Mills v. Farmers Ins. Exchange

• Decision Date: 10 December 1964
• Citation: 231 Cal.App.2d 124,41 Cal.Rptr. 650
• Parties: Guy G. MILLS, Cross-Complainant and Appellant, v. FARMERS INSURANCE EXCHANGE, Cross-Defendant and Respondent. Civ. 21660.
• Court: California Court of Appeals Court of Appeals

Page 650

41 Cal.Rptr. 650

231 Cal.App.2d 124

Guy G. MILLS, Cross-Complainant and Appellant, v. FARMERS INSURANCE EXCHANGE, Cross-Defendant and Respondent.

Civ. 21660.

District Court of Appeal, First District, Division 3, California.

Dec. 10, 1964.

Mullally & McCorkindale, Oakland, for appellant.

Schofield & Cunningham, Oakland, for respondent, Richard G. Logan, Oakland, of counsel.

DEVINE, Justice.

The problem in this case is whether an insurance company which has paid claims under an uninsured motorist clause might, under the law as it existed from 1959 until its amendment in 1961, recover the amount paid against a party legally responsible for the accident, other than the uninsured motorist. The facts of the accident and of the actions taken by various parties since that time are without dispute, for present purposes, because the cause had not gone beyond the pleading and motion stages before judgment was rendered.

On February 5, 1961, Dennis A. Brever, accompanied by his wife, Rosemary, was driving his automobile on a highway in a northerly direction. The car was struck by a vehicle coming from the north, driven by Charles Jones, and by a vehicle from the south, driven by Guy G. Mills. Mr. Brever was killed and his wife was injured. Jones was uninsured but Mills was insured. An action for wrongful death was brought by Mrs. Brever and her children, and an action for her injuries was brought by Mrs. Brever against Jones. Mills was not joined as a defendant. He was a close friend of Mrs. Brever and she did not wish to sue him, but some months later she joined him as a defendant, on the insistence of her own carrier, Farmers Insurance Exchange. Farmers paid $10,000 for the wrongful death of the husband and $1,000 for Mrs. Brever's injuries, pursuant to uninsured motorist coverage, but required Mrs. Brever to sign a trust agreement in which she promised to take whatever action was necessary or appropriate to recover damages from any person who might be legally liable therefor, through any representative designated by Farmers.

With the court's permission, Mills filed a cross-complaint, bringing in Farmers as cross-defendant and asking a declaration of his rights and an injunction against Farmers from proceeding with the Brever case against Mills. Demurrer to the cross-complaint as amended was sustained, and the amended cross-complaint was dismissed by the court. From this order Mills appeals. Mills makes the point that the court should have declared his rights because of his application for declaratory relief, but this point is not particularly important because both sides are willing to have the law declared for them on this appeal.

The Original Statute and Its Amendment

The original statute relating to uninsured motorists was section 11580.2 of the Insurance Code, enacted by chapter 817 of the 1959 Statutes of California. This section was repealed by chapter 1189 of the 1961 Statutes of California, and a new section was added which contains several important additions and which changes the numbering and lettering of subdivisions. Under the 1959 statute, the subdivision relating to subrogation reads as follows: '(e) An insurer paying a claim under an uninsured motorist endorsement or coverage shall be entitled to be subrogated to the rights of the insured to whom such claim was paid against the person causing such injury to death to the extent that payment was made.' (Stats.1959, p. 2837. Emphasis added.) In the 1961 statute, the subrogation subdivision reads: '(f) The insurer paying a claim under an uninsured motorist endorsement or coverage shall be entitled to be subrogated to the rights of the insured to whom such claim was paid against any person causing such injury or death to the extent that payment was made.' (Stats.1961, p. 2923. Emphasis added.) In both versions of the statute, it is provided that uninsured motorist coverage 'does not apply * * * (c) * * * (3) To bodily injury of the insured with respect to which [such, the] insured or his representative shall, without the written consent of the insurer, make any settlement with or prosecute to judgment any action against any person who may be legally liable therefor.' (Stats.1959, p. 2836; Stats.1961, p. 2923. Emphasis added. The bracketed word was 'such' in the 1959 version, and 'the' in the 1961 version.)

Contentions of Appellant

Appellant contends that because subdivision (e) of the 1959 statute refers to subrogation against the person causing the injury, the statute as it then was referred to the uninsured motorist only, and that subrogation was not then granted as against anyone else. He argues (1) that the provision for subrogation is in derogation of the common law, and therefore the statute must be strictly construed; (2) that applying strict construction, we must regard 'the person' referred to in subdivision (e) as being the owner or operator of an uninsured vehicle, because under subdivision (a) the benefits of the required uninsured motorist coverage are the 'damages for bodily injury from the owner or operator of an uninsured motor vehicle'; and (3) that the change in description from 'the person' to 'any person,' made in 1961, shows that under the 1959 statute the right of subrogation was limited to apply to a single person, the uninsured motorist.

Our Decision and Our Reasons

We conclude that appellant's position cannot be maintained.

1. It has been held that subrogation does not apply to tortious injury to the person except in cases where such right of subrogation has been expressly granted by statute. (Fifield Manor v. Finston, 54 Cal.2d 632, 7 Cal.Rptr. 377, 354 P.2d 1073, 78 A.L.R.2d 813; Peller v. Liberty Mutual Fire Ins. Co., 220 Cal.App.2d 610, 612, 34 Cal.Rptr. 41), but this does not mean that a statute which does create a right of subrogation should be construed in a way which would defeat its fair import. We note that the cases cited by appellant, applying strict construction of statutes (Weber v. Pinyan, 9 Cal.2d 226, 229, 70 P.2d 183, 112 A.L.R. 407; Cook v. Superior Court, 12 Cal.App.2d 608, 611, 55 P.2d 1227), refer to statutes creating a new liability...