State Ins. Fund v. Taron

• Decision Date: 25 November 1958
• Docket Number: No. 38022,38022
• Citation: 1958 OK 282,333 P.2d 508
• Parties: The STATE INSURANCE FUND, a Department of State, Plaintiff in Error, v. Lelia B. TARON, Defendant in Error.
• Court: Oklahoma Supreme Court

Page 508

333 P.2d 508

1958 OK 282

The STATE INSURANCE FUND, a Department of State, Plaintiff in Error, v. Lelia B. TARON, Defendant in Error.

No. 38022.

Supreme Court of Oklahoma.

Nov. 25, 1958.

Rehearing Denied Dec. 16, 1958.

Syllabus by the Court

1. In an action brought by an insurance carrier against a third party to recover an amount paid by it under an order entered by the State Industrial Commission awarding compensation in favor of an employee and against his employer and its insurance carrier for an injury sustained by reason of the wrongful act or negligence of said third party, on the theory that said insurance carrier under Tit. 85 O.S.1951 § 44 is subrogated to the rights of said employee, the insurance carrier's action is governed by the two year statute of limitation relative to personal injury, Tit. 12 O.S.1951 § 95, subd. 3, rather than the three year statute of limitation, Tit. 12 O.S.1951 § 95, subd. 2, relative to an action based on liability created by statute.

2. Indemnity is a right which enures to a person who has discharged a duty which is owed by him but which as between himself and another should have been discharged by the other, and it implies a primary liability in one person, although a second person is also liable to a third party and some benefit must have accrued to the indemnitor, the person primarily liable.

3. The statute of limitation applies to the State Insurance Fund in an action brought by it arising out of the management and the administration of its insurance business to the same extent as to any other private insurance carrier.

Appeal from the District Court of Pottawatomie County; J. Knox Byrum, Judge.

From an order sustaining defendant's demurrer to plaintiff's petition and dismissing plaintiff's cause of action, plaintiff appeals. Affirmed.

Mont R. Powell, Fred Albert, Oklahoma City, Moraul Bosonetto, Sapulpa, for plaintiff in error.

Pierce, Mock & Duncan, Oklahoma City, for defendnat in error.

BLACKBIRD, Justice.

In this case it appears that on the 21st day of August, 1954, while in the employ of the City of Shawnee, Leon Wellman sustained an accidental injury caused by a collision between an automobile driven by Lelia B. Taron and one driven by him; that the collision was caused by the alleged negligence of Lelia B. Taron. On the 27th day of November, 1956, Wellman elected to take compensation for the injury under the Workmen's Compensation Law and on said date executed an assignment to the State Insurance Fund assigning his cause of action against Lelia B. Taron to it. The assignment was executed under the provisions of Tit. 85 O.S.1951 § 44. This section provides:

'If a workman entitled to compensation under this Act be injured by the negligence or wrong of another not in the same employ, such injured workman shall, before any suit or claim under this Act, elect whether to take compensation under this Act, or to pursue his remedy against such other. Such election shall be evidenced in such manner as the Commission may by rule or regulation prescribe. If he elects to take compensation under this Act, the cause of action against such other shall be assigned to the insurance carrier liable for the payment of such compensation, and if he elects to proceed against such other person or insurance carrier, as the case may be, shall contribute only the deficiency, if any, between the amount of the recovery against such other person actually collected, and the compensation provided or estimated by this Act for such case. The compromise of any such cause of action by the workman at any amount less than the compensation provided for by this Act shall be made only with the written approval of the Commission, and otherwise with the written approval of the person or insurance carrier liable to pay the same.'

Wellman thereafter filed a claim for compensation against the City of Shawnee and the State Insurance Fund and under order entered by the Commission on November 28, 1956, was awarded compensation against the City of Shawnee and the State insurance Fund in the sum of $3,850 and in addition thereto the Fund paid medical expenses for the treatment of Wellman in the sum of $1,373 and two per cent tax to the Special Indemnity Fund, making total payments in the sum of $5,300, which amount has been fully paid by the Fund.

On the 10th day of April, 1957, the State Insurance Fund brought an action against Lelia B. Taron, the third party causing the injury, to recover the amount paid and in its petition alleged the above facts and in addition thereto alleged that the automobile accident above referred to was caused by the negligence of defendant Lelia B. Taron and specifically pleaded the act of negligence relied upon and prayed judgment against defendant for the sum of $5,300.

The trial court sustained defendant's demurrer to plaintiff's petition on the ground that plaintiff's cause of action was barred by limitation and entered judgment against plaintiff dismissing its cause of action.

Plaintiff appeals and assigns this ruling as error.

It is plaintiff's contention that its cause of action is based on a liability created by statute other than a forfeiture or penalty and therefore that it had three years after its cause of action accrued within which to file its claim, citing Tit. 12 O.S.1951 § 95, subd. 2.

It further contends that its cause of action under the above section of the statute did not accrue until Wellman, claimant in the compensation case, elected to take compensation under the Workmen's Compensation Act; that the election was made and the assignment executed on the 27th day of November, 1956; that its action was filed on the 10th day of April, 1957, and was therefore filed in time; and that the trial court erred in sustaining defendant's demurrer to its petition.

Defendant contends that the State Insurance Fund, after having obtained the assignment from Wellman and after it had paid the compensation awarded, was, under the statute, merely subrogated to the right of Wellman; that it stood in his shoes; that his right was that of bringing an action against Taron to recover damages for personal injuries sustained; that had Wellman brought the action he would have been required under Tit. 12 O.S.1951 § 95, subd. 3, to bring it within two years after the accident occurred, and that since the State Insurance Fund, upon obtaining the assignment from Wellman, was merely subrogated to his right, it had no better right than he; that its right was only a right to bring an action against Taron to recover damages sustained by Wellman because of Taron's negligence in causing his injuries and accordingly it was also required to file its action within two years after the injury occurred; that having failed to do so, its action is barred.

In support of its contention plaintiff cites Limited Mutual Compensation Ins. Co. v. Billings, 74 Cal.App.2d 881, 169 P.2d 673; Aetna Casualty & Surety Co. v. Bechtel Corp., Cal.App., 251 P.2d 762. These cases held the three year statute of limitations as to liabilities created by statute, West's Ann.Code Civ.Proc. § 338, rather than the one year statute of limitations as to personal injury actions, West's Ann.Code Civ.Proc. § 340, was applicable to statutory action by employer against third party tort-feasor for injuries to employee. However, the Supreme Court of California held otherwise. It held that the one year statute of limitations as to personal injury actions was applicable to statutory action by insurance carrier against third party tort-feasor for injuries to employee of insured, rather than the three year statute of limitations as to liability created by statute. Aetna Casualty and Surety Co. v. Pacific Gas & Electric Co., 41 Cal.2d 785, 264 P.2d 5, 41 A.L.R.2d 1037. The California statute however is so materially different from section 44 of our Statute, supra, as to render the California decisions of no aid in arriving at a solution in this case.

Defendant cites numerous authorities in support of her...