Case Title: EMPLOYERS MUT. v. JAMES MOSBY

Citation: 

Docket Number: 85967

State: oklahoma

Court: Oklahoma Supreme Court

Date: 1997-07-08T00:00:00Z

Document:
EMPLOYERS MUT. v. JAMES MOSBY  EMPLOYERS MUT. v. JAMES MOSBY 1997 OK 93 943 P.2d 593 68 OBJ 2471 Case Number: 85967 Decided: 07/08/1997 Supreme Court of Oklahoma EMPLOYERS MUTUAL CASUALTY COMPANY, as Subrogee of Jannette Embry, Appellant, v. JAMES MOSBY, DENNIS CHILDERS, and COUNTRY MUTUAL INSURANCE CO., d/b/a COUNTY COMPANIES INSURANCE GROUP, Appellees. ON CERTIORARI TO THE COURT OF CIVIL APPEALS DIVISION III ¶0 Insurer seeks review of an opinion of the Court of Civil Appeals which affirmed an order by the trial court dismissing the insurer's subrogation claim against the tortfeasor in an automobile collision, the car's owner, liability carrier. Certiorari was granted as a conflict exists between the divisions of the Court of Civil Appeals. We herein hold that claims for subrogation by an Uninsured Motorist carrier are governed by statute of limitations for the underlying cause of action. CERTIORARI PREVIOUSLY GRANTED; COURT OF CIVIL APPEALS OPINION VACATED; ORDER OF THE TRIAL COURT Galen L. Brittingham, Nelson J. Christiansen, ATKINSON, HASKINS, NELLIS, BOUDREAUX, PHIPPS & BRITTINGHAM, Tulsa, Oklahoma, for Appellant, Employers Mutual Casualty Company. L. Richard Howard, Thomas E. Baker, DANIEL, BAKER & HOWARD, Tulsa, Oklahoma, for Appellee, James Mosby. HARGRAVE, J. SUMMARY OF FACTS AND PROCEDURAL HISTORY ¶1On May 16, 1992 Jannette Embry (insured) was involved in an automobile collision with James Mosby (tortfeasor) who was driving a car owned by Dennis Childers (owner). The insured notified both the owner's liability carrier, Country Companies Insurance Group, and the insured's UM carrier, Employers Mutual Casualty Company (insurer). The latter paid the insured $12,000.00 on November 5, 1993 in settlement of her claim for uninsured motorist coverage. ¶2 On February 8, 1994 the liability carrier, Country Companies, offered to settle the subrogation claim for the owner's policy limit of $10,000.00. The insurer "accepted" the offer six months later on August 22, 1994, at which time the liability carrier refused to [943 P.2d 594] pay because it claimed the two-year statute of limitations had run on the underlying tort claim. ¶3The insurer then brought this action for breach of contract based on the February offer and the August acceptance. The insurer also alleged that the limitations period did not begin to run until November 5, 1993, the day that it paid the insured and acquired its subrogation rights. An estoppel theory was also alleged. ¶4The tortfeasor, owner, and liability carrier moved for dismissal, arguing that the claim was time-barred. The trial court dismissed the action, and the insurer sought reconsideration. The trial court sustained the motion to reconsider. The liability carrier asserted that the insurer's August 22, 1994, acceptance letter was actually a counter-offer because it contained terms and conditions not made in the original offer, and hence no contract was formed, and no breach of contract. The trial court again dismissed the action finding the claim to be time-barred. The insurer appealed. ¶5 Insurer, Employers Mutual, argued before the Court of Civil Appeals that the three year statute of limitations for breach of oral contract was applicable and thus, the trial court was in error to dismiss their subrogation action. The Court of Civil Appeals affirmed, holding that "the underlying cause of action . . . . determines the applicable statute of limitations. Here, the event underlying Employers' cause of action is the automobile accident. Action for negligence must be brought within two years from the date the cause of action accrued. 12 O.S. 1991§95(3). Appellant did not bring an action within that two year limit. ¶6The dispute on appeal deals with the appropriate statute of limitations regarding a subrogated UM claim. The Court of Civil Appeals opinion in the present matter is in conflict with holding of the Court of Civil Appeals in the unpublished case Northland Insurance Companies v. Nance, (No. 83,084 April 12, 1994). However, the present case is in conformity with the published case of Farmers Insurance Co. v. Stark., 924 P.2d 798 (Okla. App. 1996). [Certiorari Denied] We specifically overrule the Court of Civil Appeals' holding in Northland . ¶7 In Northland the Court of Civil Appeals held that a three year statute of limitation would apply under a similar fact pattern. The Court of Civil Appeals cited Uptegraft v. Home Insurance Co., 662 P.2d 681 (Okla.1983), for the proposition that a UM insurer's obligation to pay under the policy is not dependent on the insured's right to sue the tortfeasor. [T]his analysis overlooks the fact that the purported tortfeasor was not a party to the insurance contract. The rights between the insurer and its insured arise from contract, but any rights against the tortfeasor, whether those of the insured plaintiff or rights gained by the insurer through subrogation, are not based on contract. 924 P.2d at 801. ¶8A subrogee does not obtain a longer limitations period based merely on the fact that it did not gain its subrogation rights at the same time that its insured's claim accrued. A subrogee steps into the shoes of the plaintiff "subject to all legal and equitable defenses which the [tortfeasor] may have against the [plaintiff]." Moore v. White, 603 P.2d 1119 , 1121 (Okla.1979) See also, Niemeyer v. U.S. Fidelity & Guaranty Co., 789 P.2d 1318 , 1322 (Okla. 1990). A subrogee acquires no rights greater than those of the party whose claim it has paid. United States v. Munsey Trust Co., 332 U.S. 234 , 242, 67 S. Ct. 1599, 1603, 91 L. Ed. 2022 (1947). ¶9 A claim obtained through subrogation is simply not subject to the normal rule of accrual of a cause of action. The subrogee steps into the shoes of its claimant and takes the claim subject to defenses based on the date of accrual to the claimant. Insurer's claim in the present matter is based upon an automobile accident, an action for negligence. Actions for negligence must be brought within two years from the date the cause of action accrued. 12 O.S. 1991§95(3) CERTIORARI PREVIOUSLY GRANTED; COURT OF CIVIL APPEALS OPINION VACATED; ORDER OF THE TRIAL COURT ¶10SUMMERS, V.C.J., HODGES, LAVENDER, HARGRAVE, WILSON, WATT, JJ., CONCUR. ¶11KAUGER, C.J., SIMMS, OPALA, JJ., CONCUR IN PART AND DISSENT IN PART. FOOT