Weatherly v. Flournoy

• Decision Date: 10 September 1996
• Docket Number: No. 85495,No. 1,85495,1
• Citation: 929 P.2d 296
• Parties: 1996 OK CIV APP 109 Thomas Mac WEATHERLY, as Personal Representative of the Estate of Clara Bell Weatherly, Appellee, v. Lovada FLOURNOY a/k/a Lovada K. Birch, an individual, Appellant. Court of Appeals of Oklahoma, Division
• Court: United States State Court of Criminal Appeals of Oklahoma. Court of Civil Appeals of Oklahoma

Page 296

929 P.2d 296

1996 OK CIV APP 109

Thomas Mac WEATHERLY, as Personal Representative of the Estate of Clara Bell Weatherly, Appellee, v. Lovada FLOURNOY a/k/a Lovada K. Birch, an individual, Appellant.

No. 85495.

Released for Publication by Order of the Court of Appeals of Oklahoma, Division No. 1.

Court of Appeals of Oklahoma Division No. 1.

Sept. 10, 1996.

Certiorari Denied Nov. 5, 1996.

John A. Gladd, William F. Smith, Gail W. Harris, J. Derek Hardberger, Gladd, Smith & Harris, P.A., Tulsa, for Appellant.

Richard A. Shallcross, Brewster Shallcross & De Angelis, Tulsa, for Appellee.

OPINION

BUETTNER, Judge:

Appellee Thomas Mac Weatherly sued Appellant Lovada Flournoy in negligence for the wrongful death of his wife. After trial, the jury rendered a verdict against Lovada Flournoy and in favor of Thomas Mac Weatherly, personal representative of his deceased spouse's estate, in the amount of $203,000.00. The trial court entered judgment on the verdict. After trial, Flournoy filed motions to stay execution and to settle journal entry, both grounded on her position that the judgment should be reduced, or set-off, by $200,000.00, the amount Weatherly had received from his own insurance company under his uninsured/underinsured motorist coverage. The trial court denied the motion to stay because Flournoy failed to post the bond required to stay execution of the judgment. The trial court also denied Flournoy's request for a $200,000.00 credit against the judgment.

Appellant Flournoy contends that the trial court erred because (1) the collateral source rule does not apply to uninsured/underinsured motorist coverage; (2) Weatherly was not the real party in interest; and (3) it awarded double compensation for the same tort. We disagree with Flournoy's contentions and affirm the judgment and order of the trial court.

STANDARD OF REVIEW

The three propositions of error are questions of law. We review them de novo, without deference to the trial court's legal rulings. Kluver v. Weatherford Hospital Authority, 859 P.2d 1081, 1084 (Okla.1993).

COLLATERAL SOURCE RULE

In Denco Bus Lines v. Hargis, 204 Okla. 339, 229 P.2d 560 (1951), Hargis sued the bus company for injuries she sustained when the bus in which she was riding collided with another bus. While she was recuperating from her injuries, her employer paid her medical benefits. She sued the bus company and was awarded damages. The bus company sought a set-off of the amount of the employer paid medical benefits, stating that 23 O.S. 1941 § 61 defined the measure of damages for a tort as such amount as will compensate for all the detriment proximately caused thereby. In its syllabus, the Denco Bus Lines court held:

Upon commission of a tort it is the duty of the wrongdoer to answer for the damages wrought by his wrongful act, and that is measured by the whole loss so caused and the receipt of compensation by the injured party from a collateral source wholly independent of the wrongdoer does not operate to lessen the damages recoverable from the person causing the injury.

Id. 229 P.2d at 561. When an injured person receives payment for injuries from a source not connected with the tortfeasor, the tortfeasor is still liable for the full statutory amount, whatever that is determined to be. Payment to the injured party by an independent source does not operate to reduce or mitigate the amount for which the tortfeasor is liable. This is the collateral source rule.

Unless the damage payment is made by the tortfeasor or someone on his behalf, such payments are from a collateral source and cannot "inure to the benefit of defendant, nor lessen the damage recoverable from him and evidence of the reimbursement is inadmissible." Porter v. Manes, 347 P.2d 210, 212 (Okla.1959).

In Chambers v. Walker, 653 P.2d 931 (Okla.1982), the uninsured motorist carrier, relying on a clause in its contract which allowed a set-off against any workers' compensation benefits its insured received, sought reduction in the amount of its coverage. The Chambers court recognized the unfairness of permitting an insurer to deny to an insured the benefit of a certain type of coverage for which the insured had paid premiums. Citing 36 O.S.Supp.1979 § 3636(E), the Chambers court stated that since "the intention of the legislature is so clear that payments made by a tort-feasor should not diminish the injured party's recovery under his own policy, it is even more likely that the set-off of benefits recovered from a collateral source would be prohibited." ¹ Id. at 935. The Chambers court found that the contract clause reducing the amount of uninsured motorist payments by the amount paid by workers' compensation void as violative of legislation in favor of uninsured motorist coverage and because such a set-off could render the uninsured motorist coverage lower than the amount required by statute.

Oklahoma has applied the collateral source rule when medical benefits were paid by an employer who was found to be liable for the employee's injuries. In Handy v. City of Lawton, 835 P.2d 870 (Okla.1992), an off-duty police officer accidently shot and wounded a fellow off-duty officer. Judgment was awarded against City of Lawton for damages and it wanted to off-set the amount by the employer-sponsored medical insurance benefits paid to the wounded officer. The court found that set-off was not proper because if the "fund is for general hospital and medical coverage upon which the insured may make a claim without regard to liability on the part of the employer, the policy is a fringe benefit, and is part of the employee's income. The collateral source rule prohibits a set-off of benefits received thereunder by the employee." ² Id. at 874.

Oklahoma also recognizes that subrogation rights of the insurer are not relevant to the tortfeasor. In Dippel v. Hunt, 517 P.2d 444, 448 (Okla.App.1973), the court stated that "when the smoke of controversy clears away much can be said for the notion that it is really none of the tortfeasor's concern what rights might exist between the tortfeasor's victim and the latter's own insurance carrier, save to avoid subjection to more than one judgment--an event not possible under existing decisional law."

Based on the development of the collateral source rule in Oklahoma, and having reviewed the law of other jurisdictions, we find that a tortfeasor may not set-off any amount he is found to owe the injured party by any amount the injured party may have received from his own uninsured/underinsured motorist policy. ³ The tortfeasor should not benefit from a policy held and paid for by the injured party.

REAL PARTY IN INTEREST

For her second allegation of error, Flournoy contends that Weatherly is not the real party in interest because his interest was subrogated to the uninsured/underinsured motorist insurance carrier. The record reveals, however, that the parties stipulated that the insurance carrier, who paid Weatherly the limits of its policy, $200,000.00 waived its statutory right of subrogation. 36 O.S. 1991 § 3636(E). Oklahoma does not allow assignment of torts. Dippel v. Hunt, 517 P.2d 444, 447 (Okla.App.1973). The injured party is the real party in interest.

Even under Flournoy's argument, upon settlement or judgment, the UM carrier would have been entitled to recover its $200,000.00 payment from its insured pursuant to 36 O.S.1991 § 3636(E)....