Northern Utilities Div. of K N Energy, Inc. v. Town of Evansville
Annotate this Case
Northern Utilities Div. of K N Energy, Inc. v. Town of Evansville
1991 WY 158
822 P.2d 829
Case Number: 89-30
Decided: 12/10/1991
Supreme Court of Wyoming
NORTHERN UTILITIES DIVISION OF K N ENERGY, INC., A KANSAS CORPORATION, APPELLANT (PLAINTIFFS),
v.
THE TOWN OF
EVANSVILLE, WYOMING, A MUNICIPAL CORPORATION; CENTRAL
CONTRACTORS CO., INC., A WYOMING CORPORATION; AND JOHN DOES II AND IV, APPELLEES
(DEFENDANTS).
Appeal from the
DistrictCourtofNatronaCounty, Daniel R. Spangler,
J.
Jeffrey C. Brinkerhoff
and C. John Cotton, Brown & Drew, Casper, for appellant.
Cameron S. Walker and
Judith A. Studer, of Schwartz, Bon, McCrary & Walker, and Robert Jerry Hand,
Hand & Hand, P.C., Casper, for appellees.
Before CARDINE,
C.J.*, THOMAS, URBIGKIT and GOLDEN, JJ.,
and ROONEY, J., Retired.
* Chief Justice at time of
oral argument.
URBIGKIT, Chief
Justice.
[¶1.] This appeal presents
tort damage derived claims for contribution, indemnity, and subrogation. At
issue is the public gas utility's status as a joint tort-feasor, its extent of
potential liability, and whether it made a settlement payment as a volunteer
after a consumer's house was blown up in a natural gas explosion. A parallel but
separate issue examines whether an amendment to the complaint under the
fictitious name rule substituting a named defendant for a "John Doe" defendant
effectively relates back to the date of the original complaint after expiration
of the statute of limitations.
[¶2.] Summary judgment in
favor of Central Contractors Company, Inc. is affirmed on the basis of statute
of limitations expiration, and the summary judgment in favor of The Town of
Evansville, Wyoming on the issues of contribution, legal subrogation,
conventional subrogation, and indemnity is reversed.
I. ISSUES
[¶3.] The public gas utility,
Northern Utilities Division of K N Energy, Inc. (NUD), sued the franchisor, The
Town of Evansville, Wyoming (Town), and the utility work contractor, Central
Contractors Company, Inc. (Central). NUD's litigation effort was ended by an
adverse summary judgment on all claims by which it attempted to recoup its
$90,000 property damage and bodily injury settlement payment. An Evansville, Wyoming home was destroyed in a natural gas
explosion and the owner, Agnes Ferron, suffered significant physical injury from
being present in the house where natural gas had collected and then exploded.
NUD settled the homeowner's property damage and physical injury claim for
$90,000 and then sought contribution and subrogation from the Town and Central
and indemnity from the Town.
[¶4.] By this appeal, NUD
asserts that genuine issues of material fact exist regarding its status as a
tort-feasor, and its liability to Ferron precludes summary judgment. In
addition, Central contended that the cause of action against it on the
contribution theory was barred by the statute of limitations, an issue not
addressed by the trial court because of its decision that NUD was a
volunteer.
[¶5.] NUD states the issues
as follows:
A. Did the District Court
Err As a Matter of Law in Granting Summary Judgment on Plaintiff's Claims
Against Defendants for Contribution?
B. Did the District Court
Err As a Matter of Law in Granting Summary Judgment on Plaintiff's Claims
Against Defendants for Legal or Equitable Subrogation?
C. Did the District Court
Err As a Matter of Law in Granting Summary Judgment on Plaintiff's Claims
Against Defendants for Conventional Subrogation?
D. Did the District Court
Err As a Matter of Law in Granting Summary Judgment on Plaintiff's Claims
Against DefendantTown of Evansville for Indemnity?
[¶6.] The determinations by
the trial court which are central to this appeal addressed first, the volunteer
status of NUD in its gas explosion damage settlement and payment, and second,
whether that payment was subject to an assignment sufficient to sustain
subrogation recoupment.
II. FACTS
[¶7.] This litigation results
from a February 13, 1985 public utility supplied natural gas explosion at the
residence of Agnes Ferron, located at
1080 Oildale Street, Evansville, Wyoming
, which destroyed both the home and
her personal belongings. Not only was the property damage near complete, but the
owner who was at home was injured and suffered a permanent hearing injury and
reoccurring nightmares. Her litigative posture for damage recovery was overtly
favorable.1
[¶8.] Following the
explosion, the public utility excavated its gas line in the street to
investigate the accident and discovered a gas leak coming from damage to its gas
main at the intersection of Oildale
Street and Gold Avenue. It was concluded the leaking
gas had followed the house access line into the home where it collected before
the explosion. NUD also established, at least to its satisfaction, that the
damage to the gas main was caused by the action of one or more third-party
utility contractors during their construction work on the Town's water system.
In April 1979, a crew employed by the Town had excavated and replaced a water
main segment in the vicinity of the intersection of Gold Avenue and
Oildale
Street. During the same time period, a Central crew
under contract with the Town also excavated and installed another segment of the
water main and attached a valve in the same vicinity. For purposes of this
appeal in its summary judgment context, it is not disputed that either the Town
or Central caused the natural gas line damage during city water system repair.
Some entity in street excavation had hit and damaged the underground gas line
and then did not report the potential danger to the gas utility.
[¶9.] The city utility
franchise agreement had expired prior to 1973. Thereafter, NUD, as the public
utility, continued to furnish natural gas service to the residents of Evansville by application
of "an informal arrangement" with the Town. In conjunction with that informal
agreement of practice and arrangement, the Town also followed the practice of
repaying resulting costs for repair if damage to the buried lines of the utility
occurred during street construction operations.
[¶10.] It was NUD's litigative posture before
the trial court and now on appeal that during the time of the informal
arrangement, W.S. 37-12-303 (1991) required any person damaging its underground
facilities to notify them of the damage. In compliance, the Town's course of
operation as a procedure also required utility service notification of any
damage to the gas facilities, even if caused by hand tools. It is clearly shown
in this record that neither the Town nor Central, as the excavating contractor,
had ever contacted NUD regarding damage to NUD's gas main during the 1979
excavation.
[¶11.] During the period of these events, NUD
conducted inspections to repair its natural gas system, but never discovered any
damage to the gas main in the Oildale Street and Gold Avenue
intersection. At some time prior to February 13, 1985, NUD had however received
complaints of a gas odor at Ferron's home, but had not been able to identify the
location of any gas leak and no corrective action was taken.
[¶12.] In June 1985, counsel for Ferron and her
insurance carrier, State Farm Fire & Casualty Company, made a written
pre-suit demand on NUD for $150,000 for the destruction of Ferron's home, her
personal property, and personal injuries suffered as a result of the explosion
and fire. That correspondence was followed by a letter of November 11, 1985,
through which NUD advised the Town of its contention about liability and
consequent obligation to settle the claims being submitted by Ferron for her
personal injury and property damage. A defense was tendered to the Town by the
letter which also discussed a proposed settlement with the injured homeowner in
the sum of $90,000 and further stated that "[i]f you choose not to accept the
defense, then we will assume that you agree * * * that the settlement proposal
is reasonable."
