Silva v. Home Indem. Co., 78-207-A

• Decision Date: 01 July 1980
• Docket Number: No. 78-207-A,78-207-A
• Citation: 416 A.2d 664
• Parties: Donna M. SILVA et al. v. The HOME INDEMNITY CO. et al. v. Louis M. PUCINO. ppeal.
• Court: Rhode Island Supreme Court

Page 664

416 A.2d 664

Donna M. SILVA et al. v. The HOME INDEMNITY CO. et al. v. Louis M. PUCINO.

No. 78-207-Appeal.

Supreme Court of Rhode Island.

July 1, 1980.

Quinn, Cuzzone & Geremia, Cameron P. Quinn, Providence, for plaintiffs.

Gunning, LaFazia & Gnys, Inc., Netti C. Vogel, Providence, for The Home Indemnity Co., et al.

Delphis R. Jones, North Kingstown, for Louis M. Pucino.

OPINION

WEISBERGER, Justice.

The plaintiffs Manuel J. Silva and Donna M. Silva were respectively the owner and operator of a motor vehicle that was involved in an accident on January 14, 1975, with a vehicle operated by the defendant Joseph Pucino and owned by the third-party defendant Louis Pucino, both of whom were allegedly uninsured. Plaintiff Manuel Silva was covered by an insurance policy issued by the defendant Home Indemnity Company, which policy, among other coverages, afforded protection against injuries caused by uninsured motorists. The plaintiff Ernest Moreira was a passenger in the Silva vehicle at the time of the accident. Plaintiffs Donna Silva and Ernest Moreira sought recovery against defendant Home Indemnity Company for personal injuries, and plaintiff Manuel Silva sought recovery for damage to his motor vehicle. The injury to person and property allegedly arose out of the negligence of the uninsured operator, Joseph Pucino, who was alleged at the time of the filing of the complaint to be both owner and operator. As a result of the propounding of interrogatories, Joseph Pucino disclosed, on or about August 16, 1976, that the owner of the motor vehicle that he was driving on the date of the accident was Louis M. Pucino (not then a party to the suit).

The original action was brought in the District Court and was tried on April 18, 1978. A District Court justice entered judgment on behalf of Donna Silva against defendant Home Indemnity Company and defendant Joseph Pucino in the amount of $4,000 plus interest and costs. Judgment in the same amount was entered on behalf of plaintiff Ernest Moreira against defendants Home Indemnity Company and Joseph Pucino. The claim for property damage filed by plaintiff Manuel Silva was not pursued, and no judgment was entered in respect to that claim. Judgment was entered on behalf of Home Indemnity Company on its cross-claim against codefendant Joseph Pucino in the full amount of the judgments against Home Indemnity Company. On April 20, 1978, defendant Joseph Pucino claimed an appeal to the Superior Court and demanded a trial by jury. Subsequently, on April 26, 1978, defendant Home Indemnity Company filed a third-party complaint against Louis M. Pucino seeking recovery for amounts it might be required to pay plaintiffs. The third-party defendant Louis M. Pucino was served with process on May 5, 1978. Thereafter, he filed a motion to dismiss the third-party action on the ground that it was barred by the statute of limitations since the third-party complaint was brought more than three years after the date of the accident. ¹ On May 15, a Superior Court justice granted the motion to dismiss. This appeal by third-party plaintiff Home Indemnity Company ensued. The requirements of Rule 54(b) of the Superior Court Rules of Civil Procedure were satisfied by entry of an order by another justice of the Superior Court which directed the entry of a final judgment on this third-party claim.

The sole issue raised by this appeal is whether the claim of Home Indemnity Company (Home) against Louis Pucino (Louis) is barred by the three-year statute of limitations. Home argues that it has a right of indemnity against Louis, pursuant to which its right of action would not arise until payment "discharging the common liability has been made." Home further asserts that indemnity actions would be governed by a six-year statute rather than the three-year statute of limitations applicable in actions for personal injuries. See Helgerson v. Mammoth Mart, Inc., 114 R.I. 438, 335 A.2d 339 (1975). Louis argues that Home's right is not based upon principles of indemnity but is solely premised upon its contractual right of subrogation under which it is subject to all of the rights and disabilities which would relate to an action brought by its insured, including statutory limitations upon personal-injury actions.

