Washington Fire & Marine Ins. Co. v. Hammett

• Decision Date: 13 April 1964
• Docket Number: No. 5-3226,5-3226
• Citation: 377 S.W.2d 811,237 Ark. 954
• Parties: WASHINGTON FIRE & MARINE INSURANCE COMPANY et al., Appellants, v. Floetta HAMMETT, Appellee.
• Court: Arkansas Supreme Court

Page 811

377 S.W.2d 811

237 Ark. 954

WASHINGTON FIRE & MARINE INSURANCE COMPANY et al., Appellants, v. Floetta HAMMETT, Appellee.

No. 5-3226.

Supreme Court of Arkansas.

April 13, 1964.

Rehearing Denied May 11, 1964.

Frank Lady, Jonesboro, for appellants.

W. B. Howard and Jack Segars, Jonesboro, for appellee.

GEORGE ROSE SMITH, Justice.

The appellee brought this suit for a declaratory judgment. See seeks to determine whether her attorney, W. B. Howard, is entited to charge the appellant, her automobile collision insurer, an attorney's fee for having recovered the full amount of a subrogation claim held by the insurance company. This appeal is from a decree permitting Howard to retain 40% of the recovery as his fee.

In May of 1962 the appellant issued a $50 deductible policy of collision insurance to the appellee. On October 1 the appellee suffered personal injuries and property damage in a collision with Ray Purcell's car. The appellant promptly paid all but $50 of the property damage (which amounted in all to $289.94) and took a subrogation agreement from the appellee. On October 29 the appellant sent a form letter to Purcell, warning him not to settle his liability without reimbursing the insurer for its claim. On November 11 the company again wrote to Purcell, stating that if it did not hear from him within ten days it would have no alternative except to file suit. The company did not in fact bring an action or take any further steps to enforce its claim against Purcell.

On November 21 the appellee employed Howard under a contract fixing a contingent fee of 40% of any sum obtained by compromise settlement. Howard filed suit against Purcell on February 27, 1963, seeking to recover both for his client's personal injuries and for her property damage. In March a compromise settlement was reached with Purcell's insurer. That company issued two checks, one for the personal injury claim and the other, in the amount of $289.94, for the property damage. The latter included both the appellant and the appellee as payees. This suit was filed when the parties were unable to agree upon Howard's right to a fee.

The subrogation agreement provided that the insured should do nothing after the loss to prejudice the rights of the insurer. It is now insisted that the appellee breached the contract by filing suit for the property damage and by entering into the compromise settlement.

This argument is without merit. The appellee was entitled to file the action in her own name, the insurer not being a necessary party. McGeorge Contracting Co. v. Mizell, 216 Ark. 509, 226 S.W.2d 566. Moreover, since the appellee's cause of action against Purcell could not be split, the insurer's claim for property damage would have been destroyed if Mrs. Hammett had failed to include that count in her complaint. Motors Ins. Corp. v. Coker, 218 Ark. 653, 238 S.W.2d 491. The appellant is charged with knowledge of the rule of law permitting the insured to bring an action for all the property loss. If the appellant wished to be informed of the filing of any such suit, so that it might intervene, it could have inserted such a requirement in the subrogation agreement. That was not done.

We do not perceive that the appellee's action...