[¶13.] Evansville declined the tendered defense or
involvement in settlement negotiations. Its employees also refused to provide
NUD with information concerning construction activities in the street
intersection which may have caused the gas line damage. On February 1, 1986, NUD
settled with Ferron for the $90,000 sum and followed somewhat later with a
supplemental notice of claim seeking contribution and indemnity from the Town in
that amount. On November 3, 1986, NUD filed its original complaint naming as
defendants the Town and John Does I through IV, seeking indemnity and
contribution. The Town first answered the complaint on November 24, 1986 and
then filed variant motions for summary judgment in the succeeding litigative
period.
[¶14.] Following the filing of factual material
and briefing by the parties on the issues of contribution and indemnity, the
trial court filed a summary judgment decision letter ruling on July 2, 1987 in
favor of the Town on the issue of contribution, but denying the Town's summary
judgment motion on the issue of indemnification. Partial summary judgment was
consequently granted to the Town on the contribution claim only. NUD amended its
original complaint to plead with more specificity allegations concerning
indemnity and to include claims for breach of statutory duty, equitable
subrogation, conventional subrogation, and negligence, specifically adding a
line damage claim of $6,540.10. A further third amended complaint substituted
Central for the entity previously identified as John Doe I.
[¶15.] In 1988 pleadings, Evansville again filed a
motion to dismiss and/or for summary judgment and Central filed similar motions
with its answer and affirmative defenses. The trial court filed a decision
letter granting the Town's and Central's motions for summary judgment followed
by the entry of the general order of summary judgment favoring both defendants
on all claims. Appeal is taken from that summary judgment which denied the
property settlement recovery claims based on contribution, indemnity, legal
subrogation and conventional subrogation. There was no appeal from the summary
judgment granted to the Town on the $6,540.10 line damage claim which had been
determined by the trial court on improper claim filing and statute of limitation
concepts.
III. TOWN OF EVANSVILLE RECOVERY
ISSUES
A.
Contribution
[¶16.] NUD argues the trial court erred in
granting summary judgment in favor of the Town on the issue of contribution. 18
Am.Jur.2d Contribution § 1 (1985) (footnotes omitted) defines
contribution:
Contribution has been
defined as a payment made by each person, or by any of several persons, having a
common interest or liability, of his share in the loss suffered or in the money
necessarily paid by one of the parties in behalf of the others. The right of
contribution has also been variously described as the right of one who has
discharged a common liability or burden, to recover of another, also liable, the
portion which he ought to pay or bear * * *.
The right of contribution
is dependent upon the existence of a statute and involves joint tortfeasors.
Richardson Associates v. Lincoln-DeVore, Inc.,
806 P.2d 790 (Wyo. 1991); Comment, Wyoming Contribution
Among Joint Tortfeasors, IX Land & Water L.Rev. 589 (1974).
[¶17.] NUD's right to contribution pursuant to
the former statutes, W.S. 1-1-110 through 1-1-113 (1977),2 rests upon the question of whether
NUD and the Town are joint tortfeasors. Garner v. Hickman, 709 P.2d 407
(Wyo. 1985).
In concluding that NUD was not entitled to contribution, the trial court cited
Garner; Commercial Union Ins. Co. v. Postin, 610 P.2d 984 (Wyo. 1980); and 70 C.J.S.
Payment § 100 (1987). Postin involves the issue of voluntary payment in the
context of legal or equitable subrogation and will be discussed
later.
[¶18.] Garner discusses contribution pursuant to
the former statutes, W.S. 1-1-110 through 1-1-113, and, quoting Black's Law
Dictionary 752-53 (5th ed. 1979), defines "joint tortfeasors" as
follows:
"Joint
tort-feasors * * * refers to two or more persons jointly or severally liable
in tort for the same injury to person or property. * * * Those persons who have
acted in concert in their tortious conduct and are, accordingly, jointly and
severally liable. Those who act together in committing wrong, or whose acts if
independent of each other, unite in causing single injury. * * *"
Garner, 709 P.2d at
413.
[¶19.] Thus, NUD is entitled to make a claim for
contribution from the Town if they were joint tort-feasors. The trial court
found that there was no allegation of joint liability made by either party. If
this finding is supported by the record, the trial court correctly concluded
that contribution was not applicable here, as contribution cannot exist if the
injury was the result of the negligence of the Town or the negligence of NUD,
and not a mixture of the two. Garner, 709 P.2d 407; Rees v. DallasCounty, 372 N.W.2d 503 (Iowa 1985); Prosser &
Keeton, The Law of Torts, § 50 at 339 (5th ed. 1984). However, if the record
demonstrates that genuine issues of material fact exist as to whether NUD was a
joint tort-feasor, summary judgment on the issue of contribution was
inappropriate and should be reversed. Baldwin v. Dube, 751 P.2d 388 (Wyo. 1988); Cordova v. Gosar, 719 P.2d 625 (Wyo. 1986); Greaser v. Williams, 703 P.2d 327 (Wyo. 1985); National
Farmers Union Property & Cas. Co. v. Nelson, 260 Iowa 163, 147 N.W.2d 839
(1967).
[¶20.] The documents before the trial court at
the time of the July 2, 1987 decision letter included the affidavit of Robert F.
Hughes (General Superintendent-Distribution for NUD) and NUD's answers to the
Town's first discovery request. The affidavit of Hughes sets forth the
undisputed fact that the explosion was caused by leakage of natural gas from a
damaged section of NUD's natural gas distribution main. The affidavit also sets
forth the facts, undisputed for purposes of this appeal, that the damage to
NUD's line was caused by construction of the Town's water system, and that
Ferron was determined by NUD to be without fault in the occurrence. The
affidavit further recounts the demand made on behalf of Ferron against NUD, and
NUD's unsuccessful attempts to tender the defense of Ferron's claims against the
Town.
[¶21.] Hughes states in his affidavit as
follows:
Recognizing the risk of
exposure to NUD and the difficulties of defending any gas explosion case,
particularly a case involving an innocent party, NUD chose to settle with Ms.
Ferron, reserving the right to proceed against parties proximately causing the
above-mentioned incident.
[¶22.] NUD's risk of exposure is demonstrated by
its answers to the first discovery of the Town. Its answers indicate that in
addition to repairs and maintenance, NUD performed regular inspections of the
main, service pipes, connections and valves in the area of the damaged and
leaking gas line during the time period between April 1979 and the date of the
explosion on February 13, 1985. The specific question to be answered concerning
the liability or non-liability of NUD is whether it should have discovered the
damaged gas line and leak in question prior to the explosion. A review of those
documents, from a viewpoint most favorable to NUD and giving to it all favorable
inferences to be drawn from the facts therein, demonstrates the existence of
genuine issues of material fact regarding the liability or non-liability of NUD.