In this state the right of indemnity is preserved by statute, G.L.1956 (1969 Reenactment) § 10-6-9. We have recognized that although the right to indemnity traditionally arose from a contract, express or implied, modern law indicates a trend to allow indemnity on the basis of equity for example, when one person is exposed to liability by the wrongful act of another in which he does not join. Helgerson v. Mammoth Mart, Inc., 114 R.I. at 441, 335 A.2d at 341. Indemnity has been defined in the Restatement of Restitution § 76 at 331 (1936) as arising under the following circumstances:

"A person who, in whole or in part, has discharged a duty which is owed by him but which as between himself and another should have been discharged by the other, is entitled to indemnity from the other, unless the payor is barred by the wrongful nature of his conduct."

The Restatement, however, in its comment, specifically states that

"(t)he rule does not apply to a payment by a person who guarantees or insures another against a payment for which the guarantor or insurer is not himself liable since the duty of indemnity and the right to subrogation of such persons are wholly dependent upon the contract or agreement with the other." Id. comment b. at 332.

The Restatement goes on to illustrate the existence of a right of indemnity between surety and principal, between an accommodation endorser and the maker of a promissory note, and between a shareholder who has paid creditors of a corporation and the corporation itself. In addition to the foregoing situations, a right of indemnity may arise between master and servant, when the servant's negligent conduct has caused the master to become liable to a third party. Id. § 96 at 418-19.

Because an insurance contract is a contract of indemnity, the right of the insurer against a tortfeasor may sometimes be referred to loosely as a right of indemnity. This theory, however, was rejected by the Supreme Court of the United States in St. Louis Iron Mountain & Southern Railway v. Commercial Union Insurance Co., 139 U.S. 223, 235, 11 S.Ct. 554, 557, 35 L.Ed. 154, 157 (1891), in which Mr. Justice Gray observed:

"In fire insurance, as in marine insurance, the insurer, upon paying to the assured the amount of a loss of the property insured, is doubtless subrogated in a corresponding amount to the assured's right of action against any other person responsible for the loss. But the right of the insurer against such other person does not rest upon any relation of contract or of privity between them. It arises out of the nature of the contract of insurance as a contract of indemnity, and is derived from the assured alone, and can be enforced in his right only. By the strict rules of the common law, it must be asserted in the name of the assured; in a court of equity or of admiralty, or under some state codes, it may be asserted by the insurer in his own name; but in any form of remedy the insurer can take nothing by subrogation but the rights of the assured; and if the assured has no right of action, none passes to the insurer."

A similar question was presented in Great American Insurance Co. v. United States, 575 F.2d 1031 (2d Cir. 1978), where an insurer which had paid a claim for damage done to an apartment brought an action under the Federal Tort Claims Act alleging that such damage was caused by the negligence of United States marshals. The action was dismissed because the two-year statute of limitations had run prior to the commencement of the action against the United States. In that case, as in the case at bar, the insurance company claimed that its cause of action did not arise under its alleged right of indemnity until the claim was paid to its insureds. In response to this argument, the Court of Appeals for the Second Circuit observed:

"The theory is admittedly novel. There is not a single reported case in American jurisprudence cited by appellant or discovered by this court which holds that upon an insurance carrier's payment to its insured, the insurer becomes vested with a claim arising out of an implied contract of indemnity with the tortfeasor who caused the damage necessitating payment by the carrier to the insured. On the contrary, the authorities and cases unanimously hold that the insurer's recovery is premised exclusively upon subrogation which, while equitable in nature, is also expressly provided for in the insurance contract here. ²

"The Standard Fire Insurance Policy itself is, of course, a contract of indemnity, but it runs between Great American and its named insureds. The United States is not a party to that contract of indemnity and the insurer's right as a compensated indemnitor to recover the loss it has incurred is fixed by the policy's subrogation clause, which in effect makes Great American an assignee subject to whatever defenses the tortfeasor may have against the insured." Id. at 1033-34.

The court went on to hold that the insurer...