primary insurer with adequate coverage at the time of the accident to cover the entire liability of the uninsured motorist. Thus, Hartford as excess insurer owes nothing under these facts.
On January 14, 1981, Ray Guiberson was delivering beer to the Warm Springs Store in Deer Lodge County, Montana, and stopping to take orders for his employer, Roach & Smith Distributors, Inc. Ray was driving his employer's vehicle, a pickup truck with a fifth wheel trailer attached. He had left the keys in the ignition. While Ray was in the store, Tim Tintinger, a mental patient at Warm Springs State Hospital, jumped into the cab of the truck and another escaped patient jumped into the attached unit. They began driving away.
Ray raced out of the store and jumped into the trailer attached to the moving truck. He unsuccessfully tried to talk the two patients into stopping the truck. When they reached Interstate 90, Tintinger began driving at a high rate of speed, finally driving through a highway patrol roadblock and overturning the truck. Ray was thrown out of the attached trailer. He suffered contusions and abrasions over his entire body. A severe skull fracture extending into the base of the skull resulted in partial permanent hearing loss and destruction of the labyrinth on the left side.
Ray first filed suit against his own personal insurer, Hartford Casualty Insurance, which had a policy provision in accordance with Montana law covering uninsured motorists. Ray sought to have this provision applied to Tim Tintinger as an uninsured driver. Hartford joined as third-party defendants State Farm Mutual Automobile Insurance Company and the State of Montana. State Farm insured the fourteen vehicles owned and used by Ray's employer, Roach and Smith Distributors. State Farm's policy also contained an uninsured motorist provision.
Hartford brought in State Farm as the ownership insurer. Hartford impleaded the State under a theory of subrogation, alleging that the State's negligence in supervising Tintinger was the proximate cause of its contractual obligation to its insured. State Farm cross-claimed against the State, incorporating by reference Hartford's arguments on issues relating to subrogation.
The District Court denied a motion filed by the State of Montana on December 17, 1982, asking for dismissal of the third-party complaint against it. In February 1984 both State Farm and Hartford filed motions for summary judgment which the court denied. Finally, parties proceeded to trial on April 23, 1984. After several days of testimony, the jury returned a verdict on a special verdict form in favor of Ray for $600,000, finding Tintinger and the State equally responsible for Ray's injuries. Although the jury found the plaintiff Ray to be 10% negligent, it did not find that his negligence was a proximate cause of his injuries.
In the judgment entered May 2, 1984, the court decreed that "Plaintiff have and recover from the defendants, HARTFORD CASUALTY INSURANCE COMPANY, STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY; TIM TINTINGER and THE STATE OF MONTANA, the sum of SIX HUNDRED THOUSAND AND NO/100 ($600,000.00) DOLLARS ...." The State of Montana and Hartford moved to amend the judgment to conform to the verdict.
On May 30, 1984, the court rendered an amended judgment apportioning the $600,000 equally between the defendants found to be negligent and proximate causes of the injuries: Tim Tintinger, $300,000 and the State of Montana, $300,000. Relying on contractual language in the insurance policies, the court further apportioned the recovery of payments for the liabilities of Tintinger, the uninsured motorist, between Hartford and State Farm. The court based a pro rata apportionment on the limit of their respective coverages determined by "stacking," i.e., adding the total coverage for all vehicles for which each insured has paid a premium. For plaintiff's two vehicles at $50,000 each, Hartford's policy limits were $100,000; for plaintiff's employer's fourteen vehicles, State Farm's policy limits were $350,000. The ratios of 100,000/450,000 and 350,000/450,000 reduced to fractions resulted in the following apportionment:
(1). Hartford 22.223% $ 66,669.00
(2). State Farm 77.777% $233,331.00
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$300,000.00
There was no offset for plaintiff's negligence (10% on the special verdict form) because it was not a proximate cause of his injuries.
Hartford and State Farm appealed, and Ray Guiberson cross-appealed. The State settled its obligations with Ray on November 21, 1984. Under the terms of the settlement, the State paid Ray the sum of $145,000 cash and agreed to pay him $1,000 per month for life, with a thirty-year term certain for him and his designated beneficiaries. These payments commenced on January 1, 1985. Ray released the State from all claims he might have except those arising under the Workers' Compensation Act. His attorneys executed a satisfaction of May 30, 1984, amended judgment against the State.
We consider the following issues on appeal:
Hartford and State Farm's issues in common:
1. Is the State responsible for the entire jury verdict on the basis of subrogation?
2. Should the $300,000 limitation on governmental liability for damages in tort of Sec. 2-9-107, MCA, retroactively apply and if so, is the limitation constitutional?
Hartford's issue:
3. Did the court err by apportioning pro rata the insurance companies' coverages when the Hartford policy states that it is only an excess insurer?
State Farm's issues:
4. Did the District Court err in "stacking" the $25,000 policy limits on each vehicle to arrive at a total limitation of $350,000?
5. Does State Farm uninsured motorist coverage apply when the vehicle was not driven with consent and the vehicle was insured under the liability coverage of that policy?
Guiberson's issues:
6. Should this Court dismiss the appeal of Hartford as frivolous and assess damages for an appeal taken for purposes of delay?
7. Should the original verdict be reinstated so that defendants State Farm, Hartford and Tintinger would be liable jointly and severally for $300,000 each?
Issue Number 1: Subrogation. Hartford and State Farm contend that the State in negligent and careless acts failed to supervise its patient, Tintinger. Contending that without Tintinger's escape, Guiberson would not have sustained injuries, the insurance companies claim that the State is the party truly liable. Hartford and State Farm believe that, standing in the shoes of the plaintiff, they should be subrogated to his right against the real party responsible for the injuries, i.e., the State.
The insurers incorrectly cite State Farm v. Solem (Mont.1981), 622 P.2d 682, 38 St.Rep. 124, to support the insurers' right of subrogation following a jury determination of liability of the uninsured motorist. In fact, we held in Solem that State Farm had the procedural right under Rule 14(a), M.R.Civ.P., to implead the uninsured motorist or bring anyone who "may be" liable into the lawsuit in the first place under the principle of subrogation, without having to wait until the insurer pays a judgment. Solem, 622 P.2d at 683. Thus, Rule 14 permits impleading on the principle of contingent liability. Of course, an insurance company has the right of subrogation to the rights of the plaintiff once liability is established. But the insurers misconstrue the procedure in stepping into Guiberson's shoes after the verdict and applying the procedure of impleading. Rule 14 permits impleading of third parties before trial; it does not substitute for a jury determination of liability.
The State and Tintinger were already properly impleaded under Rule 14(a), M.R.Civ.P. The jury verdict found both parties equally negligent and equal proximate causes of Guiberson's injuries. In the amended judgment, the court conformed the result to the jury finding, determining that the patient was responsible for one-half the judgment, the State responsible for the other half. The State has satisfied the claim against it for its own negligence. The insurers are subrogated to the rights of Guiberson against the uninsured motorist, Tintinger, for his personal liability, as determined by the jury. His negligence is not imputable to the State. The...
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