Hyatt v. Big Horn School Dist. No. 4, 636 P.2d 525 (Wyo. 1981); Bancroft v. Jagusch, 611 P.2d 819 (Wyo. 1980). The
Wyoming rule
for granting summary judgment establishing proponent's burden to demonstrate an
absence of factual issue is well established. Stephenson v. Pacific Power &
Light Co., 779 P.2d 1169 (Wyo. 1989); Davenport v. Epperly, 744 P.2d 1110 (Wyo. 1987); Cordova, 719 P.2d 625.
[¶23.] As an additional ground for granting
summary judgment on the contribution issue, the trial court found that NUD
voluntarily made the settlement payment, i.e., payments it was under no legal
compulsion to make.3 The former statutes, W.S. 1-1-110
through 1-1-113, do not require that payment be made under a "legal compulsion"
before the provisions of the statute regarding contribution apply. The right to
contribution rests upon the question of whether the parties are joint
tort-feasors and presents a question of fact for the jury to
determine.
[¶24.] Some party or parties participated in the
damage to the gas line and subsequent escape of the dangerous substance into
Ferron's house. NUD contends it was done by the Town directly or through its
contractor when either or both did disruptive street work. Those causative
activities were sequentially followed by NUD in its subsequent failure to
discover the damaged line and correct the leakage before the resulting explosion
occurred. This explosion had a cause and the cause was not an act of God as
distinguished from the conduct of man. Some actor, and arguable all three,
participated in the explosion that blew up Ferron's home, destroyed her
possessions and caused her personal injury. A suitable factual examination at
trial can sort out who, what and why. We therefore reverse the trial court's
summary judgment on the issue of contribution and remand for determination of
whether the parties were joint tort-feasors.
B. Legal or Equitable
Subrogation
[¶25.] In its October 26, 1988 decision letter,
the trial court correctly concluded that "a volunteer cannot recover on a theory
of legal subrogation." In Postin, 610 P.2d at 986 (quoting Criss v. Folger
Drilling Company, 195 Kan. 552, 407 P.2d 497, 500 (1965)), we
discussed subrogation as follows:
Subrogation has been
defined as "the substitution of another person in the place of a creditor, so
that the person in whose favor it [subrogation] is exercised succeeds to the
rights of the creditor in relation to the debt." * * *
* * * * * *
There are two kinds of subrogation -
legal or equitable and conventional. Legal or equitable subrogation arises by
operation of law, and conventional subrogation arises by contract.
See also Richardson
Associates, 806 P.2d at 811. The principle established in Postin, 610 P.2d at
987 was that "it is a defense in legal or equitable subrogation to show that
[the party claiming subrogation] paid as a mere volunteer."4
[¶26.] After determining that the insurance
company in Postin had not paid under compulsion, we further noted that a party
claiming subrogation is not a volunteer if it acts to protect its own interest.
Specifically, we stated as follows:
Within the ambit of
legal-subrogation law, it is recognized that one is not a volunteer where it is
shown that he made payment to protect his own interest. At 73 Am.Jur.2d,
Subrogation, § 25, "Persons acting in self-protection," p. 614, it is
said:
"The right of
subrogation is not necessarily confined to those who are legally bound to make
the payment, but extends as well to persons who pay the debt in self-protection,
since they might suffer loss if the obligation is not discharged. A person who
has an interest to protect by making the payment is not regarded as a volunteer.
* * * The extent or quantity of the subrogee's interest which is in jeopardy is
not material. If he had any palpable interest which will be prohibited by the
extinguishment of the debt, he may pay the debt and be entitled to hold and
enforce it just as a creditor could. * * * It would seem that one acting in good
faith in making his payment, and under a reasonable belief that it is necessary
to his protection, is entitled to subrogation, even though it turns out that he
had no interest to protect."
Postin, 610 P.2d at
989-90. See also Wyoming Building & Loan Ass'n v. Mills Const. Co., 38
Wyo. 515, 269 P. 45 (1928).
[¶27.] Volunteer status is a question of law to
be determined by the court. Employers Mut. Fire Ins. Co. v. Piper, 335 S.W.2d 925 (Ky.
1960). However, factual issues must be resolved before the court can decide the
legal issue of whether or not a party was a volunteer and not entitled to
subrogation. Id. at 928. In Piper, the insurer paid its
insured for damaged machinery under a first-party casualty policy. Following
payment, the insurer sought subrogation from a contractor who was moving
machinery to a new site under a contract when an explosion damaged the insured
machinery. The Piper court held that granting summary judgment was erroneous and
that factual issues of whether or not the contractor had control of the
machinery at the time of the explosion and whether or not the machinery was
within 100 feet of the building as required in the policy would have to be
resolved before the court could decide the issue of whether or not the insurer
was a volunteer and therefore not entitled to subrogation. See 16 Couch on
Insurance 2d § 61:55 (Rev. ed. 1983). The court in Weir v. Federal Ins. Co., 811 F.2d 1387, 1394 (10th Cir. 1987) accurately analyzed:
The question of
voluntariness turns on the facts of each particular case. Sturdevant v. Mills,
177 Mont. 137,
138, 580 P.2d 923, 926 (1978) (citing 70 C.J.S. Payments § 134 (1951)). There is
a presumption, however, that a payment is not made voluntarily. McGuire v.
Wilson, 372 So. 2d 1297, 1302 (Ala. 1979) (citing 16 G.
Couch, Cyclopedia of Insurance Law § 61.54 (1966)).
[¶28.] We agree with NUD that genuine issues of
material fact exist that must be resolved before the trial court can decide
whether or not NUD was a volunteer; specifically, whether NUD's payment was in
good faith and under a reasonable belief that payment was necessary. A review of
the record demonstrates that NUD had potential liability and monetary exposure
in this situation. NUD had conducted regular inspections of the main, service
pipes, connections, and valves in the area of the explosion prior to the date of
the accident, and had failed to find a leak. In addition, NUD had actually
received customer complaints of a gas odor from Ferron, but failed to determine
that no leak existed or to locate its existence. Under threat of litigation, and
with claims of damages to Ferron in excess of $150,000, NUD settled at the
compromised amount.
[¶29.] NUD's investigation following the
explosion established that Ferron was not contributorily negligent. Under the
rule of joint and several liability which existed at the time, if a jury found
that NUD was even one percent negligent for failing to discover the leak, NUD
was exposed to the entire amount of any judgment awarded to Ferron.
[¶30.] The record now presented could factually
support a determination that NUD's settlement was in good faith and under a
reasonable belief that payment was necessary to protect NUD's
interests.
In general,
subrogation is applied to avoid unjust enrichment when one party, other than a
volunteer, has discharged an obligation which should have been satisfied by
another. * * * It is a device whereby a court compels the ultimate payment of an
obligation by the party who in good conscience ought to pay it.
Hocker v. New Hampshire
Ins. Co., 922 F.2d 1476, 1485 (10th Cir. 1991). "Subrogation is an equitable
doctrine; and, therefore, equitable principles apply in determining whether
subrogation is available." Remy v. Michael D's Carpet Outlets, 391 Pa. Super. 436, 571 A.2d 446, 452 (1990).
