Hardin v. Metlife Auto and Home Ins. Co.

• Decision Date: 31 August 2007
• Docket Number: 2060523.
• Citation: 982 So.2d 522
• Parties: Tiffany A. HARDIN and Tina Hardin v. METLIFE AUTO AND HOME INSURANCE COMPANY.
• Court: Alabama Court of Civil Appeals

982 So.2d 522

Tiffany A. HARDIN and Tina Hardin v. METLIFE AUTO AND HOME INSURANCE COMPANY.

2060523.

Court of Civil Appeals of Alabama.

August 31, 2007.

Certiorari Denied October 12, 2007 Alabama Supreme Court 1061721.

Robert R. Kracke and Clifton S. Price II, Birmingham, for appellants.

Jack M. Bains, Jr., of McDaniel, Bains & Norris, P.C., Homewood, for appellee.

THOMPSON, Presiding Judge.

On December 23, 2001, Tiffany A. Hardin, while driving a vehicle owned by Tina Hardin, collided with a vehicle owned and operated by John Foti. Foti and his wife sued Tiffany Hardin, Tina Hardin (hereinafter "the Hardins"), and the Fotis' underinsured-motorist-insurance provider, Metlife Auto and Home Insurance Company ("Metlife").

On or about September 24, 2004, the Fotis' attorney notified counsel for Metlife of the Fotis' intention to settle at least some of their claims against the Hardins with the Hardins' liability-insurance carrier, Safeway Insurance Company of Alabama, Inc. ("Safeway"). The amount of that proposed settlement was $17,000. In a letter dated September 24, 2004, Metlife's attorney advised the attorney for Safeway that Metlife would advance to the Fotis the $17,000 settlement offer and retain its right of subrogation against the Hardins. Shortly thereafter, on October 12, 2004, Metlife sent a check in the amount of $17,000 to the Fotis' attorney with a designation indicating that the check was for the purpose of the "substitution of tortfeasor funds."

In a letter dated March 30, 2005, counsel for Metlife notified the Hardins that Metlife had settled all of the Fotis' remaining claims for an additional $3,000. In that letter, Metlife requested that either the Hardins or Safeway reimburse the $17,000 Metlife had paid to the Fotis in order to protect its subrogation rights. On March 31, 2005, Safeway sent to Metlife a $17,000 check. Metlife rejected that check and notified Safeway that it intended to seek repayment of the entire $20,000 it had paid on the claims; in the letter communicating that position, Metlife specified that it was not waiving its subrogation rights.

Although the record does not contain any documents concerning Safeway's reaction to Metlife's rejection of the $17,000 check, Metlife has alleged that on or after June 24, 2005, it reconsidered its position and advised Safeway that it would accept the initial offer of $17,000. According to Metlife's allegations, however, after Metlife decided to accept the payment of $17,000, Safeway or the Hardins refused to make any payment on Metlife's subrogation claim.

On March 28, 2006, Metlife sued the Hardins seeking to enforce its subrogation rights. In its complaint, Metlife sought an award of $17,000, the amount it contended represented its subrogation interest. The Hardins filed a motion to dismiss Metlife's complaint, arguing that Metlife was barred by the applicable statute of limitations from asserting its right of subrogation against them. The trial court denied the Hardins' motion to dismiss. The Hardins then answered Metlife's complaint by again asserting, among other things, that Metlife's claim was barred by the applicable statute of limitations.

Metlife moved for a summary judgment. The Hardins responded to that motion, and they moved for a summary judgment. On February 22, 2007, the trial court entered an order granting Metlife's summary-judgment motion and denying the Hardins' motion. The Hardins timely appealed.

The pertinent facts are not in dispute, and, therefore, this action must be resolved by applying the applicable law to the undisputed facts. "Where only a question of law is presented, a case is appropriate for a summary judgment." Finch v. Auburn Nat'l Bank of Auburn, 646 So.2d 64, 65 (Ala.Civ.App.1994); see also Bice v. Indurall Chem. Coating Sys., Inc., 544 So.2d 948, 952 (Ala.1989) ("The uncontroverted facts offered below in support of and in opposition to the motion for summary judgment present a question of law appropriate for resolution by summary judgment."). "`[O]n appeal, the ruling on a question of law carries no presumption of correctness, and this Court's review is de novo."' Rogers Found. Repair, Inc. v. Powell, 748 So.2d 869, 871 (Ala.1999) (quoting Ex parte Graham, 702 So.2d 1215, 1221 (Ala.1997)).

