Southern Indiana Gas and Elec. Co. v. Indiana Ins. Co.

• Decision Date: 19 December 1978
• Docket Number: No. 1-278A44,1-278A44
• Citation: 178 Ind.App. 505,383 N.E.2d 387
• Parties: SOUTHERN INDIANA GAS AND ELECTRIC COMPANY and the City of Evansville, Defendants-Appellants, v. INDIANA INSURANCE COMPANY, Clifford Grassman and Victor Grassman, Plaintiffs-Appellees.
• Court: Indiana Appellate Court

Page 387

383 N.E.2d 387

178 Ind.App. 505

SOUTHERN INDIANA GAS AND ELECTRIC COMPANY and the City of Evansville, Defendants-Appellants, v. INDIANA INSURANCE COMPANY, Clifford Grassman and Victor Grassman, Plaintiffs-Appellees.

No. 1-278A44.

Court of Appeals of Indiana, First District.

Dec. 19, 1978.

Robert H. Hahn, Bamberger, Foreman, Oswald & Hahn, Evansville, [178 Ind.App. 507] for Southern Ind. Gas & Elec. Co

Timothy R. Dodd, Cox & Mitchell, John C. Cox, Evansville, for City of Evansville.

Robert E. Rheinlander, Newman, Trockman, Flynn & Rheinlander, Evansville, for plaintiffs-appellees.

LOWDERMILK, Judge.

STATEMENT OF THE CASE

Defendants-appellants Southern Indiana Gas and Electric Company (Southern) and the City of Evansville (City) appeal after a jury awarded $19,850 to plaintiffs-appellees Indiana Insurance Company (Indiana) and Clifford Grassman and Victor Grassman (the Grassmans).

FACTS

The home of the Grassmans, located in Evansville, was destroyed by an explosion and fire which occurred December 19, 1972. Indiana paid the Grassmans a total of $16,650 for their loss. The Grassmans and Indiana brought suit against Southern, which had a gas line located in front of the Grassmans' home, and against City, which had a sewer line and a water line located in front of the Grassmans' home. The jury returned a verdict in favor of Indiana and the Grassmans and awarded damages in the amount of $19,850 against Southern and City.

ISSUES ¹

1. Is the evidence insufficient to support the judgment because Indiana failed to introduce into evidence its policy of insurance with the Grassmans?

2. Did the trial court err when it gave instructions on the doctrine of res ipsa loquitur ?

3. Did the trial court err when it read Instruction No. 6, dealing with the duty of Southern to inspect its lines and investigate any dangerous condition?

4. Is the evidence sufficient to sustain the award of $19,850 as damages?

5. Did the trial court err in admitting certain evidence?

DISCUSSION AND DECISION

Issue One

Southern states its first issue as follows:

"Whether an insurance company may recover a judgment against a tortfeasor merely on proof of payment to its insured without evidence of the terms of the insurance policy and its obligation to pay."

Southern argues that

". . . any right of Indiana of subrogation must be predicated upon an obligation to pay the Grassmans. Inasmuch as the policy was never produced there is no evidence in the record that Indiana had an obligation to pay."

In support of its argument Southern cites Home Owners' Loan Corp. v. Henson, (1940) 217 Ind. 554, 29 N.E.2d 873; National Mutual Insurance Co. v. Maryland Casualty Co., (1963) 136 Ind.App. 35, 187 N.E.2d 575; and Kamarata v. Hayes Freight Lines, Inc., (1952) 123 Ind.App. 222, 108 N.E.2d 723. In general, these three cases are authority for the proposition that a person who, without obligation or compulsion, makes a voluntary payment to or on behalf of another person is not entitled to subrogation. Southern insists that "(a)n insurance company cannot recover where it has paid a loss absent proof of the contract and its obligation to pay." In support of its contention Southern cites Security Insurance Co. v. Mangan, (1968) 250 Md. 241, 242 A.2d 482.

Having carefully read the opinion in Security Insurance, supra, we must conclude that the case on which Southern relies provides little support for its argument.