[¶31.] Within this factual issue addressing
NUD's interest at risk, it is certainly not determinable as a matter of law that
NUD was a volunteer when it paid the $90,000. We reverse and remand on the issue
of legal or equitable subrogation.
C. Conventional
Subrogation
[¶32.] In Postin, 610 P.2d at 992, we discussed
conventional subrogation and stated:
At 73 Am.Jur.2d,
Subrogation, § 9, "Conventional Subrogation," p. 604, the encyclopedia
says:
"Conventional
subrogation, as the term implies, is founded on some understanding or
agreement, express or implied, and without which there is no `convention.'
Conventional subrogation can take effect only by agreement and has been said to
be synonymous with assignment. It occurs where one having no interest or any
relation to the matter pays the debt of another, and by agreement is entitled to
the rights and securities of the creditor so paid. . . ." (Emphasis
supplied)
* * * * * *
"The contract right of
subrogation is somewhat broader than legal subrogation, for the right is granted
irrespective of whether the payment was necessary for the protection of the
person seeking subrogation."
[¶33.] The trial court's October 26, 1988
decision letter, citing Allstate Ins. Co. v. Druke, 118 Ariz. 301, 576 P.2d 489
(1978) and Block v. California Physicians' Service, 244 Cal. App. 2d 266, 53 Cal. Rptr. 51 (1966), held that "[t]he prevailing rule * * * appears to be that
an assignment of a cause of action for personal injuries is void as against
public policy and cannot be the subject of a subrogation claim."
[¶34.] NUD asserts that the trial court was in
error in concluding that the claims at issue were not assignable and hence could
not be the subject of a subrogation claim. NUD entered into an agreement with
Ferron and her insurer, State Farm, the property damage carrier for the
destroyed house, (referred to as "Plaintiff") which provided in pertinent
part:
[This Agreement] is * * *
intended to provide and preserve for Northern full rights of contribution, and
Northern is as well subrogated to any rights of Plaintiff, against all other
negligent persons, entities and corporation not an executing party to this
Agreement including, but not limited to, the Town of Evansville, those
contractors employed by the Town of Evansville and all other contractors who
struck Northern's gas distribution line in or around the area of Plaintiff's
house.
The general rule
governing the assignability of causes of action for personal injuries is stated
in 6 Am.Jur.2d Assignments § 39 (1963) (emphasis added and footnote
omitted):
The principal reason
for holding that choses in action for personal injuries resulting from
negligence or from other tortious acts are not assignable lies in the fact that
they do not survive the death of the person injured, and it is generally held
that the enactment of statutes providing for the survival of such actions
operates incidentally to remove the restrictions on their assignability. The
question of survivorship becomes the test whether an assignee can
recover.
[¶35.] W.S. 1-4-101 (1988), entitled "Causes of
action that survive", states as follows:
In addition to the
causes of action which survive at common law, causes of action for
mesne profits, injuries to the person, and injury to real or personal
estate, or any deceit or fraud also survive.
(Emphasis added). Thus,
in Wyoming,
causes of action for damage or injury to persons and property survive and are
assignable, and consequently can be the subject of a claim for conventional
subrogation. We hold that the trial court was in error in concluding that the
claims at issue were not assignable and hence could not be the subject of a
subrogation claim. Summary judgment on the issue of conventional subrogation is
therefore reversed and remanded. This decision is confined to the subject
presented, namely a preclusion against assignment as a legal theory which
forecloses any subrogation action by the payor against the contended negligent
party. We do not address the broad subject of assignability of personal injury
rights of action in any context except the limited scope of conventional
subrogation here presented.
[¶36.] In this case, the record reveals three
elements included in the $90,000 settlement made by NUD. There was a subrogation
interest originally acquired by State Farm in settlement with its insured,
Ferron, for damage to the house as a first-party settlement which apparently
included the loss of her house and destruction of her furniture, clothes and
personal effects. State Farm paid Ferron and filed a subrogation claim against
NUD. The further element of the settlement, separate from the initial real
property and personal property damage subrogation claims, results from the
additional amount paid for the third-party settlement by NUD with Ferron for
injury and possible property damage and loss of use not paid by State Farm. This
record by careful intent or apparent disinterest does not demonstrate how the
$90,000 payment was allocated between the State Farm subrogation interest and
Ferron's liability claim. This subrogation analysis obviously presents both an
individual personal injury and a property damage component. The summary judgment
argument and appellate briefs relate to the subrogation (assignment of rights)
against a tortfeasor resulting from the bodily injury component.
[¶37.] As earlier noted, the logical foundation
for non-assignability of personal injury claims resulted from a thesis of
non-survivability. That preclusion has been removed in Wyoming by a survival
statute. However, survival statute enactment does not in all jurisdictions
automatically make the personal injury claim an assignable intangible right
whether or not prohibitory or validating assignment statutes exist. Involved and
discrete issues develop regarding subjects such as subrogation of first-party
medical pay insurance coverages and major tort case syndication by interest
assignment. Consequently, with survival statute enactment in Wyoming, we address
assignability only as it relates to a subrogation recovery remedy after some
character of liability claim payment has been made by the subrogated
party.
[¶38.] The rule we apply is that
non-assignability principles of injury damage claims, if any exist in Wyoming, do not extend to
subrogation proceedings. Consequently, neither of the authorities cited by the
trial court in its decision are factually applicable. Druke, 576 P.2d 489
involved a first-party medical pay coverage subrogation claim. Allstate
Insurance Company had attempted to enforce subrogation repayment against its
insured from personal injury claim collection from a third-party defendant. On
review, the Arizona court followed what may be a general
rule and invalidated insurance policy subrogation provisions for payments made
under medical pay automobile insurance policy coverage.
[¶39.] The second case cited, Block, 53 Cal. Rptr. 51, is somewhat similar. It addressed a policy provision of a
nonprofit medical insurance company requiring policyholders to repay amounts
paid under the policy if any third-party recovery on an injury claim was
collected from a tort-feasor. The policy provision was validated on a
premise of denial of double recovery and the court's assertion that it was not
assignment or subrogation but only constituted required reimbursement. The
non-assignability comment in the opinion was rendered idle dictum in the
decision by the intermediate appellate court.5
[¶40.] It is recognized that although in the
discussion of contribution, "joint tort-feasors" is a term and a
characterization normally used; in this factual situation, we have successive
tortfeasors. Radford-Shelton Associates Dental Laboratory, Inc. v. Saint Francis
Hospital, Inc., 569 P.2d 506 (Okla.App. 1976). The Radford-Shelton court directs
us to the three categories of actors within apportionment and contribution
litigation proceedings:
The problem of
apportioning damages among tort-feasors becomes clearer when we distinguish
between the three kinds of tortfeasors:
Joint
tort-feasors - those who have acted
intentionally or in concert to injure a third party. * * * Concurrent
tort-feasors - those whose independent, negligent acts combined or concurred
at one point in time to injure a third party. * * * Successive
tort-feasors - those whose independent, negligent acts, although severable
in point of time, caused injury to the same third party.
Id. at 509.
