Case Title: Lopez v. Concord General

Citation: 

Docket Number: 

State: vermont

Court: Vermont Supreme Court

Date: 1989-06-01T00:00:00Z

Document:
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, 111 State Street, Montpelier, Vermont 05602 of any errors in order
that corrections may be made before this opinion goes to press.


                                No. 88-609


Armando Lopez                                Supreme Court

                                             On Appeal From
     v.                                      Addison Superior Court

Concord General Mutual                       June Term, 1989
Insurance Group


Hilton H. Dier, Jr., J.

John L. Kellner of Langrock Sperry Parker & Wool, Middlebury, for
  plaintiff-appellee

John H. Tarlow and Christopher Roy, Law Clerk (On the Brief) of Downs
  Rachlin & Martin, Burlington, for defendant-appellant


PRESENT:  Peck, Dooley and Morse, JJ.


     DOOLEY, J.   Defendant, Concord General Mutual Insurance Group, appeals
from an order in a declaratory judgment action granting a motion for summary
judgment filed by plaintiff, Armando Lopez, and denying defendant's motion.
Defendant raises two issues:  (1) that the trial court erred in holding that
Concord had waived its right to collect its subrogated interest from a
settlement fund, and (2) that if there was no waiver, then it should not be
obligated to pay a portion of plaintiff's attorney's fees.  Because we find
that summary judgment was inappropriate in this case, we reverse and remand.
     On February 8, 1985, plaintiff was injured when his automobile
collided with a vehicle owned by Ryder Truck Rental (Ryder).  Plaintiff's
insurance company, Concord, paid $4,244.46 for medical expenses incurred
from the accident.  Pursuant to its policy with plaintiff, Concord had a
subrogation right to that amount.  The proof-of-claim forms signed by
plaintiff provided: "I (we) hereby subrogate the said Company to all rights
and causes of action I (we) have against any person, persons or corporation
whomsoever for the above listed claim for services arising out of or
incident to said accident."  Defendant informed plaintiff's attorney of its
subrogated interest, requesting that "[w]hen you settle the claim with the
adverse party, would you kindly keep our claim in mind."  Subsequently,
plaintiff filed a personal injury action against Ryder in Addison Superior
Court. (FN1) Plaintiff's attorney notified defendant of the  pending action and
asked defendant to recognize his contingency fee arrangement in the event of
a recovery.  In response, defendant wrote to plaintiff's attorney, stating
that
         We are dealing directly with Ryder . . . .  We do not
         want you to handle our subrogation claim.  We are
         dealing direct with them and expect that when the claim
         is eventually settled, they will reimburse us directly
         by separate payment.  So, you will be representing only
         Mr. Lopez in this matter.

Defendant sent a copy of this letter to Ryder, along with a request that any
payments for the subrogated medical claims be made directly to defendant.
In fact, in the letter sending Ryder proof of the last of the payments to
plaintiff, defendant's claims manager states:  "we would hope that you would
send your draft in [the total] amount direct to us without putting the
insureds attorney or the insureds name on it."
     Ryder answered plaintiff's suit denying liability.  Without defendant's
assistance or authorization, plaintiff's attorney engaged in extensive
pretrial discovery, prepared the case for trial, drew a jury, and began
trial against Ryder.  During the trial, plaintiff's attorney negotiated a
$38,000.00 settlement with Ryder.  There was no mention of defendant's
subrogation claim during the settlement discussions.  Ryder's attorney gave
no indication that defendant's subrogated claim was included in the
$38,000.00 sum.  In connection with this settlement, plaintiff's attorney
instructed plaintiff to sign a general release, releasing Ryder from all
claims of the plaintiff.  This release was given without defendant's
consent, ostensibly in contravention of written agreements between defendant
and plaintiff. (FN2) Without the agreement of plaintiff or his attorney, and
without any prior discussion, Ryder sent two separate checks to satisfy its
settlement agreement.  One check was made out to plaintiff and plaintiff's
attorney, in the amount of $33,375.54.  The second check, made out to
defendant, plaintiff, and plaintiff's attorney, was in the amount of
$4,244.46  -- the exact sum of the subrogated medical payments.  Plaintiff's
attorney objected to Ryder's unilateral deduction of this sum from the
$38,000.00 settlement, on the ground that the $38,000.00 figure as
negotiated by plaintiff's attorney and Ryder's attorney was not intended to
include defendant's subrogation claim.  Both plaintiff and defendant claimed
entitlement to the $4,244.46 check.  Defendant also rejected the demand of
plaintiff's attorney for a one-third share of the check should defendant be
entitled to it.
     Plaintiff filed a declaratory judgment action against defendant to
determine the proper distribution of the $4,244.46.  Ryder was not made a
party to the action.  The parties agreed on a stipulation of facts and then
each filed a motion for summary judgment with an affidavit.  Plaintiff's
affidavit was of his attorney and described his dealings with defendant's
claims adjuster and the attorney for Ryder.  Defendant's affidavit was of
the claims adjuster and described his dealings with Ryder and plaintiff's
attorney.  The trial court granted plaintiff's motion and denied that of the
defendant.  Defendant appeals, asserting first that it was error to grant
plaintiff's motion and deny its motion.
     Defendant's primary claim is that the lower court erred in holding that
defendant waived its right to collect its subrogation claim from the pro-
ceeds of the settlement.  Resolution of this claim involves two separate
inquiries: (1) whether defendant effectively waived its right to reimburse-
ment from plaintiff's recovery; and (2) if so, whether the waiver covers the
three-party check sent by Ryder.
     Before addressing the questions, we begin by examining the summary
judgment standard here and in the trial court.  The trial court can grant
summary judgment only if it clearly finds from the materials before it that
there is no genuine issue as to any material fact and that the moving party
is entitled to judgment on the law.  V.R.C.P. 56(c); Messier v. Metropolitan
Life Ins. Co., ___ Vt. ___, 578 A.2d 98, 99 (1990).  In this process, the
opponent to the motion must be given the benefit of all reasonable doubts
and inferences in determining whether a genuine issue exists.  Weisburgh v.
Mahady, 147 Vt. 70, 72,