In this case, in reaching its judgment the trial court relied upon certain caselaw precedent from Florida that has been presented as persuasive authority by Metlife. See Fireman's Fund Ins. Co. v. Rojas, 409 So.2d 1166 (Fla.Dist.Ct.App. 1982). However, there is an Alabama case on point in which our supreme court addressed the issue of when the statute of limitations begins to run on a subrogated insurer's third-party claim. Home Ins. Co. v. Stuart-McCorkle, Inc., 291 Ala. 601, 285 So.2d 468 (1973).

In Home Insurance Co. v. Stuart-McCorkle, Inc., supra, the plaintiff business sued its insurer, Home Insurance Company ("Home"), seeking coverage for damage caused by water and ice that fell into the business's premises during a renovation project. Home filed a third-party complaint against, among others, the contractor, the subcontractor, and the architect on the renovation project. In its complaint, Home alleged that it held a right of subrogation against the defendants. During the jury trial, the trial court gave affirmative charges that, among other Jthings, indicated that the then-applicable statute of limitations barred Home's third-party complaint. The trial court entered a judgment on a jury verdict in favor of the plaintiff against Home and against Home on its claims against the third-party defendants. Home appealed, arguing that the trial court had erred in allowing the affirmative charge concerning the statute of limitations. Our supreme court agreed with the trial court, concluding that the statute of limitations applicable to Home's subrogation claim began to run at the time the insured's rights to recovery arose. Home Ins. Co. v. Stuart-McCorkle, Inc., supra. The court explained the basis for its holding as follows:

"[W]e find the well established rule that a subrogee can acquire no greater rights than those possessed by the principal whose rights he asserts. In Crutchfield v. Johnson & Latimer, 243 Ala. 73, 8 So.2d 412 (1942), this court stated the rule as follows:

"`A person entitled to subrogation must work through the creditor whose rights he claims. He stands in the shoes of the creditor and is entitled to the benefit of all the remedies of the creditor and may use all means which the creditor could to enforce payment. ... But he can only enforce such rights as the creditor could enforce, and must exercise such rights under the same conditions and limitations as were binding on the creditor, and hence, can be subrogated to no greater rights than the one in whose place he is substituted. ...' [Citations omitted]

"....

"Furthermore, this court has specifically held this principle applicable to the running of the statute of limitations. In American Bonding Co. v. Fourth National Bank, 205 Ala. 652, 88 So. 838 (1921), involving a suit by a surety suing as subrogee of a cestui que trust against a third party who participated in the misappropriation by the surety's principal of money belonging to the cestui que trust, this court stated:

"`... The complainant, the bonding company, as surety for Estelle Manegold, seeks to be subrogated to her rights in the enforcement of the claim against the bank, but the complainant as surety can stand in no higher position than the principal. Colvin v. Owens, 22 Ala. 782 [(1853)]; Houston, Ex'r, v. Branch Bk., 25 Ala. 250 [(1854)]. This principle is likewise applicable so far as the running of the statute of limitations is concerned. 17 R.C.L. 833.'

"We note that the surety in American Bonding was not suing for indemnity against his principal as was the surety in Smith v. Pitts, [167 Ala. 461, 52 So. 402 (1910)], but rather was suing as subrogee against a third party against whom he had no right of indemnity.

"The rule stated in American Bonding is in accord with the overwhelming weight of authority in other jurisdictions. See 3 Moore's Federal Practice [14.09]; Appleman, Insurance Law & Practice, § 4102; 16 Couch 2d, Insurance, § 61:230.

"....

"We, therefore, conclude that the statute of limitations began to run against appellant Home at the same time it began to run against its insured, Schloss & Kahn, on December 17, 1968, at the latest.

"It is clear from our cases that the statute of limitations begins to run when the cause of action accrues, and that the cause accrues as soon as the party in whose favor it arises is entitled to maintain an action thereon. Henslee v. Merritt, 263 Ala. 266, 82 So.2d 212 (1955); Brown v. First National Bank of Montgomery, 261 Ala. 565, 75 So.2d 141 (1954); Esslinger v. Spragins, 236 Ala. 508, 183 So. 401 (1938); Larue v. C.G. Kershaw Contracting Co., 177 Ala. 441, 59 So. 155 (1912).

"We have held that the statute begins to run whether or not the full amount of damages is apparent at the time of the first legal injury. In Kelly v. Shropshire, 199 Ala. 602, 75 So. 291, 292 (1917), the rule was stated as follows:

"`If the act of which the injury is the natural sequence is of itself a legal injury to plaintiff, a completed wrong, the cause of action accrues and the statute begins to run from the time the act is committed, be the actual damage [then apparent] however slight, and the statute will operate to bar a recovery not only for the present...