The Maryland court recognized "subrogation by assignment." In footnote number seven, at page 485 of 242 A.2d, the Maryland court wrote:

"In our view, it would be preferable to regard subrogation by assignment as a form of conventional subrogation since Recovery is based on the assignment. Cf. Alexander v. Fidelity & Deposit Co., 108 Md. 541, 70 A. 209 (1908)." (Our emphasis)

A proof of loss was introduced into evidence in the case at bar. That proof of loss, signed by the insureds, includes the following paragraph:

"In consideration of and to the extent of said payment, the undersigned hereby assigns and transfers to the said company (Indiana), all rights, claims, demands, and interests which the undersigned may have against any party through the occurrence of such loss and authorizes said company to sue, compromise or settle, in the name of the undersigned or otherwise, all such claims and to execute and sign releases and acquittances in the name of the undersigned." (Our insertion)

Accordingly, the evidence in the case at bar would seem to satisfy the Maryland court in Security Insurance Co. v. Mangan, supra. More importantly, the evidence satisfies the Indiana court. In Employers' Fire Insurance Co. v. Consolidated Garage & Sales Co., (1927) 85 Ind.App. 674, 155 N.E. 533, the insurance company paid the insured for damage caused to an automobile and took an assignment from insured of his right of action against the tortfeasor to recover the amount of damages paid by insurance company. At 85 Ind.App. 688, at 155 N.E. 538, appears the following statement:

"Whether the insurance policy issued by appellant covered the loss of the automobile was a question for appellant and the owner of the automobile to settle. With that question, appellee is not interested and has nothing to say. . . . Indeed, it was not necessary for appellant to allege or prove the issuance of the policy of insurance or the payment of the loss to the insured. The only facts appellant was required to allege and prove were facts showing a cause of action in favor of the insured and an assignment of such cause of action to appellant. If the cause of action was founded on the equitable doctrine of substitution or subrogation, the rule would be different." (Citations omitted)

Indiana proved facts showing a cause of action in favor of the insureds and the assignment of such cause of action to Indiana to the extent of the payment made by Indiana to the Grassmans. Indiana had no obligation to introduce the insurance policy into evidence.

Issue Two

Southern contends that the trial court committed reversible error when it read to the jury two instructions on the doctrine of Res ipsa loquitur. ²

Southern objected to the instructions for the following reasons: (1) the evidence shows that the area where the various utility lines were located was not under the exclusive control of Southern; (2) the instructions imply that Southern and City shared joint control of the gas, water, and sewer lines; (3) no evidence was introduced to create an inference that a gas explosion does not occur in the absence of negligence.

In W. Prosser, Handbook of the Law of Torts § 39 (4th ed. 1971), appear the following statements:

"It is never enough for the plaintiff to prove merely that he has been injured by the negligence of someone unidentified. Even though there is beyond all possible doubt negligence in the air, it is still necessary to bring it home to the defendant. On this too the plaintiff has the burden of proof by a preponderance of the evidence; and in any case where it is clear that it is at least equally probable that the negligence was that of another, the court must direct the jury that the plaintiff has not proved his case. The injury must either be traced to a specific instrumentality of cause for which the defendant was responsible or it must be shown that he was responsible for all reasonably probable causes to which the accident could be attributed. . . .

This element usually is stated as meaning that the defendant must be in 'exclusive control' of the instrumentality which has caused the accident. . . . " (Footnotes omitted)

Prosser offers the following warning concerning "control":

". . . 'Control,' if it is not to be pernicious and misleading, must be a very flexible term. It must be enough that the defendant has the right or power of control, and the opportunity to exercise it, as in the case of an owner who is present while another is driving his car, or a landowner who permits visitors to come on his premises. It is enough that he is under a duty which he cannot delegate to another, as in the case of a surgeon who allows a nurse to count the sponges. . . ." (Footnotes omitted; our emphasis)

Regarding multiple defendants, Prosser explains:

"Some quite intricate questions arise where the plaintiff proceeds against two or more defendants. Unless there is vicarious liability Or shared control, the logical rule usually is applied, that the plaintiff does not make out a preponderant case against either of two defendants by showing merely that he has been injured by the negligence of one or the other. . . ." (Footnotes omitted; our emphasis)

Both Southern and Indiana discuss the case of Metz v. Central Illinois Electric & Gas Co., (1965) 32 Ill.2d 446, 207 N.E.2d 305. Metz brought suit against Gas Company for damage to the Metz home caused by a gas explosion. In 1948 Gas Company installed a gas main along the south side of the street on which Metz resided. In 1955 City installed a water main along the north side of the street and ran a water service pipe under the street and gas main, to a shutoff valve in front of the residence of Metz. Metz hired a contractor to install a service pipe between the shutoff valve and his home. The residence was destroyed by the gas explosion March 18, 1962. Investigation revealed that the explosion was caused by gas which leaked from the main as a result of a break in the gas main at the point near its intersection with the water service pipe.

Gas Company argued against the applicability of the doctrine of Res ipsa loquitur because the gas main was located under a public street and because the area had been disturbed in 1955 by the installation of the water system. The Supreme Court of Illinois held, however, that the element of control was present.

". . . The usual requirement that the accident-causing instrumentality must be under the exclusive control of the defendant doesn't mean actual physical control at the time of the...