Travelers Ins. Co. v. Lutz

• Decision Date: 15 October 1964
• Docket Number: No. 414168,414168
• Citation: 210 N.E.2d 755,3 Ohio Misc. 144
• Parties: , 32 O.O.2d 469 TRAVELERS INS. CO. v. LUTZ.
• Court: Ohio Court of Common Pleas

Page 144

3 Ohio Misc. 144

210 N.E.2d 755, 32 O.O.2d 469

TRAVELERS INS. CO. v. LUTZ.

No. 414168.

Akron Municipal Court, Ohio.

Oct. 15, 1964.

Michael L. McGowan, Akron, for plaintiff.

Edward H. Corbett, Akron, for defendant.

REED, Judge.

Plaintiff insurance company alleges that it was subrogated to medical payments made by it to one Frances Jean Walker, wife of insured; that Frances Jean Walker executed a subrogation agreement whereby she assigned her claim against defendant third-party tort-feasor to plaintiff.

The demurrer is based on several grounds, some of which are based on decisions made in comparative antiquity and in days long before the frantic automobile age. These grounds may be summarized as follows:

1. There is no fund capable of assignment until judgment.

2. That such an assignment is in derogation of the common law and cannot be made assignable without specific authorization of the Legislature.

3. Such an assignment is against public policy.

The court will now discuss these grounds of demurrer in order.

In the past it has been frequently stated that it is impossible to make an assignment of an action to recover for personal injuries. See 40 A.L.R.2d 502:

'It seems that few legal principles are as well settled, and as universally agreed upon, as the rule that common law does not permit assignments of causes of action to recover for personal injuries.'

See Pennsylvania Co. v. Thatcher, 78 Ohio St. 175, 85 N.E. 55, in which the first paragraph of the syllabus is:

'An equitable assignment to an attorney, of an interest in the proceeds of a compromise of a cause of action in tort, cannot be enforced in a suit at law at the instance of the assignee against the tort-feasor only. The P., C., C. & St. L. Ry. Co. v. Volkert et al., 58 Ohio St., 362 , approved and followed.'

In 1953, Section 2305.21, Revised Code was passed. It provides that causes of action for injuries to person or property shall survive and such actions may be brought notwithstanding the death of the person entitled or liable thereto.

As late as 1960, in the case of Goings v. Black, Ohio Com.Pl., 164 N.E.2d 925, the Common Pleas Court of Franklin County has indicated that it accepted the basic premise that actions for injury to person or property are assignable although obviously not assignable at common law. The court goes on to state that in Ohio decisions on contingent fees to attorneys are upheld, not as assignments in law but merely as equitable assignment which cannot be enforced in a suit at law. The court in this case held that an assignment of a contingent fee to a disbarred attorney could not be upheld as it would permit the disbarred attorney to represent himself and in effect permit him to represent a client.

The court cannot consider that this is a ruling against contingent fee contracts together with assignment of a portion of the claim.

In the case of P., C., C. & St. L. Ry. Co. v. Volkert, 58 Ohio St. 362, 50 N.E. 924, an assignment to an attorney of one-half of a judgment was held to be valid and the defendant railroad company could not avoid liability by making a separate settlement with the assignor.

Whatever may have been the rulings of the court with reference to assignments for attorney fees, the present doctrine appears to be that subrogated insurance companies are entitled to sue in their own names for the part of a claim for damages arising out of an accident which have been assigned to them under a subrogation agreement.

In 1945 the Supreme Court in the case of Vasu v. Kohlers, Inc., 145 Ohio St. 321, 61 N.E.2d 707, 166 A.L.R. 855, ruled that the verdict for defendant in an action by a subrogated insurance company, which had been subrogated to a claim for property damage, was not a bar to an action by the assignor--insured for personal injuries. The court in the sixth paragraph of the syllabus in that case ruled as follows:

'Where an injury to person and to property through a single wrongful act causes a prior contract of indemnity and subrogation as to the injury to property, to come into operation for the benefit of the person injured, the indemnitor may prosecure a separate action against the party causing such injury for reimbursement for indemnity monies paid under such contract.'

At the same time the Supreme Court enunciated in the fourth paragraph of the syllabus of that case a doctrine which it later had to repudiate. It stated:

'Injuries to both person and property suffered by the same person as a result of the same wrongful act are infringements of different rights and give rise to distinct causes of action * * *.'

It is to be pointed out that that case clearly indicates that there is no public policy against the assignability of a tort claim with reference to that part of the tort claim which covers damages to an automobile, and the court further seems to concede that there is no problem with reference to the fact that such an assignment, being an assignment of only a portion of a claim, is purely an equitable assignment. This question is not really covered but the court seems to feel that there is no problem with reference to the assignability of the property damage part of the claim.

In that case the court discusses at great length the problem of just what is a cause of action and the court mentions that under one concept of this term, 'designated by some law writers as the pragmatic concept' the rule is that there is but one cause of action arising out of a given set of facts constituting a tort. The court further mentions the individualistic concept which is that a single tort injuring person and property gives rise to two different causes of action. The Supreme Court in that case accepts the latter view and in this way upholds the assignability of the property damage claim as a separate cause of action.

In the case of Rush v. City of Maple Heights, 167 Ohio St. 221, 147 N.E.2d 599, 75 A.L.R.2d 103, decided in 1958, the court overrules the fourth paragraph of the syllabus in Vasu v. Kohlers, Inc. by ruling that when a person suffers both personal injury and property damage as a result of the same wrongful act, only a single cause of action arises, and that the different injuries were separate items of damages from such act. The court was compelled to reach this decision with reference to a party who had filed a claim for property damage which had resulted in a judgment for the plaintiff in the amount of $100 and thereafter she attempted to file for personal injury. The court ruled that the previous adjudication between the same parties prevented further recovery on the personal injury case.

The next decisin in point of time which bears on this question is the case of American Ins. Co. v. Ellsworth Freight Lines, Inc., 113 Ohio App. 426, 178 N.E.2d 819, decided in 1960 by the Court of Appeals for Lucas County. The following rule was there summarized in the second headnote:

'Notwithstanding the rule against the splitting of causes of action, an insurer who, in compliance with his contract of insurance, has taken an assignment or become subrogated to that portion of the claim of its insured against a defendant for property damage, is not estopped to prosecute an action in its own behalf against such defendant by reason of the fact that the insured has prosecuted an action and recovered damages for personal injury against such defendant.'

In that case the court discussed Vasu v. Kohlers, Inc., supra, and Rush v. City of Maple Heights, supra, and came to the conclusion that, while Ohio has adopted the rule that both property and personal injury arising out of one tortious act constitute one cause of action, yet in the case of a subrogated...