Home Ins. Co. v. Dearing
| Decision Date | 20 April 1970 |
| Docket Number | No. 5--5247,5--5247 |
| Citation | 452 S.W.2d 852,248 Ark. 574 |
| Parties | HOME INSURANCE COMPANY, Appellant, v. Mrs. P. M. DEARING, Appellee. |
| Court | Arkansas Supreme Court |
Terral, Rawlings, Matthews & Purtle, Little Rock, and Schieffler & Murray, West Helena, for appellant.
Daggett & Daggett, by James R. Van Dover, Marianna, for appellee.
On May 14, 1967, appellee and one J. Q. Floyd were involved in an automobile collision, while each was driving his own vehicle. Appellant carried the collision insurance on Floyd's vehicle. Floyd instituted a suit to recover from appellee for his personal injuries and for damage to his motor vehicle. After settlement negotiations between the attorneys for the parties, Floyd's attorney advised appellee's attorney by letter dated November 21, 1967, that Floyd would amend his complaint to eliminate any claim for damages to his automobile and then accept appellee's settlement offer of $6,000. In concluding, this attorney stated:
'* * * I realize that this would be an increase in your offer, and I also realize that the insurance company would probably make claim for reimbursement of subrogation, but this is the basis by which I feel a settlement would be reached.'
Thereupon the suggested amendment was made and a copy thereof furnished to appellee's attorney. The settlement was then concluded. An order of dismissal of Floyd's suit with prejudice was entered on November 28, 1967. Thereafter, Floyd first made claim against appellant, who paid him $2,348.83 for collision damage on January 8, 1968, when Floyd executed a proof of loss giving appellant subrogation rights against appellee. The present action was later instituted by appellant against sppellee, seeking recovery of the amount it paid Floyd. There was no allegation of fraud or collusion on the part of the parties to the settlement.
Appellee's defense of res judicata was sustained by the circuit court and appellant's complaint dismissed.
Appellant admits that res judicata would have constituted a complete defense under the principle applied in Motors Ins. Corp. v. Coker, 218 Ark. 653, 238 S.W.2d 491, except for the concluding sentence in Floyd's attorney's letter. It argues that appellee was thereby put on notice that appellant would have subrogation rights, so that our decision in Sentry Insurance Company v. Stuart, (April 21, 1969 Ark.), 439 S.W.2d 797, governs. There we said that no act of the insured releasing a wrongdoer from liability could defeat the insurer's rights when it was done without knowledge or consent of the insurer, and the wrongdoer had full knowledge of the insurer's right of...
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