Southern Ry. Co. v. Malone Freight Lines, Inc.
| Decision Date | 12 March 1985 |
| Docket Number | No. 69550,69550 |
| Citation | 330 S.E.2d 371,174 Ga.App. 405 |
| Parties | SOUTHERN RAILWAY COMPANY v. MALONE FREIGHT LINES, INC. et al. |
| Court | Georgia Court of Appeals |
Eileen M. Crowley, Lianne M. White, Atlanta, for appellant.
H. Sanders Carter, Jr., Atlanta, for appellees.
Subrogation--Rights and Limitations. These appeals arise out of a somewhat complex factual situation. In September 1981, the Purex Corp. purchased 1,300 cases of dry detergent. Purex contracted with Malone Freight Lines to transport the detergent from New York to a suburb of Atlanta. Malone in turn subcontracted with the Rankin brothers to transport the soap in the Rankin's tractor-trailer. Delbert Rankin arrived at the warehouse in Atlanta at about 2:30 a.m. on the morning of September 10, 1981. Rankin was directed to redeliver the trailer load of detergent to another warehouse nearby. Rankin proceeded from the first warehouse toward the second. He was required to drive along an access road. This road ran in a north-south direction parallel to U.S. Highway 41. Between the access road and Route 41 ran the tracks of Southern Railway. The access road paralleled the highway and railroad to the west side.
Rankin drove north to an intersecting road which crossed the access road, the railroad tracks, and ended at a "T" intersection with Route 41. He had to turn right on the intersecting road to cross the railroad tracks and approach the highway. Because of the length of his trailer, Rankin could not make a right turn without jockeying back and forth until the trailer would clear a stop sign at the corner of the intersection of the north-south access road and the east-west intersecting road. According to Rankin, during this turn he had a view of the railroad tracks both north and south and saw no train. After navigating the turn to the right, Rankin drove to about 15 feet of the tracks and stopped. He once again looked up and down the tracks and saw nothing coming.
However, Rankin was aware that the traffic was heavy on Route 41 and a stop sign at Route 41 precluded him from proceeding directly from the intersecting road onto Route 41. Rankin proceeded across the tracks and stopped at the stop sign at Route 41. By this time because of the sleeper portion of his cab, he could not see the north or south to the rear and sides of the tractor. Approximately 40 feet of the trailer extended over and across the tracks. Before Rankin could pull his tractor-trailer into Route 41, a train operated by an employee of Southern Railway rounded a bend in the tracks approximately 300-400 yards south of where Rankin sat in his tractor. The train was unable to stop in time and cut Rankin's trailer in half, destroying the trailer and effectively destroying the detergent as a deliverable item. Rankin filed a claim for the loss of the trailer with his insurer, Empire Fire & Marine Ins. Co. An evaluation of the trailer (which was only 10 days old at the time of its destruction) placed the value at $11,000. Empire paid Rankin full market value less a $500 deductible and took an assignment of the claim. According to the liability established for interstate carriers, Malone was liable to Purex for Purex' loss of detergent. Malone negotiated the value of the detergent and paid Purex $10,382.41 as the fair value of the loss. Malone salvaged some of the detergent and sold it for $3,500.
Rankin brought suit against Southern for the loss of his trailer. At the motion of Southern that Rankin was not the real party at interest, the trial court dismissed Rankin as the plaintiff and substituted Empire. Malone was allowed to intervene as an essential party. Thus at the time of trial, Southern was defendant in a suit by Empire and Malone both as subrogated plaintiffs. Southern filed a counterclaim against Rankin for damages to its engine allegedly caused by Rankin's negligent blockage of the railway tracks.
In addition to the suits for damages on the value of the trailer and the detergent, Empire incurred costs of $700 for towing away the trailer. Malone incurred additional costs for cleaning up the area and recovering the spilled detergent. Relying on the provisions of OCGA § 46-1-2(b), Empire sought exemplary damages in addition to compensatory damages. Relying on OCGA § 46-2-90, both Empire and Malone sought attorney fees. The jury returned verdicts against Southern and in favor of Empire and Malone. Empire won verdicts of $11,000 compensatory damages ($500 reserved for Rankin as reimbursement of the deductible), exemplary damages in the amount of $1,004.13, and attorney fees of $5,000. Malone was awarded $7,343 compensatory damages and $5,000 attorney fees. The jury found against Southern on its counterclaim.
