Public Serv. Co. of Okl. v. BLACK & VEATCH, CONSUL. ENG.,
| Decision Date | 16 June 1971 |
| Docket Number | Civ. No. 69-C-51. |
| Citation | 328 F. Supp. 14 |
| Parties | PUBLIC SERVICE COMPANY OF OKLAHOMA, a Domestic Corporation, et al., Plaintiffs, v. BLACK & VEATCH, CONSULTING ENGINEERS, a Partnership, Defendant. |
| Court | U.S. District Court — Northern District of Oklahoma |
Joseph Sharp, Best, Sharp, Thomas & Glass, Tulsa, Okl., for plaintiffs.
Paul McBride, and B. W. Tabor, of Rucker & Tabor, Tulsa, Okl., for defendant.
The Plaintiff Public Service Company of Oklahoma (Public Service) sued the Defendant Black & Veatch, Consulting Engineers, A Partnership, (Black & Veatch) for damages claiming that one of its turbines was damaged because of the negligence of said Defendant in designing the same. Said Plaintiff had received payments for most but not all of its claimed loss on the turbine from several insurance companies. The case was therefore initially prosecuted by the Plaintiff Public Service alone for itself for its uncovered and unpaid part of the total loss and as trustee for the several insurance companies for their payments on the total loss.
The Defendant Black & Veatch moved to add all of said insurance companies as additional parties Plaintiff pursuant to Rule 17(a), F.R.Civ.P., 28 U.S.C.A. The Court granted the Motion by Order filed herein on December 12, 1969 under the authority of Gas Service Co. v. Hunt, 183 F.2d 417 (Tenth Cir. 1950).
Then recently the Defendant learned that it was a named insured in the insurance policies of three of said added Plaintiff insurance companies under which payments were made to the Plaintiff Public Service for part of its loss. These three insurance companies are: Great American Insurance Company, Phoenix Insurance Company and National Surety Company. The Defendant now moves to dismiss these three Plaintiff insurance companies from the case and to reduce Plaintiff's overall prayer by $24,000, which is the total amount the said three insurance companies paid to Plaintiff Public Service on its loss to its turbine. The Plaintiffs oppose the Motion.
The three insurance policies are similar if not identical and are entitled "Property Floater Policy". The named insureds were: Public Service Company of Oklahoma, Austin Building Corporation and Black & Veatch, Engineers, as their interest may appear. The policies insure against physical loss of or damages to the insured property. The policies disclose that the insured property was Plaintiff Public Service's Southwestern Station Unit No. 3 () and an Installation Floater was a part of each policy which provided coverage, "* * * on any and all materials, equipment, machinery and supplies to be used in the construction of and to be installed in Southwestern Station Unit No. 3 * * *." Another endorsement provided, "It is agreed that this policy, subject to all its terms, conditions and exclusions shall also cover contractors and subcontractors as co-assureds * * *". The insurance policies were for the term of September 16, 1965 to September 16, 1967.
It is further asserted (and not disputed) that both Austin Building Company and Black & Veatch were involved at and with the said Unit No. 3 in the construction and work being done in the same and the turbine included therein and had some of their own materials, equipment, machinery and supplies at the said Unit.
It appears to be the Defendant's contention regarding its motion under consideration that the three insurance companies above mentioned cannot recover from it because it was a named insured in each of their policies and therefore the right of subrogation against it does not exist in favor of said insurance companies. The Plaintiffs respond by asserting that the three-named insureds were named as insureds only as their interests may appear in the total insured property and as the property damaged (the turbine of the Plaintiff Public Service) belonged exclusively and solely to the Plaintiff Public Service, subrogation does exist in favor of the said three insurance companies and they can recover from the Defendant if it is shown that Defendant's negligence in designing Plaintiff's turbine caused the damage and loss.
Considerable research has been done by the attorneys and the Court without finding any case precisely like the situation above outlined.1 The heart of the problem appears to be the right of subrogation, that is, are the three insurance companies entitled to be subrogated to the position of the Plaintiff Public Service and allowed to recover against the Defendant for Defendant's alleged negligence in design which damaged the property of the Plaintiff Public Service notwithstanding that the Defendant is also a named insured on the three insurance policies as its interest may appear in the insured property? No bar is believed to exist against the right of the Plaintiff Public Service to sue and recover from the Defendant for any negligence on its part which damaged such Plaintiff's property notwithstanding their being co-insureds on an insurance policy covering said property.
Subrogation is legal or equitable (by operation of law) or conventional (by contract). Jorski Mill & Elevator Co. v. Farmers Elevator Mut. Ins. Co., 404 F.2d 143 (Tenth Cir. 1968). Subrogation has been described as an equitable right to be enforced or not according to dictates of equity and good conscience. Commercial Union Fire Insurance Co. v. Kelly, 389 P.2d 641 (Okl. 1964). The three insurance policies involved had contractual subrogation clauses as follows:
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...the first issue. 7. See Turner Constr. Co. v. John B. Kelly Co., 442 F.Supp. 551 (E.D.Pa.1976); Public Service Co. of Oklahoma v. Black & Veatch Consul. Eng'rs, 328 F.Supp. 14 (N.D.Okla.1971); Paul Tishman Co. v. Carney & Del Guidice, Inc., 36 A.D.2d 273, 320 N.Y.S.2d 396 (1971); Willis Rea......
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