[¶41.] In this case, the negligence of Central
occurred in damaging the gas line and subsequent failure to tell NUD that its
equipment had hit the buried line. The Town comes into responsibility, if any,
from its own construction damage to the line, the conduct of Central or,
alternatively, from the failure to supervise or advise of damage or to give
notice in advance that the work was to be undertaken. Thereafter in sequence,
NUD, as a successor in behavior, incurs liability from the explosion derived
from an inspection failure or glitch in nondiscovery of the source of the gas
after notice of the danger had been provided. Clearly, NUD was, in the
definitional terms, sequentially a successive tort-feasor who seeks
reimbursement for the harm caused by the independent prior conduct of Central
and the Town.
[¶42.] A case with similar facts, except that
trial was held, is provided in Alamida v. Wilson, 53 Haw. 398, 495 P.2d 585 (1972). A
misplaced power pole adjacent to the highway caused an accident with serious
physical injury. Plaintiff sued the utility and the County of Hawaii and settled with everyone except
the county for $118,000. At trial, the jury found the county to be negligent and
held that the settling defendants were entitled to recover from the county under
the equitable principle of subrogation. Thus, the decision established the right
of the settling defendants to pursue a claim by subrogation against a defendant
which did not contribute or settle. A similar reserved right to litigate a
settled claim against the tort-feasor was also recognized in Aetna Cas. &
Sur. Co. v. Associates Transports, Inc., 512 P.2d 137 (Okla. 1973).
[¶43.] Another subrogation case of similar
facts, although with only property damage, is provided in Rexroad v. Kansas
Power & Light Co., 192 Kan. 343, 388 P.2d 832 (1964). In Rexroad, the
contractor was doing street work when its bulldozer struck insufficiently buried
gas lines in the street. The bulldozer was burned up as was a neighbor's house.
The contractor sued the gas company for its loss and for subrogation for the
payments it had made to the neighbor whose lawsuit had taken three trips to the
Kansas Supreme Court before finalization and payment.
[¶44.] Immediately after conclusion of the
neighbor's suit, the contractor amended its pending negligence action against
the gas company for loss of the bulldozer and added the subrogation claim for
compensatory payment to the neighbor. The bulldozer aspect was primarily
subrogation by a nonnamed casualty carrier which had paid all but the deductible
for the loss of the bulldozer. The jury rendered a verdict for the subrogated
claim derived from settlement with the neighbor but not the bulldozer. Rights to
maintain both classes of subrogation claims were validated by the Kansas Supreme
Court decision.
[¶45.] Settling initial tort-feasor rights
against a successor tort-feasor where augmented injury existed was pursued in
Underwriters at Lloyds v. City of Lauderdale
Lakes, 382 So. 2d 702 (Fla. 1980). The court recognized, which we
appropriately apply here:
Subrogation is an
equitable doctrine whereby the initial tortfeasor/defendant is placed "in the
shoes" of the plaintiff. * * * It is a legal device "founded on the proposition
of doing justice without regard to form, and was designed to afford relief where
one is required to pay a legal obligation which ought to have been met, either
wholly or partially, by another. Trueman Fertilizer v. Allison, Fla., 81 So. 2d 734 [1955]."
Underwriters at Lloyds,
382 So. 2d at 704. See Hocker, 922 F.2d 1476. Included in supporting citations
were cases involving negligent doctors who aggravated the victims' injuries for
which injuries the settling initial tort-feasor sued the doctor on a subrogation
basis and succeeded in recovery.
[¶46.] The early injury subrogation case in a
worker's compensation fund reimbursement context was Aetna Life Ins. Co. v.
Moses, 287 U.S. 530, 53 S. Ct. 231, 77 L. Ed. 477 (1933). The United States
Supreme Court rejected the common law rule of non-assignability and validated a
statutory right of the fund to be subrogated to the rights of the injured worker
against the third party which had caused the injury. The court found no
difference between an injured survivor or a non-surviving victim. The
compensating employer "acquires the legal rights of the employee or the personal
representative * * *," id. at 541, 53 S. Ct. at 233, and the insurer was
subrogated to the rights of the employer.6 The subrogation interest concept
has an ancient history earlier recognized in Regan v. New York & N.E.R. Co.,
60 Conn. 124,
22 A. 503 (1891), which in result is directly contrary to the basic
collectability thesis of Decespedes v. Prudence Mut. Cas. Co. of Chicago, Ill.,
193 So. 2d 224 (1966), aff'd 202 So. 2d 561 (Fla. 1967). Subrogation by a city for wages
paid to an injured fireman who sued the third party tort-feasor was likewise
approved in Potoczny to Use of City of Philadelphia v. Vallejo, 170 Pa. Super.
377, 85 A.2d 675 (1952). That court stated the rule:
"Where property of one
person is used in discharging an obligation owed by another * * *, under such
circumstances that the other would be unjustly enriched by the retention of the
benefit thus conferred, the former is entitled to be subrogated to the position
of the obligee. * * *"
To refuse subrogation
in the instant case is merely to permit the defendant to get a benefit from the
discharge of a duty by the city which, as between him and the city, should have
been discharged by him.
Id. 85 A.2d at 677
(quoting Restatement, Restitution, § 162).
[¶47.] We conclude that concepts of
non-assignability of personal injury claims are not applicable in this
subrogation case and, consequently, the summary judgment on this issue was
improvidently granted. Issues of relative fault charged to NUD, the Town and
Central should be determined by trial examination.7
D.
Indemnity
[¶48.] In the October 26, 1988 decision letter,
the trial court granted the Town summary judgment on the indemnity issue relying
upon the trial court's July 2, 1987 finding that NUD was a volunteer. The trial
court stated that "it is necessary for the plaintiff to allege and prove that he
was legally liable to the person injured and paid under compulsion" in order to
avoid summary judgment on the issue of indemnity. NUD argues again that genuine
issues of material fact exist with regard to the volunteer status of NUD, and,
consequently, summary judgment on the basis that NUD was a "volunteer" was in
error. We agree.
[¶49.] This case is postured in a very
preliminary stage of factual and legal theory development as the result of the
summary judgment decree based upon the trial court's dispositive "volunteer" and
non-assignability determinations. Any theory within the confines of indemnity,
express, implied (implied in fact) and non-contractual (implied in law) derives
generally from the same contractual or implied contractual theories of recovery.
Richardson
Associates, 806 P.2d at 811.
[¶50.] There is very little in the record to
establish how an indemnity theory might be demonstrated. Essentially, the
complex and finely positioned elements of the three classes of indemnity
litigation, see Richardson Associates, 806 P.2d at 811 n. 26, was never
considered by the trial court in the initial decision of Judge Leimback to deny
summary judgment on indemnity or the succeeding decision of Judge Spangler which
applied a volunteer status delineation to grant summary judgment and finitely
deny recovery. NUD's appellate brief does not alert us to what contractual or
implied contractual relationship underlay its indemnity claim. Obviously, NUD
had no contractual relationship with Central and its relationship with the Town
based on the continued business under an expired franchise agreement is at best
ephemeral for any indemnity analysis. Consequently, despite citation by the
parties, Pan American Petroleum Corp. v. Maddux Well Service, 586 P.2d 1220
(Wyo. 1978),
which involved express contractual indemnity, provides minimal authority. Cf.
