Manokoune v. State Farm Mut. Auto. Ins. Co.

• Decision Date: 10 October 2006
• Docket Number: No. 101,241.,101,241.
• Citation: 145 P.3d 1081,2006 OK 74
• Parties: Sarah MANOKOUNE, Individually, and as Mother and Next Friend of Vichai Chansombatt, a minor, Plaintiff/Appellant, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Diron Ahlquist, Belinda Lunsford, and Equity Insurance Company, Defendants/Appellees, and Stephen D. Richardson, Defendant.
• Court: Oklahoma Supreme Court

145 P.3d 1081

2006 OK 74

Sarah MANOKOUNE, Individually, and as Mother and Next Friend of Vichai Chansombatt, a minor, Plaintiff/Appellant, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Diron Ahlquist, Belinda Lunsford, and Equity Insurance Company, Defendants/Appellees, and Stephen D. Richardson, Defendant.

No. 101,241.

Supreme Court of Oklahoma.

October 10, 2006.

Certiorari to Court of Civil Appeals Division III.

¶ 0 The mother of an injured minor passenger brought this action to enforce their settlement agreement with one insurance company over another insurance company's assertion of a subrogation interest. The District Court of Oklahoma County, Honorable Vicki Robertson, granted summary judgment in favor of the insurance companies. We conclude that the district court erred because there are disputed material facts regarding the enforceability of the subrogation interest.

CERTIORARI PREVIOUSLY GRANTED; COURT OF CIVIL APPEALS' OPINION VACATED; DISTRICT COURT'S JUDGMENT REVERSED; AND MATTER REMANDED FOR FURTHER PROCEEDINGS.

Robert T. Keel, Oklahoma City, OK, for Plaintiff/Appellant.

David V. Jones and Bruce A. Robertson, Jones, Andrews & Ortiz, P.C., Oklahoma City, OK, for Defendants/Appellees, State Farm Mutual Automobile Insurance Company and Diron Ahlquist.

Robert W. Hayden, Speck & Hayden, Oklahoma City, OK, for Defendants/Appellees, Belinda Lunsford and Equity Insurance Company.

COLBERT, J.

¶ 1 Plaintiff Sarah Manokoune, individually and in her capacity as the mother of the minor Vichai Chansombatt,¹ has petitioned for this Court's review of an opinion by the Court of Civil Appeals affirming a summary judgment granted by the district court in favor of Defendants, State Farm Mutual Automobile Insurance Company and Diron Ahlquist (jointly, State Farm) and Equity Insurance Company and Belinda Lunsford (jointly, Equity).² The dispositive issue in this action arising out of Equity's assertion of a right of subrogation in a settlement paid by State Farm to Vichai is whether there are material facts in dispute such that the district court erred in granting summary judgment. We conclude that there are, vacate the Court of Civil Appeals' opinion, reverse the district court's summary judgment, and remand for further proceedings.

BACKGROUND AND PROCEDURAL HISTORY

¶ 2 On April 30, 2002, 15-year-old Vichai was injured when the vehicle in which he was riding was involved in an accident with a vehicle driven by Stephen D. Richardson. Richardson, whose vehicle was insured by State Farm, was at fault. The vehicle in which Vichai was riding was insured by Equity, but neither Vichai nor Plaintiff were members of the policyholder's household or had seen the Equity policy.

¶ 3 Plaintiff incurred expenses of $3,891 for Vichai's medical treatment and sought reimbursement from Equity. In a letter dated August 2, 2002, Equity informed Plaintiff of the coverage available under the policy. Although the letter specified several conditions Equity would impose on any payment made under the policy, it did not mention that the policy reserved Equity's right to be subrogated to any recovery Plaintiff or Vichai might have against Richardson or State Farm. On August 12, 2002, Equity issued a draft for $3,891 payable to Plaintiff. Again, there was no mention that Equity would assert a subrogation interest.

¶ 4 In a letter dated September 3, 2002, Equity notified State Farm that it had determined that Richardson was at fault for the accident and requested that State Farm reimburse Equity for the payment it had made for Vichai's medical expenses. In a second letter dated September 9, 2002, Equity again notified State Farm of its subrogation claim and stated that no one could release this interest except Equity's representative. A third letter on October 8, 2002, reiterated Equity's subrogation claim and clarified that Vichai was not Equity's policy-holder.

¶ 5 In the meantime, State Farm sent a letter on September 18, 2002, to Plaintiff's attorney to confirm its settlement offer of $6,891. The letter did not disclose the right of subrogation Equity had already asserted. Plaintiff accepted the offer on Vichai's behalf.

