Case Title: Guiel v. Allstate Insurance Company

Citation: 170 Vt. 464, 756 A.2d 777

Docket Number: 

State: vermont

Court: Vermont Supreme Court

Date: 2000-04-28T00:00:00Z

Document:
Guiel v. Allstate Insurance Company  (99-046); 170 Vt. 464; 756 A.2d 777

[Filed 28-Apr-2000]

       NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well as formal  revision before publication in the Vermont
  Reports.  Readers are requested to notify the Reporter  of Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
  any  errors in order that corrections may be made before this opinion goes
  to press.

                                 No. 99-046

Jo-Anne Guiel	                               Supreme Court

                                               On Appeal from
     v.	                                       Chittenden Superior Court

Allstate Insurance Company	               December Term, 1999

Matthew I. Katz and Edward J. Cashman, JJ.

       Geoffrey W. Crawford of O'Neill Crawford & Green, Burlington, for
  Plaintiff-Appellee.

       Charles Platto and Eric D. Jones of Brooks McNally Platto & Vitt,
  Norwich, for Defendant-Appellant.

PRESENT:  Amestoy, C.J., Dooley, Morse, Johnson and Skoglund, JJ.

       AMESTOY, C.J.   In response to the parties' cross-motions for summary
  judgment in this  declaratory judgment action, the superior court ruled
  that plaintiff Jo-Anne Guiel, who had obtained  a settlement in a prior
  lawsuit seeking damages for injuries she sustained in an automobile
  accident,  was entitled to deduct a proportionate share of the attorney's
  fees she incurred in the prior lawsuit  from her insurer's subrogation
  interest in the settlement.  On appeal, her insurer, defendant Allstate 
  Insurance Company, contends that it should not have to pay a proportionate
  share of plaintiff's  attorney's fees because it informed plaintiff that it
  was actively pursuing its subrogation claim  directly against the
  tortfeasor's insurer in an independent arbitration proceeding.  In the
  alternative, 

 

  Allstate argues that the court acted improperly and prematurely by deciding
  the matter in a summary  judgment ruling.  We affirm.

       The material facts are not in dispute.  On March 22, 1994, a truck
  owned by Barrett Trucking  Company struck the vehicle plaintiff was
  driving.  At the time of the accident, plaintiff was covered  by an
  Allstate automobile insurance policy.  Plaintiff filed a claim with
  Allstate for medical expenses  and property damage.  In August 1994,
  Allstate wrote to Barrett Trucking's insurer, CNA Insurance  Company,
  stating that Allstate was entitled to subrogation of any payments made to
  plaintiff arising  from injuries she sustained in the Barrett Trucking
  accident, and asking that CNA protect Allstate's  right of subrogation in
  dealing with plaintiff.  In January 1995, Allstate wrote to the attorney
  retained  by plaintiff, stating that its policy allowed it to subrogate
  directly to the liability carrier any amount  paid under the medical
  payments coverage, and noting that it had already advised CNA of Allstate's 
  right of subrogation.  In May 1995, Allstate again wrote to CNA, this time
  indicating how much  money it had paid plaintiff up until that point, and
  stating that it expected to be paid directly for its  subrogation claim. 
  Allstate wrote to CNA a final time in February 1996, reiterating that CNA
  was  responsible for reimbursing Allstate directly for all amounts paid to
  plaintiff "at the time of any  settlement of her claim."

       In April 1996, plaintiff filed a negligence action against Barrett
  Trucking.  That claim was  joined with a lawsuit plaintiff filed at the
  same time against another driver for injuries she sustained  in a July 30,
  1993 accident.  Both plaintiff and the defendants retained medical experts,
  who were  deposed at some point during the ensuing two years as the case
  progressed toward trial.  The parties  disputed causation, apportionment of
  damages, and the reasonableness and necessity of plaintiff's  medical
  charges.  In March 1998, Allstate declined to participate in a mediation
  session between 

 

  plaintiff and Barrett Trucking.  On March 30, 1998, shortly before the
  scheduled trial was to take  place, plaintiff settled her claim against
  Barrett Trucking for $105,000.  The parties' agreement  expressly stated
  that the settlement amount included the $54,747 in medical payments that
  Allstate  had made to plaintiff up until that point.  The claim against the
  other defendant went to trial and  resulted in a $150,000 plaintiff's
  verdict.

       Meanwhile, on March 20, 1997, Allstate had filed a request for
  inter-company arbitration  with CNA.  Stating that it was filing for
  arbitration at that time only to prevent the tolling of the  statute of
  limitations, Allstate requested that the proceedings be deferred on the
  grounds that plaintiff  had not reached a medical end result and was still
  receiving benefits.  Eventually, an arbitration  hearing was set for March
  17, 1998, but was tentatively rescheduled, at Allstate's request, for March 
  20, 1999, "due to companion claims and/or suits pending."  Apparently,
  Allstate sought an  arbitration hearing following resolution of plaintiff's
  lawsuits against the tortfeasors.  No hearing  ever took place, however.

       On April 16, 1998, plaintiff filed the instant declaratory judgment
  action, requesting that the  superior court reduce Allstate's subrogation
  recovery by a proportionate share of the one-third  contingency fee and
  other expenses she incurred in settling the Barrett Trucking claim.  The
  parties  filed cross-motions for summary judgment.  The superior court
  granted plaintiff's motion and denied  Allstate's motion, ruling that under
  the "common fund" doctrine Allstate was obligated to pay a  proportionate
  share of the attorney's fees that plaintiff incurred in creating a common
  fund from  which Allstate benefitted without actively pursuing its
  subrogation interest independently.  On  appeal, Allstate argues that (1)
  Vermont does not recognize the common-fund doctrine; (2) the  doctrine does
  not apply when the insurer elects to arbitrate its subrogation claim; (3)
  the superior 

 

  court inappropriately resolved inferences in plaintiff's favor; and (4) the
  court did not give Allstate  an opportunity to develop a factual record
  that could establish exceptions to the common fund  doctrine.

       "In reviewing a grant of summary judgment, we apply the same standard
  as the trial court."  St. Albans v. Northwest Reg'l Planning Comm'n, 167
  Vt. 466, 469,