Title: Stilson v. Hodges

State: wyoming

Issuer: Wyoming Supreme Court

Document:

Stilson v. Hodges1997 WY 35934 P.2d 736Case Number: 96-165Decided: 02/28/1997Supreme Court of Wyoming

Lucy 
M. STILSON,

Appellant(Plaintiff),

 

v.

 

DAINA B. HODGES,

Appellee(Defendant).

 

Appeal 
from the District Court of Teton County

The 
Honorable D. Terry Rogers

 

Representating Appellant: 

Lawrence B. Hartnett, Jackson

 

Representating Appellee: 

David B. Hooper of Hooper Law Offices, P.C., 
Riverton

 

Before TAYLOR, C.J., and THOMAS, 
MACY and LEHMAN, JJ., and W. THOMAS SULLINS, District Judge.
 

MACY, 
Justice.

 [¶1]      Appellant Lucy 
Stilson appeals from the trial court's order which granted Appellee Daina 
Hodges's motion to compel satisfaction of a judgment.

 

[¶2]      We 
affirm.

 

ISSUE

 

[¶3]      Stilson presents 
a single issue in her appeal:

 

Did the trial court err by allowing the appellee to 
satisfy the judgment against her by paying the same to the clerk of the district 
court, and by denying the appellant the right to receipt or use of any portion 
of her judgment until appellant provided the court with a release from her own 
insurance company, releasing appellee's insurance company and appellee from any 
liability to appellant's insurance company arising from appellant's insurance 
compan[y's] claimed subrogation rights to a portion of the judgment 
proceeds[?]

 

FACTS

 

[¶4]      On November 21, 
1990, Stilson and Hodges were involved in an automobile accident in Jackson. 
Stilson's insurer, Allstate Insurance Company, paid Stilson's medical expenses. 
Allstate then sent three letters to Hodges's insurer, State Farm Fire and 
Casualty Company, stating that Hodges was responsible for the accident and that 
Stilson had assigned her claim against Hodges to Allstate. In one of the 
letters, Allstate stated: "Please accept this letter as notice of our 
subrogation claim." Another letter instructed State Farm as follows: "[P]lease 
do not make any bodily injury liability settlements with our insured unless you 
satisfy or protect our interests." The last letter stated that Allstate had paid 
$3,092.48 for Stilson's medical expenses.

 

[¶5]      On November 3, 
1994, Stilson filed a personal injury action against Hodges. In addition to the 
other damages which she was claiming, Stilson claimed the expenses which she had 
incurred for her medical care. A trial was held, and the jury returned a verdict 
which found that the total amount of Stilson's damages was $21,500 and that 
Stilson was thirty percent at fault and Hodges was seventy percent at fault. In 
accordance with the jury's verdict, the trial court entered a judgment for 
$15,050 in favor of Stilson.

 

[¶6]      State Farm 
attempted to satisfy the judgment on behalf of Hodges by tendering a $12,147.18 
check which was made payable to Stilson and her attorney and a $3,092.48 check 
which was made payable to Stilson and Allstate. The total of these checks 
equaled the judgment amount plus interest. Stilson refused to accept the 
payments because she did not agree that the second check should be made payable 
to her and Allstate jointly.

 

[¶7]      Hodges filed a 
motion to compel satisfaction of the judgment. In her motion, Hodges 
stated:

Since [Stilson] proceeded to prosecute to judgment 
all of her claims and since Allstate had given [Hodges's] insurer notice of its 
subrogation rights, the only way for State Farm to protect itself and [Hodges] 
from double liability was to pay the Judgment in accordance with the known 
interest[s] of [Stilson] and [Stilson's] insurance 
company.

 

[¶8]      After holding a 
hearing, the trial court granted Hodges's motion and made the following 
pertinent rulings:

2. [Hodges] shall tender the principal sum of the 
Judgment in the amount of $15,050.00 together with accrued interest at 10% per 
annum from November 6, 1995, to the Clerk of the District 
Court.

3. Upon the payment of the principal amount of the 
Judgment and all accrued interest, the Clerk of the District Court shall execute 
a Satisfaction of Judgment on a form provided by [Hodges].

4. The Clerk of the District Court shall thereafter 
hold the funds in her bank account until [Stilson] shall present to the Clerk a 
release from Allstate Insurance Company releasing State Farm Insurance and 
[Hodges] from any liability for the lien declared by Allstate Insurance Company 
on the proceeds of this lawsuit.

 

Hodges tendered the payment, 
and the clerk of the district court entered a satisfaction of judgment. Stilson 
appealed to this Court.

DISCUSSION

 

[¶9]      Stilson maintains 
that the trial court erred when it ordered Hodges to submit the judgment amount 
to the clerk of the district court and ordered the clerk to enter a satisfaction 
of judgment in favor of Hodges and to hold the funds until Stilson presented a 
release from her insurance company. We will first consider whether the trial 
court had the authority to order Hodges to submit the judgment amount to the 
clerk of the district court and to order the clerk to enter a satisfaction of 
judgment after receiving the money.

 

[¶10]   Wyoming's rules of civil procedure 
allow a judgment debtor to deposit funds in satisfaction of a judgment with the 
court. W.R.C.P. 67; see also Parker v. 
Artery, 889 P.2d 520, 527 (Wyo. 1995). When the judgment debtor has paid the 
judgment amount, the district court may order that a satisfaction of judgment be 
entered. See Amerigas Propane, Inc. v. 
Bing, 875 P.2d 1276, 1277-78 (Wyo. 1994); see also WYO. STAT. §§ 1-16-308 to -309 
(Supp. 1996). We conclude, therefore, that the trial court had the authority to 
order Hodges to submit the amount of the judgment debt to the clerk of the 
district court and to order the clerk to enter a satisfaction after Hodges 
satisfied the judgment.

