Nationwide Ins. Co. v. Linda Russell Daniel Russell

• Decision Date: 10 June 1988
• Docket Number: 88-LW-1988,L-87-288
• Parties: NATIONWIDE INSURANCE COMPANY, Appellant, v. Linda RUSSELL, et al., Daniel Russell, Appellee.
• Court: Ohio Court of Appeals

NATIONWIDE INSURANCE COMPANY, Appellant, v. Linda RUSSELL, et al., Daniel Russell Appellee.

No. L-87-288.

88-LW-1988 (6th)

Court of Appeals of Ohio, Sixth District Lucas

June 10, 1988

Appeal From Toledo Municipal Court No. CVE 86-04243.

DECISION AND JOURNAL ENTRY

This cause is before the court on appeal from the Toledo Municipal Court, wherein judgment was rendered in favor of defendants-appellees, Linda and Daniel Russell. Having timely filed a notice of appeal, appellant, Nationwide Insurance Company, asserts the following assignment of error:

"I.The trial court's grant of judgment for Defendants Linda and Daniel Russell was against the manifest weight of the evidence.

"A.The trial court erred in overlooking the undisputed testimony of the Defendant and in imposing a stricter standard of proof than the law requires.

"B.The trial court erred in allowing Defendants to be unjustly enriched."

For the following reasons, we find this assignment of error not well-taken.

Daniel Russell was injured in an automobile accident in February 1985. As the insurer of Mr. Russell, appellant paid Russell $2,000 [hereinafter, the "medical payment"] after the accident. Following this medical payment by appellant, appellees received $18,000 from Rick D. Hartschuh, an individual whose involvement in this case is left relatively unexplained. In exchange for the $18,000, appellees executed a release discharging Hartschuh from any claim arising from the February 1985 accident. Appellant thereafter sued appellees, seeking reimbursement of the medical payment. Appellant's complaint alleged that appellees were contractually bound to reimburse appellant under the terms of appellant's insurance policy. The action proceeded to a trial before the bench. Finding in favor of appellees, the trial court reasoned that appellant was estopped from enforcing the reimbursement provision within the policy against appellees because appellant did not prove by a preponderance of the evidence that appellees had notice of the pertinent policy provision.

The whole of appellant's arguments is fashioned around the contention that the trial court found that appellant did not become subrogated to appellees. Assuming, arguendo, that the trial court made such a finding, we hold that it was erroneous. Subrogation is the right of the insurer to be put in the position of the insured in order to pursue recovery from the third party legally responsible to the insured for a loss paid by the insurer. E.g. Aetna Cas. & Sur. Co. v. Hensgen (1970), 22 Ohio St.2d 83, 90. Subrogation arises by operation of law; i.e., the insurer's right to subrogation is created when the insurer pays the insured for his loss. Norwich Union Fire Ins. Society v. Stang (1897), 18 Ohio C.C. 464. Contained within the record of the instant case is appellant's exhibit A, a standardized form for Nationwide Insurance entitled "PROOF OF CLAIM AND SUBROGATION AGREEMENT" [hereinafter, the "proof agreement"]. Mr. Russell testified below that he substantially completed and submitted the form after the February 1985 accident in order to receive insurance benefits from appellant. In the enumerated spaces provided on the form for itemization of claimed expenses, Mr. Russell wrote amounts totalling $6,174.83. He also wrote, "There are more bills but don't have on hand," and "still taking physical therapy 3 times [a] week [at] $60.00 [a] visit." Upon submission of this form, appellant paid appellee $2,000 for his loss. Under the law of subrogation, the payment of this money legally entitled appellant to pursue the recovery of the same amountfrom any third party legally responsible to Mr. Russell for his loss. See Pacific Fire Ins. Co. v. Wyatt (App.1940), 35 Ohio Law Abs. 336.

Even if we assume that the trial court made an erroneous finding regarding subrogation, this error alone is not grounds sufficient for reversal. "In order to support reversal of a judgment, the record must show affirmatively not only that error intervened but that such error was to the prejudice of the party seeking such reversal." Smith v. Flesher (1967), 12 Ohio St.2d 107, paragraph one of the syllabus (citation omitted). A finding by this court that the trial court reached the correct decision will vitiate any assertion of prejudice because it remains this court's duty to affirm correct judgments, notwithstanding any fault that an appellant might find with the reasoning used by a trial court. Economy Fire & Cas. Co. v. Craft General Contr. Inc. (1982), 7 Ohio App.3d 335, 337.

Appellant contends that the finding of subrogation determines this appeal and its action against appellees. We do not agree. The determinative issue in the instant case is whether appellees are obligated to reimburse appellant for the medical payment because appellees released a putative tortfeasor after receiving benefits from their insurer. We find that the judgment below answered this issue negatively. It is asserted in this appeal that the trial court's judgment is against the manifest weight of the evidence. "Judgments supported by some competent, credible evidence going to all the essential elements of the case will not be reversed by a reviewing court as being against the manifest weight of the evidence." C.E. Morris Co. v. Foley Constr. Co. (1978), 54 Ohio St.2d 279, syllabus. Accordingly, our task in the case sub judice is to ascertain whether competent, credible evidence supports the trial court's judgment that appellant is not entitled to recover the medical payment from appellees.

Appellant contends that it has both equitable and contractual rights to recover from appellees. We begin by considering appellant's contractual claim. Appellant submitted two evidentiary items to support its claim of contractual entitlement to reimbursement. The first is the proof agreement, which provides in pertinent part that

"[claimant] hereby assign[s] and transfer[s] to [appellant] each and all claims and demands against any person, persons, firm or corporation arising from or connected with such loss or damage to the extent of the amount paid."

Regardless of the rights and duties usually created under this language, we find in this case that a valid assignment was not created. An assignment is a contract "subject to the same requisites as to validity as other contracts." 6A Corpus Juris Secundum (1975) 593, Assignments, Section 4. Our review of the record finds...