Richardson Associates, 806 P.2d 790. Duty from contractual agreement or implied
duty from a relationship of the parties is obviously required before any
character of indemnity can be asserted as a viable theory for reimbursement when
payments have been made to a tort damaged claimant.
[¶51.] At least on the issue of demand and
nonconcurrence, Pan American Petroleum Corp. set the appropriate indemnity issue
of law for this case. In Pan American Petroleum Corp., 586 P.2d at 1225-26,
addressing a situation where, as in the instant case, the indemnitor had
declined to approve a proposed settlement or assume the burden of the defense,
the court stated as follows:
We find the
better-reasoned rule to be that if an indemnitor declines to approve a proposed
settlement or to assume the burden of the defense, then the indemnitee is only
required to prove a potential liability to the original plaintiff in order to
support a claim against the indemnitor. * * *
* * * These matters
structure a jury question as to whether (the indemnitee) made a reasonable,
prudent, and goodfaith settlement. At a trial on the merits, the jury should be
instructed to consider the likelihood of a recovery against (the indemnitee), as
well as the reasonableness of the settlement amount.
[¶52.] Realistically, at worst, this record
leaves us with an issue of fact on the wisdom, propriety, and process of the
injury and house destruction settlement. Separate from the unpresented basic
question of how does indemnity arise, a jury question is presented in evaluating
NUD's potential liability to Ferron and as to whether NUD made a "reasonable,
prudent, and goodfaith settlement." Id. at 1226. Therefore, summary judgment on
the issue of indemnity is reversed and this claim is remanded for determination
of whether a properly stated claim as a theory of recovery is presented both
legally and factually and whether the tests of the theory are met by the factual
evidence presented.
IV. CENTRAL CONTRACTORS
STATUTE OF LIMITATIONS ISSUE
[¶53.] This appeal raises an issue of first
impression in Wyoming: whether or not the "relation back"
limitations of W.R.C.P. 15(c) apply to an amendment of a complaint made to
identify a defendant originally named fictitiously as "John Doe I" pursuant to
W.R.C.P. 17(d) and made after the statute of limitations had run.
[¶54.] Resolving this issue requires
interpretation of three Wyoming rules of civil procedure and a statute
of limitations. NUD relies on the Wyoming fictitious name rule, W.R.C.P. 17(d),
which provides:
Suing person by
fictitious name. - When the plaintiff is
ignorant of the name of a defendant, such defendant may be designated in any
pleading or proceeding by any name and description, and when the true name is
discovered the pleading or proceeding may be amended accordingly; and the
plaintiff in such case must state in his complaint that he could not discover
the true name, and the summons must contain the words, "real name unknown", and
a copy thereof must be served personally upon the defendant.[8]
[¶55.] Central cites a second relevant rule,
W.R.C.P. 3(b), which governs the commencement of an action, and provides in
pertinent part:
When
commenced. - For purposes of
statutes of limitation, an action shall be deemed commenced on the date of
filing the complaint as to each defendant, if service is made on him or on a
co-defendant who is a joint contractor or otherwise united in interest with him,
within sixty (60) days after the filing of the complaint. If such service is not
made within sixty (60) days the action shall be deemed commenced on the date
when service is made.
(Emphasis
added.)
[¶56.] The applicable statute of limitations
involved was found in a joint tort-feasor contribution act adopted by Wyoming in 1973, W.S.
1-1-110 through 1-1-113 (1977). The act was in effect at the time of the
accident, February 13, 1985, as well as on February 1, 1986, the date of the
settlement, and the date payment was made to the injured party. W.S. 1-1-112(d)
(1977), on the enforcement of the statutorily authorized contribution claim,
provided as follows:
If there is no judgment
for the injury or wrongful death against the tortfeasor seeking contribution,
his right of contribution is barred unless he has either:
(i) Discharged by
payment the common liability within the statute of limitations period applicable
to claimant's right of action against him and has commenced his action for
contribution within one (1) year after payment [.]
(Emphasis
added.)
[¶57.] NUD commenced this action for
contribution against the Town and four John Does on November 3, 1986, clearly
within one year of payment on February 1, 1986. However, under W.R.C.P. 3,
action was not commenced against Central until acceptance of the summons on July
20, 1988, which is almost two and a half years after NUD's payment. Central
argues that NUD's action against Central is barred because it was not filed
within the one year mandated by W.S. 1-1-112(d) (1977).
[¶58.] The third rule cited is W.R.C.P. 15(c)
regarding the "relation back" of amendments to pleadings, which
provides:
Relation back of
amendments. - Whenever the claim or
defense asserted in the amended pleading arose out of the conduct, transaction,
or occurrence set forth or attempted to be set forth in the original pleading,
the amendment relates back to the date of the original pleading.
[¶59.] NUD points out that the Wyoming version of
W.R.C.P. 15(c) is identical to the earlier version of F.R.C.P. 15(c), which was
later amended in 1966 to add the following:
An amendment changing the
party against whom a claim is asserted relates back if the foregoing provision
is satisfied and, within the period provided by law for commencing the action
against the party to be brought in by amendment that party (1) has received such
notice of the institution of the action that the party will not be prejudiced in
maintaining his defense on the merits, and (2) knew or should have known that,
but for a mistake concerning the identity of the proper party, the action would
have been brought against the party.
[¶60.] NUD argues that if the factors identified
in the current Rule 15(c) are met, its amended complaint substituting Central
for John Doe I relates back to the original complaint and further contends that
analysis of these factors requires consideration of matters outside the
pleadings making summary judgment on the statute of limitations issue
inappropriate.
[¶61.] The cases considering both a fictitious
name statute and the longer, amended version of Rule 15(c) have held that
plaintiffs have a right to use John Does and subsequently to amend their
complaints. However, an amendment to a complaint substituting a named defendant
for a fictitious defendant is considered to constitute a change of a party and
will relate back to the filing of the original complaint and toll the statute of
limitations only if the requirements of W.R.C.P. 15(c) are satisfied, i.e., the
defendants actually had or should have had notice of the claim against them as
to the occurrence in question.
[¶62.] In Gould v. Tibshraeny, 21 Ariz. App.
146, 517 P.2d 104 (1973), the plaintiff named fictitious defendants pursuant to
a fictitious name statute nearly identical to Wyoming's fictitious name rule,
then subsequently substituted Tibshraeny for one of the "Doe" defendants after
the statute of limitations had run. The court held that the amended complaint
did not relate back to the filing of the original complaint to toll the statute
of limitations where the requirements of Rule 15(c) had not been
met:
It is fundamental that
the purpose of the statute of limitations is to provide a cutoff point in time
for stale claims. Rule 15(c) carries out this sound policy by requiring notice
of the institution of the action within the time limitations set by the statute
of limitations before an amendment adding new parties will relate back to the
date of the original pleading.
Gould, 517 P.2d at 106.
