United States Fidelity & Guaranty Co., 86-LW-3740
| Decision Date | 30 September 1986 |
| Docket Number | L-85-377,86-LW-3740 |
| Parties | UNITED STATES FIDELITY & GUARANTY COMPANY, Appellant, v BUCKEYE UNION INSURANCE COMPANY, et al., Appellees. |
| Court | Ohio Court of Appeals |
Appeal from Toledo Municipal Court
DECISION AND JOURNAL ENTRY
This case is here on appeal from the Toledo Municipal Court wherein the court granted appellees' motion for summary judgment.
The relevant facts are as follows:
On October 30, 1984, plaintiff, United States Fidelity & Guaranty Company, filed a complaint against defendants, Buckeye Union Insurance Company and Underwriters Adjusting Company. The complaint alleged the following: plaintiff issued a policy for medical insurance to Nelva Putnam; on or about October 17, 1980, plaintiff's insured, Nelva Putnam, was involved in an automobile collision with Thomas Moore; the collision was caused by Moore's negligence; Fidelity paid Putnam the sum of $2,072.87 for injuries sustained; subsequent to the reimbursement, Fidelity gave written and verbal notice of its subrogation claim to Moore's insurer, defendant, Buckeye Insurance, through its agent, defendant, Underwriters; and defendants failed to honor the subrogation claim.
On December 21, 1984, defendants filed a motion to dismiss pursuant to Civ.R. 12(B)(6), alleging (1) failure to commence the action within the applicable statute of limitations; and (2) failure to state a claim upon which relief can be granted insofar as R.C. 3929.06 had not been satisfied, and since plaintiff's insured executed a full and final release. On January 16, 1985, plaintiff submitted a memorandum in opposition to the motion. The trial court denied the motion. On March 18, 1985, defendants submitted an answer and a third-party complaint, admitting only Putnam's involvement in a vehicular collision, and further alleged the defenses of failure to join necessary parties, failure to state a claim upon which relief can be granted, failure to bring the action in a timely fashion, and failure to meet the conditions specified in R.C. 3929.06. The defendants further brought a third-party claim against Putnam alleging failure to abide by the release.
On June 27, 1985, plaintiff filed a motion for summary judgment, claiming that defendants were liable as a matter of law; an insurer-subrogee may bring a direct suit against a tortfeasor's insurance company where the tortfeasor's insurance company has notice of subrogation interests. Plaintiff attached a copy of a letter written by a Fidelity claims adjuster to Buckeye, notifying Buckeye of plaintiff's subrogation interests. Plaintiff also submitted an affidavit by Marilyn Graybill, another claims adjuster. Graybill stated that from October 1981 through April 1983, she made numerous telephone calls to a Buckeye insurance adjuster, reminding him of Fidelity's subrogation rights. She also wrote a letter inquiring about when Fidelity could expect payment of its subrogation claim.
On July 10, 1985, defendants submitted an amended answer, alleging the defense of release.
On July 15, 1985, defendants filed a motion for summary judgment, arguing that under Ohio law, an insurer may not enforce subrogation rights in a direct action against the tortfeasor's insurer. Defendants further argued that recovery was barred by the applicable statute of limitations. Defendants submitted an affidavit from Thomas G. Moore. In pertinent part, Moore stated that he had never been named as a defendant in any lawsuit brought by Fidelity. Moore also claimed "at no time was I notified by United States Fidelity & Guaranty Company, of the existence of any rights claimed by them to exist in their favor, arising from the aforementioned collision." Defendants also submitted an affidavit from Robert C. Beach, claims adjuster for defendants. Beach stated he knew of no agreement between Buckeye to pay Fidelity an amount equal to the sums it paid Putnam as reimbursement for medical expenses.
On September 17, 1985, the trial court granted defendants' motion for summary judgment. The factual finding may be summarized as follows:
Fidelity was the insurer of Putnam who was injured in an automobile accident caused by the negligence of Thomas G. Moore; Buckeye was the insurer of Moore; the accident occurred on October 17, 1980; on May 5, 1985, when Fidelity paid its insured for medical expenses incurred, Fidelity became subrogated to any claims its insured had; Fidelity notified Buckeye of its subrogation interests on August 31, 1981; on or about March 14, 1983, Buckeye, through its agent, negotiated a settlement with Putnam; and Putnam executed a full and final release.
The trial court basically concluded that no Ohio case or statute allows a direct action of recovery by a subrogee insurance company against insurers of a tortfeasor under the circumstances of this case.
Plaintiff Fidelity appealed and now asserts the following assignments of error:
Essentially two questions are before this court: (1) under circumstances may a subrogee insurance company recover reimbursement expenses paid its insured after a full and final release has been executed, and (2) when does the statute of limitations begin to run on the subrogation claim.
Ohio case law recognizes that a subrogee insurance company may recover the subrogated amount from a tortfeasor who settles the claim of a party injured by his act and executes a release with full awareness of the fact that the claim has been subrogated. See Hartford Co. v. Elliott (1972), 32 Ohio App.2d 281; Motorists Mutual Insurance Co. v. Gerson (1960), 113 Ohio App. 321; Dubose v. Lowe (M.C.1963), 23 Ohio Ops.2d 373. According to Hartford, supra, at the syllabus, "A tortfeasor who settles the claim of a party injured by his act with full awareness of the fact that the claim has been subrogated is liable to the subrogee for the amount paid out by such subrogee." In Hartford, supra, at 282, the insurer paid the medical expenses incurred by its insured in an automobile collision. Pursuant to a subrogation provision contained in the policy, the insurer became subrogated in the amount expended and thereafter placed the tortfeasor and the tortfeasor's insurance carrier on notice of its subrogation claim. The tortfeasor's insurance carrier settled with the insured, refusing to recognize or pay the subrogation claim. In Motorists, supra, the court came to the same conclusion:
"A release of all claims, executed by an insured in favor of a wrongdoer, does not bar a subsequent right of recovery against the wrongdoer by the insurer, to whom a subrogation agreement has been given by the insured, where such wrongdoer knows that the insured has executed an agreement of subrogation with such insurer."
As in Hartford, supra, in Motorists, supra, the subrogee insurance company sued the alleged tortfeasor. The tortfeasor had obtained a release from the subrogee insurance company's insured. Although no witness testified that the tortfeasor knew of the subrogation rights when he obtained the release, the court concluded that such knowledge could be inferred from the surrounding circumstances. The court concluded the following:
"[F]rom an examination of all the facts in this case, the only conclusion that can be reached is that the wrongdoer, Mr. Gerson, or his insurance representative, had full knowledge of all the facts concerning...
To continue reading
Request your trial