Hockelberg v. Farm Bureau Ins. Co.

• Decision Date: 23 July 1980
• Docket Number: No. 3-379A79,3-379A79
• Parties: Marjorie HOCKELBERG, Appellant (Plaintiff Below), v. FARM BUREAU INSURANCE COMPANY, Appellee (Defendant Below).
• Court: Indiana Appellate Court

Page 1160

407 N.E.2d 1160

Marjorie HOCKELBERG, Appellant (Plaintiff Below), v. FARM BUREAU INSURANCE COMPANY, Appellee (Defendant Below).

No. 3-379A79.

Court of Appeals of Indiana, Third District.

July 23, 1980.

David C. Field, Spangler, Jennings, Spangler & Dougherty, P. C., Gary, for appellant.

James J. Nagy, Eichhorn, Eichhorn & Link, Hammond, for appellee.

HOFFMAN, Judge.

This is an appeal from an order of summary judgment entered against plaintiff-appellant Marjorie Hockelberg in an action to recover on her automobile insurance policy issued by defendant-appellee Farm Bureau Insurance.

It appears that on October 30, 1973 Hockelberg was involved in an automobile wreck with a vehicle driven by Leonard Smith and owned by Hennis Freight Lines. As a result of the collision Hockelberg suffered personal injuries. On September 9, 1975 she filed suit against Smith and Hennis, charging them with negligence. This suit was settled for $15,000. In connection with the settlement Hockelberg entered into a release wherein Smith and Hennis were discharged from all liability arising out of the accident. Pursuant to these negotiations the cause was dismissed with prejudice to Hockelberg.

Prior to dismissal of that suit Hockelberg made claim against Farm Bureau for $2,000 worth of medical expenses incurred by reason of the accident. Farm Bureau took the position that before it would tender payment Hockelberg would have to sign a medical subrogation receipt and trust agreement thereby assigning her right of recovery against Smith and Hennis. Its stance was predicated on the subrogation clause contained in the policy.

"12. SUBROGATION

In the event of any payment under this policy, the company shall be subrogated to all the insured's rights of recovery therefor against any person or organization and the insured shall execute and deliver instruments and papers and do whatever else is necessary to secure such rights. The insured shall do nothing after loss to prejudice such rights." (Emphasis added)

Hockelberg refused to sign the subrogation agreement. After her suit against Smith and Hennis was dismissed she renewed her demand on Farm Bureau but to no avail. Consequently, the present action arose.

Two issues have been raised on appeal:

(1) whether the trial court erred in rendering summary judgment against Hockelberg; and

(2) whether the trial court erred in failing to designate the issues upon which it found no genuine issue of a material fact.

Hockelberg contends that the summary judgment order was erroneous because there was no proof that her release of Smith and Hennis prejudiced the subrogation rights of Farm Bureau. Citing American Automobile Fire Ins. Co. v. Spieker (1933), 97 Ind.App. 533, 187 N.E. 355, she speculates that if the tortfeasors had notice of Farm Bureau's subrogation interest before the release was executed then such release would not impair Farm Bureau's right of subrogation. This argument is flawed. Spieker merely held:

"If the tort-feasor, with knowledge that the insurer has already made payment to the insured, makes settlement with him and thus obtains a release, it will not be a defense as against the insurer in enforcing its rights as subrogee." (Emphasis added) 187 N.E. at 356.

The Spieker rationale is inapposite here because Farm Bureau had not paid Hockelberg for her medical bills prior to the time the tortfeasors had settled with her. Accordingly, the issue of their knowledge would never come into play.

Hockelberg also surmises that the tortfeasors might waive the...