 

[¶11]   We must now decide whether the 
trial court properly ordered that Stilson had to provide a release from Allstate 
before she could receive the money from the clerk. In its letters to State Farm, 
Allstate stated that it had subrogation rights because Stilson had assigned a 
portion of her claim to Allstate. Conventional subrogation, which can take 
effect only by agreement, is synonymous with assignment. Northern Utilities Division of K N Energy, 
Inc. v. Town of Evansville, 822 P.2d 829, 836 (Wyo. 1991). Subrogation is 
defined as being "`the substitution of another person in the place of a 
creditor, so that the person in whose favor [the subrogation] is exercised 
succeeds to the rights of the creditor in relation to the debt.'" Commercial Union Insurance Company v. 
Postin, 610 P.2d 984, 986 (Wyo. 1980) (quoting Criss v. Folger Drilling Company, 195 
Kan. 552, 407 P.2d 497, 500 (1965)). "[I]n 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." Northern Utilities Division of K N Energy, 
Inc., 822 P.2d  at 837. Likewise, a judgment creditor may assign his rights 
in the judgment to a third party. 47 AM.JUR.2D Judgments § 1011 
(1995).

 

[¶12]   The assignment of a part of a debt 
transfers an equitable interest in that part of the debt to the assignee. 6 
AM.JUR.2D Assignments § 81 (1963). In 
order to prevent the debtor from paying the assignor, the assignee must give the 
debtor notice that the assignment has been made. See id. "The general rule is that if the 
debtor pays the assignor after notice of a partial assignment of the debt, [the 
debtor] may be held liable in equity by the assignee." Id. at 262. See also Independent National Bank v. 
Westmoor Electric, Inc., 164 Ariz. 567, 571, 795 P.2d 210, 214 (Ct.App. 
1990); Mid-States Sales Company, Inc. v. 
Mountain Empire Dairymen's Association, Inc., 741 P.2d 342, 347 
(Colo.Ct.App. 1987).

 

[¶13]   In this case, Hodges and State Farm 
received notice that Stilson had assigned a part of her claim against Hodges to 
Allstate because Allstate had paid Stilson's medical expenses. After receiving 
the assignment notice, Hodges and State Farm were obligated to pay Allstate's 
claim, and, should they fail to do so, they would risk being held liable to 
Allstate.

 

[¶14]   Stilson argues that the trial court 
did not have the authority to create a lien against her judgment proceeds in 
favor of Allstate. She contends that statutory authority which would allow such 
a lien to be established did not exist and that the record does not contain any 
evidence which supports the creation of a lien by contract. Although the trial 
court did call Allstate's interest a lien, we do not believe that the trial 
court used the term "lien" in a technical sense. Allstate's asserted interest in 
the proceeds from Stilson's judgment is more accurately described as being an 
equitable interest rather than as being a lien. 6 AM.JUR.2D, supra, at § 81. Since Allstate's 
interest was not technically a lien, we do not need to determine whether the 
trial court had the authority to create a lien in favor of 
Allstate.

 

[¶15]   Stilson also asserts that the trial 
court erred by effectively allowing Allstate to have a prejudgment attachment 
against her property. Once again, Stilson mischaracterizes the nature of 
Allstate's claim. Allstate simply asserted an equitable interest in the judgment 
proceeds and did not request or receive any prejudgment attachment 
right.

 

[¶16]   Stilson contends further that, 
since the trial court decided matters which concerned Allstate, Allstate should 
have been joined as a party in this case. In addressing Stilson's contention, we 
must identify what matters the trial court did and did not address in its order. 
The trial court's order required Stilson to get confirmation that Allstate was 
releasing Hodges and State Farm from further liability. The order did not 
adjudicate any dispute between Stilson and Allstate. The trial court did not 
determine whether the assignment was effective or whether Stilson was required 
to reimburse Allstate for the medical expenses which it had paid on her behalf. 
Those matters should be settled directly between Stilson and Allstate. The 
controversy between Stilson and Allstate is of no concern to Hodges and State 
Farm so long as Allstate cannot hold Hodges and State Farm liable for failing to 
recognize the assignment. When the trial court required Stilson to get a release 
before she could obtain the funds from the clerk of the district court, the 
trial court properly acknowledged Allstate's asserted equitable interest in the 
judgment proceeds and sought to protect Hodges and State Farm from further 
liability to Allstate.

 

[¶17]   Affirmed.

 

[¶18]   TAYLOR, Chief Justice, 
dissenting, with whom W. THOMAS SULLINS, District Judge, 
joins.

 

[¶19]   I respectfully 
dissent.

 

[¶20]   Lucy Stilson, after pursuing her 
personal injury case to judgment, is now placed in the untenable position of 
defending a subrogation claim involving parties, claims and demands outside of 
the issues involved in the litigation.

 

[¶21]   Allstate Insurance Company was 
satisfied with informing State Farm Fire and Casualty Company of their claim on 
three occasions prior to Stilson obtaining judgment in her action against Daina 
Hodges. Allstate had ample opportunity to intervene under the provisions of 
W.R.C.P. 24, but complaisantly stood by, apparently confident that State Farm 
would carry the day for them.

 

[¶22]   State Farm, although aware for 
almost three years of Allstate's claim, now fear they will be faced with double 
liability if they pay the judgment awarded to Stilson in her civil action. State 
Farm had every opportunity to resolve the subrogation claim by the simple 
expedient of joining Allstate in the action under the provisions of W.R.C.P. 
22.

 

[¶23]   I believe the judgment should be 
paid to Stilson, and the insurance companies having failed to exert their 
claims, should now be left to their own devices.

 

[¶24]   I would reverse.