¶ 6 Because Vichai was a minor, the parties filed a friendly suit in the District Court of Oklahoma County, Case No. CJ-2002-8499, to obtain court approval of the settlement. The petition, prepared by State Farm, confirmed that the parties had agreed to settle Vichai's claim against State Farm for $6,891. The petition noted that Plaintiff was "obligated to pay medical expenses incurred to date by the minor plaintiff and [would] incur additional medical expenses in the future." At the hearing, the judge questioned the medical expenses and both parties confirmed that no medical expenses would be paid out of the settlement. State Farm did not disclose Equity's subrogation claim to Plaintiff or to the court. The court approved the settlement and entered an order to disburse the settlement proceeds which reflected the parties' representations: $0 for medical expenses; $966 for Vichai's use; $1,852.45 for attorney fees and expenses; and $4,072.55 to be placed in a trust account until Vichai's 18th birthday. The order also directed Plaintiff's and Vichai's attorney to deliver a certified copy of the order to the banking institution where the trust account was placed.

¶ 7 The draft issued by State Farm and given to Plaintiff at the conclusion of the hearing was made payable to Plaintiff, Vichai, their attorney, and Equity. Neither Plaintiff nor her attorney noticed Equity's name until the attorney unsuccessfully attempted to deposit the draft in compliance with the court's order. When the attorney contacted Equity and State Farm, he was informed for the first time about Equity's subrogation claim. Also for the first time, Equity produced a copy of the policy language addressing subrogation. Equity refused to endorse the draft or release its subrogation claim and State Farm refused to reissue the draft without Equity's name.

¶ 8 Plaintiff filed this lawsuit on December 13, 2002, against Richardson, State Farm, and Equity based on the following theories of recovery: specific performance as to Richardson; conspiracy to tortiously interfere with a settlement agreement as to Equity; conversion as to State Farm and Equity; and fraud and deceit as to State Farm. Equity filed a counterclaim for its subrogation interest. Following Richardson's dismissal for lack of service, State Farm and Equity both filed motions for summary judgment. The trial court granted both motions, resulting in a judgment in Equity's favor for $3,891.

¶ 9 Plaintiff appealed and the Court of Civil Appeals affirmed. After the Court of Civil Appeals denied her motion for rehearing, Plaintiff filed a petition for certiorari with this Court. We have previously granted certiorari and proceed now to the merits of Plaintiff's petition.

STANDARD OF REVIEW

¶ 10 Summary judgment is proper only when the moving party presents evidentiary materials establishing that all of the uncontroverted facts and all of the inferences that can be drawn from those uncontroverted facts support only one conclusion: that the party seeking judgment is entitled to it as a matter of law under all of the legal theories raised by the uncontroverted facts and inferences. See Wathor v. Mut. Assurance Adm'rs, Inc., 2004 OK 2, ¶ 4, 87 P.3d 559, 561; Hadnot v. Shaw, 1992 OK 21, ¶ 25, 826 P.2d 978, 987.

DISCUSSION

¶ 11 In her petition for certiorari, Plaintiff contends that the Court of Civil Appeals erred in its analysis of several issues. Equity and State Farm have both argued that some of Plaintiff's arguments are foreclosed because she failed to raise them until she sought rehearing from the Court of Civil Appeals. Plaintiff, however, has consistently argued that Equity wrongfully asserted, with State Farm's assistance, a right of subrogation against the settlement she entered on Vichai's behalf with State Farm. Because there are disputed material facts regarding the existence and/or enforceability of Equity's subrogation right, summary judgment was in error. Any issues Plaintiff should have raised at an earlier point in the proceedings are merely ancillary to this central issue.

¶ 12 Equity's policy language was clearly intended to reserve Equity's right to be subrogated to any recovery by Plaintiff or Vichai from State Farm.

OUR RIGHT TO RECOVER PAYMENT

A. If we make a payment under this policy and the person to or for whom payment was made has a right to recover damages from another, we shall be subrogated to that right. That person shall do:

1. Whatever is necessary to enable us to exercise our rights; and

2. Nothing after loss to prejudice them.

* * *

B. If we make a payment under this policy and the person to or for whom payment is made recovers damages from another, that person shall:

1. Hold in trust for us the proceeds of the recovery, and

2. Reimburse us to the extent of our payment.

This form of subrogation is permitted by statute. 36 O.S.2001 § 6092.

¶ 13 The dispositive issue, however, is not whether Equity intended to or could establish a right of subrogation, but whether the undisputed facts lead to the inescapable conclusion that it actually did establish such a right as a matter of law. Only if that threshold issue was established could the court have properly considered either party's motion for summary judgment. The evidentiary material submitted by the parties creates a dispute as to whether Equity had a right of subrogation enforceable against the settlement Plaintiff reached with State Farm. Because that material fact is disputed, the trial court should not have granted summary judgment.

¶ 14 At a minimum, Equity did not establish that Plaintiff had notice of the claimed subrogation right. There is no dispute that Plaintiff had no actual notice of Equity's subrogation claim. Although neither of the lower courts considered the issue of...