Hardware Dealers Mut. Fire Ins. Co. v. Krueger

• Decision Date: 29 June 1971
• Docket Number: No. 43059,43059
• Citation: 486 P.2d 737
• Parties: HARDWARE DEALERS MUTUAL FIRE INSURANCE COMPANY, Plaintiff in Error, v. Ronald E. KRUEGER, Defendant in Error.
• Court: Oklahoma Supreme Court

Page 737

486 P.2d 737

HARDWARE DEALERS MUTUAL FIRE INSURANCE COMPANY, Plaintiff in Error, v. Ronald E. KRUEGER, Defendant in Error.

No. 43059.

Supreme Court of Oklahoma.

June 29, 1971.

Syllabus by the Court

An insurer which pays the insured for medical expenses pursuant to the terms of an automobile insurance policy may not, on principles of subrogation, recover such sum from the tortfeasor, for the reason that the right to recover medical expenses is a part of, and not separate and apart from, the nonassignable personal injury claim.

Appeal from the District Court of Oklahoma County; Ben LaFon, Judge.

Action by Hardware Dealers Mutual Insurance Company (insurer) against Ronald E. Krueger (tortfeasor) to recover medical expense paid by insurer under insurance policy provisions with insured, whereby insurer was stated to be subrogated to insured's rights against tortfeasor. Trial court sustained motion for summary judgment in favor of tortfeasor.

Ben A. Goff, Oklahoma City, for plaintiff in error.

Foliart, Shepherd, Mills & Niemeyer by David W. Edmonds, Oklahoma City, for defendant in error.

Monnet, Hayes, Bullis, Grubb & Thompson by John T. Edwards, Oklahoma City, for amicus curiae Travelers Ins. Co. and American Ins. Assn.

Howard K. Berry, Jr., Oklahoma City, for amicus curiae Oklahoma Trial Lawyers Assn.

DAVISON, Vice Chief Justice.

Hardware Dealers Mutual Fire Insurance Company (plaintiff below) appeals from a judgment rendered in favor of Ronald E. Krueger (defendant below) when the trial court, based on the pleadings and stipulation of the parties, sustained defendant's motion for summary judgment.

The facts are that plaintiff issued an automobile liability insurance policy to one C. R. Horne providing for payment of reasonable medical expense incurred within one year by Horne or a relative as a result of an accident, while occupying the automobile. Mrs. Horne, while operating the car, had a collision with a car driven by defendant, and plaintiff paid the medical expenses of Mrs. Horne to the extent of $1444.86. Mrs. Horne settled her claims against defendant for her personal injuries and executed a general release. This settlement was made with full knowledge of all concerned of the claim of plaintiff that under the terms of the policy it was subrogated to the rights of the injured Mrs. Horne against the defendant.

Plaintiff then sued defendant (tortfeasor) to recover the above amount, alleging the collision was due to the negligence of defendant. No issue is raised concerning the sufficiency of the petition to allege defendant's negligence. Plaintiff's alleged right to maintain the action was based upon the subrogation provisions in the policy and in the subrogation receipts given to plaintiff by Horne and his wife upon payment of the medical expense. In this respect the policy provides as follows:

'In the event of any payment under the Medical Expense Coverage of this policy, the company shall be subrogated to all the rights of recovery therefor which the insured person or anyone receiving such payment may have against any person or organization and such person shall execute and deliver instruments and papers and do whatever else is necessary to secure such rights. Such person shall do nothing after loss to prejudice such rights.'

The wording in the receipts is practically identical.

The insertion of medical payment terms in automobile liability policies with provision for subrogation rights in the insurer has caused extensive litigation. See Annotation 19 A.L.R.3rd 1054, and Harleysville Mutual Insurance Company v. Lea, 2 Ariz.App. 538, 410 P.2d 495, and Higgins v. Allied American Mutual Fire Ins. Co. (Dist.Col.Ct.App.) 237 A.2d 471, for divergent views and for citations.

Subrogation has been defined as:

'The substitution of one person in the place of another with reference to a lawful claim, demand or right, Whyel v. Smith, 101 Fla. 971, 134 So.2d 552 (134 So. 552), 554; so that he who is substituted succeeds to the rights of the other in relation to the debt or claim, and its rights, remedies, or securities. Home Owners' Loan Corporation v. Baker, 299 Mass. 158, 12 N.E.2d 99 (12 N.E.2d 199).' Black's Law Dictionary, 4th Edition.

In 6 Am.Jur.2d Assignments, Sec. 1, the word assignment is discussed and defined as follows:

'The word assignment is sufficiently comprehensive to include the transfers of all kinds of property and property rights and is sometimes used synonymously with 'grant' so as to operate as a conveyance of the title to real property, but ordinarily it is limited in its application to the transfer of intangible rights, including contractual rights, choses in action, and rights in or connected with property as distinguished from the property itself. * * *.'

The terms of the policy and receipts subrogate plaintiff, to the extent of the medical expense, 'to all the rights of recovery therefor which' the Hornes have against the person liable for the injuries. Regardless of the words used it appears to us that the above provisions merely attempt to change (by transfer) the party entitled to enforce the personal injury claim of Mrs. Horne against the defendant tortfeasor. As applied to the present circumstances there is nothing distinguishable between the effect of subrogation and...