Motorists Mut. Ins. Co. v. Gerson

• Decision Date: 09 November 1960
• Citation: 113 Ohio App. 321,177 N.E.2d 790
• Parties: , 17 O.O.2d 333 MOTORISTS MUTUAL INSURANCE CO., Appellant, v. GERSON, D. B. A. Nate's Distributing Co., Appellee.
• Court: Ohio Court of Appeals

Page 321

113 Ohio App. 321

177 N.E.2d 790, 17 O.O.2d 333

MOTORISTS MUTUAL INSURANCE CO., Appellant, v. GERSON, D. B. A. Nate's Distributing Co., Appellee.

Court of Appeals of Ohio, Ninth District, Lorain County.

Nov. 9, 1960.

Syllabus by the Court

A release of all claims, executed by an insured in favor of a wrongdoer, does not bar a subsequent right of recovery against the wrongdoer by the insurer, to whom a subrogation agreement has been given by the insured, where such wrongdoer knows that the insured has executed an agreement of subrogation with such insurer.

Frank W. Petrancek, Cleveland, for appellant.

Keep & Scholz, Lorain, for appellee.

HUNSICKER, Judge.

On June 30, 1958, an automobile owned by Roy Stone, but operated by his wife, Gladys Stone, was involved in a collision with a truck driven by Nathan Gerson.

Motorists Mutual Insurance Company had a policy of collision insurance with Mr. Stone, which contained a $50 deductible clause. The insurance company entered into a subrogation agreement, dated August 15, 1958, with Mr. Stone, becoming thereby subrogated to a claim against Mr. Gerson in the amount which the insurance company paid Mr. Stone in excess of $50. The sum thus paid by the insurance company for the repair of theStone automobile above the amount of $50 was $119.60.

The insurance company, pursuant to its rights under the contract of subrogation, filed an action against Mr. Gerson to recover the sum of $119.61. Mr. Gerson said, by way of defense, in addition to a denial of liability for any negligence claimed by the insurance company, that Mr. Stone, for the sum of $50, had signed a release of all claims to his automobile arising out of the collision of June 30, 1958.

The action by the insurance company against Mr. Gerson was filed on July 9, 1959, and residence service was had on July 10, 1959. The release by Mr. Stone to Mr. Gerson is not dated. There is no testimony that it was signed on or prior to July 10, 1959. The trial court determined that the collision occurred by reason of the negligence of Mr. Gerson.

The trial court rendered a judgment against the insurance company, setting forth, in a conclusion of fact and conclusion of law filed in this case, that:

'3. As a matter of law the release executed by Roy Stone released all further claims of Roy Stone and the plaintiff now having no further right to recovery then Roy Stone is barred from recovery in the premises.'

The question before us in this appeal on questions of law is, whether a full and complete release, executed by an insured in favor of a wrongdoer, bars any subsequent right of recovery against the wrongdoer by the insurer on a subrogation claim executed by the insured in favor of his insurer. We are not herein concerned with any possible action against the insured by the insurer, based upon a claim of breach of the contract of insurance.

There is no claim that a fraud has been committed by Mr. Gerson in obtaining the release from Mr. Stone, and there is no evidence that a fraud has been committed by the parties to this release. Mr. Stone testified that: an insurance man came to see him about the settlement; he was interested only in getting paid the balance due him for the repair of his automobile above the amount paid by his insurer; he did not know much about the release, except that he was paid $50; his wife told him to sign the release, which he did; and, he does not know the date when it was signed.

We, as individuals, may have some question as to the ethics of the insurance company that secured from Mr. Stone the release now claimed as a bar to this action by Motorists Mutual Insurance Company, yet we cannot indulge in speculation or guess as to what occurred between Mr. Stone and Mr. Gerson's insurer, except as is found in the general release of all ciaims signed by Mr. Stone. So far as the record shows, none of the parties knew what the other was doing with reference to the various claims.

It is, however, significant that the amount of the Gerson settlement was for the amount of the deductible portion of the insurance policy carried by Mr. Stone--to Wit, $50. The insured, by receiving from Mr. Gerson $50, and from the insurer, Motorists Mutual Insurance Co., $119.61, has been thus indemnified fully for only his actual loss, and not for a sum over and beyond the claimed loss.

It may thus be argued that the release given by Stone to Gerson for a consideration of $50 was only to be effective for the loss in excess of the insurance carried by Stone, and that the right of the insurance company to proceed to collect the balance of the loss was not barred because of this release.

The Supreme Court of Ohio said, in Holibaugh v. Cox, 167 Ohio St. 340, 148 N.E.2d 677, 678:

'2. Where the total damages to an insured, resulting from the commission of a tort, exceed the amount for which he has been reimbursed by his insurer, such insured may...