Southern brings this appeal enumerating as error that neither Empire nor Malone was entitled to attorney fees; that Empire was not entitled to exemplary damages; and that Malone had not established the value of the detergent by competent, admissible evidence. In essence these enumerations are involved in the giving or failing to give requested charges which highlight the legal issues involved. Held:
1. Our resolution of the issues involved in this case must start with the examination of the statutes giving rise to the causes of action. OCGA § 46-1-2(c) provides in pertinent part that "(c) Any railroad ... may be sued by anyone whose ... property has been injured by such railroad ... for the purpose of recovering damages for such injuries...." The pertinent part of subsection (b) provides: "(b) In actions against railroad companies for recovery of damages for any wrong or injury inflicted by such companies ... provided that in cases of willful violation of law, such railroad companies shall be liable for exemplary damages." OCGA § 46-2-90 provides in part:
It is clear that the combined intent of these two statutes is to provide for the recovery of compensatory and exemplary damages as well as attorney fees for the tortious infliction of property damages upon the owner or possessor of property where the damage is inflicted as the result of a wilful act. See Lamb v. Howard, 145 Ga. 847, 90 S.E. 63; Poole v. City of Louisville, 107 Ga.App. 305, 307, 130 S.E.2d 157. Thus, it is an acceptable premise that both Rankin and Purex who were the "victims" of the alleged tortious negligence of Southern's engineer could have sued for the compensation of their out-of-pocket expenses such as the value of the trailer, the storage of the trailer pending settlement, the loss of the detergent, the cost of cleanup and salvage. All these are expenses directly resulting from the alleged tortious act. But what "property" loss was suffered by Malone and Empire? Empire did not own the trailer nor was it responsible for the towing or storage of the trailer. These were the responsibilities of the actual owner, Rankin. Likewise the damage to the soap, its clean up, and salvage expenses all were the legitimate expenses of its owner, Purex. Empire was responsible for the out-of-pocket expenses concerning solely the loss of Rankin's trailer suffered by Rankin, for Empire only insured the trailer. So far as the record shows, the only out-of-pocket expense suffered by Rankin that was absorbed by Empire was the $11,000 reimbursement for the value of the trailer. Rankin paid no storage costs or attorney fees or other costs of litigation for which reimbursement was due. Likewise Malone as a subrogee to Purex paid Purex only for the value of the detergent. All other expense incurred by Malone was its own expense arising out of its litigation with Southern.
As pointed out by the parties on appeal, there are no Georgia cases directly on point as to the rights of a subrogated plaintiff when suing in his own right for losses suffered by payment of its subrogor.
Empire and Malone argue cogently that subrogation is both a legal and an equitable right. The purpose of subrogation is to substitute one person in the place of another so that the substituted party may exercise the rights of the original creditor. They argue therefore that the substitute is put in all respects in the place of the party to whose rights he is subrogated. See Liberty Mut. Ins. Co. v. Alsco Constr. Co., 144 Ga.App. 307, 308-309, 240 S.E.2d 899. The argument continues that if there can be no real dispute that Rankin was entitled to pursue a claim for exemplary damages against Southern, then Rankin's subrogee, Empire who inherited Rankin's causes of action likewise was entitled to pursue and recover exemplary damages. That claim did not just disappear. A similar argument is advanced for the recovery of attorney fees by both Empire and Malone.
Opposed to this argument by Malone and Empire, Southern argues that as subrogees Malone and Empire are entitled only to recover those payments made by Malone and Empire as a result of their obligations to repay for losses under the contract of insurance or imposed upon Malone as an interstate carrier.
While apparently there are no Georgia cases applying the two statutes involved to subrogated plaintiffs, there is a federal district court decision which has considered this question. While decisions of foreign (non-state) courts are not binding on this court, they can furnish guidelines that may be instructive and worthy of acceptance. Thus in Maryland Cas. Co. v. Brown, 321 F.Supp. 309 (N.D.Ga.1971), at p. 312, the court stated: ...
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