The first service of process followed amendment to substitute the actual name of
the contended tortfeasor. Under this Arizona rule, amendment to change a fictitious
name to an actual party constitutes a Rule 15(c) change of a party and criteria
of the rule must be met to obtain benefit of the "relation back" result.
Medina v.
Schmutz Mfg. Co., 677 P.2d 953 (Colo. App. 1983), overruled sub nom. Dillingham
v. Greeley Pub. Co., 701 P.2d 27 (Colo. 1985).9 See also Schiavone v. Fortune, 477 U.S. 21, 106 S. Ct. 2379, 91 L. Ed. 2d 18 (1986), which considered Rule 15(c) in conjunction with the related party
amendment concept instead of the fictitious name change; and Jacobson v. Union
Story Trust and Sav. Bank, 338 N.W.2d 161 (Iowa 1983), involving substitution of the
executor of estate for the decedent. See also Richardson Associates, 806 P.2d at
799.
[¶63.] The Seventh Circuit Court of Appeals has
held that a plaintiff's amended pleading substituting the true names of
defendants for the fictitious names used in the original pleading did not relate
back so as to avoid bar of limitations where, prior to service of summons on
original fictitious defendants, they had no notice of the pending lawsuit. Sassi
v. Breier, 584 F.2d 234 (7th Cir. 1978). Accord prospectively, Chacon v. Sperry
Corp., 111 Idaho 270, 723 P.2d 814 (1986). See also
Gardner v. Fithian, 128 Ariz. 353, 625 P.2d 942 (1981); Hartford Ins. Group v.
Beck, 12 Ariz. App. 532, 472 P.2d 955 (1970);
Larson v. C.W. Matthews Contracting Co., Inc., 182 Ga. App. 356, 356 S.E.2d 35 (1987); Sims v. American Cas. Co., 131 Ga. App. 461, 206 S.E.2d 121, aff'd
232 Ga. 787, 209 S.E.2d 61 (1974); Berns Const. Co., Inc. v. Miller, 491 N.E.2d 565 (1986), aff'd 516 N.E.2d 1053 (Ind. 1987); Lunn v. American Maintenance
Corp., 96 Nev. 787, 618 P.2d 343 (1980); and Vocke v. City of Dayton, 36 Ohio
App.2d 139, 303 N.E.2d 892 (1973). Contra Sooy v. Petrolane Steel Gas, Inc., 218
Mont. 418, 708 P.2d 1014 (1985), reversing
Vincent v. Edwards, 184 Mont. 92, 601 P.2d 1184 (1979).
[¶64.] With the passage of Rule 15(c), we follow
the Arizona
rule that the test is notice to the actual defendant and not necessarily
diligence of the plaintiff attempting identification for amendment. Cf. Younger
v. Kracke, 236 N.J. Super. 595, 566 A.2d 581 (1989).10
[¶65.] This record establishes that although NUD
states in its complaints it notified the Town as to its pending settlement with
the injured party, there is no allegation or evidence in the record that it
notified Central of its claims or gave Central an opportunity to participate in
the negotiations or settlement with the injured party. Thus, the notice
requirement of Rule 15(c) necessary to effectuate a "relation back" amendment
result is not shown in this record.11 The trial court consequently
properly dismissed proceedings against Central on the basis that the statute of
limitations had expired. NUD had a right to use a fictitious name in the initial
complaint; but, when amendment is made after the time permitted by the statute
of limitations has passed, an amendment relates back for time computation only
when the defendant had or should have had notice of a claim against it. Vincent,
601 P.2d 1184.
V. CONCLUSION
[¶66.] The summary judgment granted to Central
is affirmed, the summary judgment favoring the Town is reversed on all three
theories - contribution, subrogation and indemnity.
[¶67.] It is, however, important to recognize
the limited scope of this decision upon reversal and remand. We determine that
contention of volunteer status is a factual issue unsuitable for summary
judgment dismissal adverse to NUD. We also determine that no principle of
non-assignability necessarily forecloses part or total subrogation of the
payments made against the Town. Beyond these decisions, a near multitude of
legal and factual questions remain unaddressed by either the trial court or this
decision. One of these questions is whether either partial or total subrogation
can be realistically applied considering that contribution requires a
demonstration of non=volunteer status, e.g., joint tortfeasor participation, as
well as the existence of unclear concepts about indemnity
application.
[¶68.] Procedurally, in order to achieve
contribution assessment, NUD had to first contend and prove non-volunteer status
which is derived from some character of joint tort-feasor sequential conduct.
For NUD, this is not a respondeat superior case, but is instead a
sequential act situation. The second anomaly or factual cloud is establishment
of the basis of the Town's liability, e.g. direct tort, contractual, or
respondeat superior by differentiation from negligence of its contractor.
The next issue unaddressed by evidence or theory development is the difference
between the status of NUD as the assignee of State Farm's casualty loss payment
to Ferron, which claim, in itself as to State Farm, was clearly subject to
subrogation and its second status derived from its first-party payment to Ferron
for injury damage resulting from contended principal party negligence. The first
party settlement might also have included property damage aspects.
[¶69.] In this bodily injury subrogation, NUD
sought to recover from its co-participant/joint tortfeasor Central and/or Town.
Active/passive negligence concepts may creep into legal theory development, none
of which have presently been considered by the trial court nor presented in
appellate briefing. Primary and secondary liability issues have not been
researched or determined by the trial court. See Richardson Associates, 806 P.2d
at 813 and cases cited therein. See also Centric Corp. v. Drake Bldg. Corp., 726 P.2d 1047 (Wyo. 1986), where the court recognized the
difference between the tort remedy of contribution and the contractual basis of
indemnity. Not the least of many interesting concepts presented is the
independent contractor defense of the Town since we have now removed the
contractor from the litigation arena. See Allmaras v. Mudge, 820 P.2d 533
(Wyo. 1991)
(No. 90-275, decided 11/8/91). Furthermore, we neither examine nor determine
whether an indemnity claim is properly stated for pleading purposes. If it is,
there is less than clarity in description, and consideration by this court is
now untimely since we are unassisted by briefing or argument.
[¶70.] By this decision in regard to the
litigation between NUD and the Town, we only decide that factual issues exist
regarding the volunteer status where the utility paid $90,000 and that a
non-assignability preclusion cannot as a matter of law be applied to deny
assessment to a right to subrogate. We decide no more.
[¶71.] Reversed and remanded for further
proceedings in accord herewith.
FOOTNOTES
1 Ferron lost her home and
apparently all of her furniture and personal possessions, including clothing
items. The record does not differentiate between the home and tangible personal
property items, including furniture and the physical injury sustained, but no
one suggests that the pursuit of negotiations from a short fused $150,000
initial demand to a $90,000 settlement was overly generous or exceptionally
gracious. Undoubtedly, a trial would more adequately establish boundaries of
litigable exposure, but certainly this settlement was within realistic
boundaries of potential liability. The settlement payment included three
elements in undefined amounts: (1) subrogation claim of Ferron's own home
insurance casualty carrier; (2) other uninsured or insurance policy deductible
losses; and (3) personal injury.
2 The former statute, W.S.
1-1-110, provides in pertinent part:
(a) Except as
otherwise provided in W.S. 1-1-110 through 1-1-113, where two (2) or more
persons become jointly or severally liable in tort for the same injury to person
or property * * * there is a right of contribution among them even though
judgment has not been recovered against all or any of them.
(b) The right of
contribution exists only in favor of a tortfeasor who has paid more than his pro
rata share of the common liability, and his total recovery is limited to the
amount paid by him in excess f his pro rata share. No tortfeasor is compelled to
make contribution beyond his own pro rata share of the entire
liability.
3 July 2, 1987 decision
letter.
4 The legal concepts
enunciated in Postin were solidly based and well established. The factual
conclusion that the insurance company in the case paid as a volunteer is
extremely hard to fathom. Excess limits and bad faith insurance cases of current
vintage should teach us something about "contendable risk" in either first or
third party perspective. Coulthard v. Cossairt, 803 P.2d 86 (Wyo. 1990); McCullough v. Golden Rule Ins. Co., 789 P.2d 855 (Wyo.
1990).
5 An interesting facet of
appellate jurisprudence is provided by consideration of these two cases. The
background ideology and general discussion are very similar and follow the same
contention of non-assignability to achieve an exact opposite result.
Additionally in Druke, a case is cited, Decespedes v. Prudence Mut. Cas. Co. of
Chicago, Ill., 193 So. 2d 224 (1966), aff'd 202 So. 2d 561 (Fla. 1967), which does
not support the decision in Druke and is consistent with the Block decision
since it held that the settlement with the tortfeasor denied the insured's
contractual right to policy benefits for purchased medical expense
coverage.
6 The one Wyoming case of similar rapport is Iowa National Mutual
Insurance Company v. Huntley, 78 Wyo. 380, 328 P.2d 569 (1958). Huntley was a
standard vehicle damage subrogation case where the litigated issue was the
insurer's right to settlement proceeds where the insured had separately settled
for property damage and physical injury. A normal subrogation right is
authenticated in result by the decision favoring the insurer on its subrogation
interest against the insured who uncooperatively had settled without overtly
protecting the insurance company. The validity of the subrogation right was
recognized.
7 It is recognized that a
number of cases, particularly medical malpractice actions, look at suits by the
first tort-feasor against the aggravating second actor. We see no reason to
differentiate the suit by the passive actor, second tort-feasor against the
principally negligent original tort-feasor where the litigable purpose is
allocation of damages from fault. Cf. 73 Am.Jur.2d Subrogation §§ 39 and 40
(1974).
We take heed of the
statement of the Vermont court in Norfolk & Dedham Fire
Ins. Co. v. Aetna Cas. & Sur. Co., 132 Vt. 341, 318 A.2d 659, 662 (1974):
[T]he right of
subrogation is a favorite of the law, and the tendency is to extend its
application. It is highly equitable in character and is regarded as one of the
benevolences of the law. * * * It is said that the concept of "voluntariness"
should be strictly construed and limited. 16 [G.] Couch, [on Insurance] § 61:54
[(1966)]; 50 Am.Jur. Subrogation § 21.
8 It is worthy to note
that while Wyoming's fictitious name rule, W.R.C.P.
17(d), permits amendment of the pleadings upon discovery of the defendant's true
name, the rule is silent as to the "relation back" of the amendment and the
statute of limitations.
9 We do not consider the
separate issue addressed by the Colorado Supreme Court in Dillingham which
considers the rule provision for reasonable time (or for Wyoming, W.R.C.P. 3 - 60
days) for actual service of process since in this case, the time beyond the
expiration of the statute of limitations was nearly eighteen months. O'Quinn v.
Wedco Technology, Inc., 752 F. Supp. 984 (D.Colo. 1990). See however Ingram v.
Kumar, 585 F.2d 566 (2nd Cir. 1978), cert. denied 440 U.S. 940, 99 S. Ct. 1289,
59 L. Ed. 2d 499 (1979), as cited in Dillingham.
10 There are clearly two
different rules - one based on notice, the Arizona rule of which Gould, 517 P.2d 104 is illustrative, and the other, a diligence rule, where a Rule 15(c)
provision does not exist or is differently applied of which New Jersey, Younger,
566 A.2d 581, and California, Smeltzley v. Nicholson Mfg. Co., 18 Cal. 3d 932,
136 Cal. Rptr. 269, 559 P.2d 624 (1977), are illustrative. See a discussion of
the difference in Kiehn v. Nelsen's Tire Co., 45 Wn. App. 291, 724 P.2d 434
(1986) and Wakuya v. Oahu Plumbing & Sheet Metal, Ltd., 65 Haw. 592, 656 P.2d 84 (1982). Actually, either rule would preclude a "relation back" here for
statute of limitation purposes.
11 The interrogatory
request inquired as to work between 1970 and 1985. NUD argued it was mislead by
the Town's answer because it refers to work performed by Central in 1987, which
was in error. The fact the answer was outside the scope of the question, and was
given on a date almost contemporaneous with the erroneous date, should have
alerted NUD to make further inquiry.
THOMAS, Justice, specially
concurring.
[¶72.] I agree that the case was not ripe for
the entry of summary judgment on any of the theories of liability asserted by
Northern Utilities Division of K N Energy, Inc. (NUD) against the Town of
Evansville
(Town). I join in the reversal of the summary judgment entered in favor of the
Town.
[¶73.] I am not persuaded, however, that the
right of NUD to contribution "rests upon the question of whether NUD and the
Town are joint tort-feasors." Maj. at 833. The authority for that proposition is
drawn from Garner v. Hickman, 709 P.2d 407 (Wyo. 1985), and I find that case
doubtful authority when it is recognized that the Garners' action against
Hickman was for breach of contract, and their action against the Sundance State
Bank was for fraud, bad faith, and unfair dealing. The legal theories asserted
against the two defendants in that case were not such as to allege "the same
injury to * * * property" so as to structure a right of contribution by Garner
against the bank pursuant to Section 1-1-110, W.S. 1977, (right to contribution
among joint tortfeasors) repealed ch. 24 § 2, Wyo. Sess. Laws
(1986).
[¶74.] I prefer to analyze the right to
contribution under the statutory language then in effect which read:
"(a) Except as
otherwise provided in W.S. 1-1-110 through 1-1-113, where two (2) or more
persons become jointly or severally liable in tort for the same injury to person
or property or for the same wrongful death, there is a right of contribution
among them even though judgment has not been recovered against all or any of
them." § 1-1-110(a), W.S. 1977.
The record, as the
majority explains, amply demonstrates the potential for this situation to fit
within the statute. We are not called in this case, any more than we were in
Garner, to become involved in a discussion of whether the operation of the
statute would be limited to those who are joint tort-feasors as defined in
Black's Law Dictionary.
[¶75.] I am in accord that the summary judgment
against Central Contractors Co., Inc. must be affirmed.
CARDINE, Justice,
specially concurring.
[¶76.] I concur in the court's disposition of
this appeal, except that I do not wish to be understood as agreeing that
indemnity is available. I seriously doubt that appellant can sustain a claim
against the Town in indemnity on the facts that now appear in this case.
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