NO. i3114 

TN THE SUPREME COURT OF THE STATE OF MONTANA 

19 75 

S'I'ATE 3fi MON'I'HNA ex re1 NAWD'S 

T.V. AND APPLIANCE INC., et al., 

Relators, 

'CHL DlSTRICT COURT OF THE THIRTEENTH 

JUDICIAL DISTRICT OF THE STATE OF 

MONTANA, IN AND FOR THE COUNTY OF 

YELLOWSTONE, and the HON. ROBERT H. WILSON, 

Judge of the Thirteenth Judicial District, 

Jcdge presiding, 

Counsel of Record: 

For Relators : 

McNamer, Thompson and Cashmore, Billings, Montana 

Charles Cashmore argued Billings, Montana 

Crowley, Kilbourne, Haughey, Hanson 6 Gallagher, 

Billings, Montana 

Allen J. Lerner argued, Billings, Montana 

Submitted : October 30, 1975 

/ - ) , J -' 

fl Clerk 
Mr. Justice Frank I. Haswell delivered the Opinion of the Court. 

Relators seek a writ of supervisory control to review 

and modify a district court order requiring substitution and 

joinder of several parties plaintiff in a damage action. Specifically, the district court of Yellowstone County ordered substitution of fully subrogated insurers for their respective 

insureds as plaintiffs, and ordered joinder of partially subrogated insurers as additional plaintiffs. 

Relators herein filed an action for damages against the 

manufacturer of Magnavox television sets and its subsidiary as 

a result of a fire on November 5, 1971, on the premises of one 

of its franchised retailers in Billings, Montana. The complaint 

alleges the fire was caused by a defectively designed and manufactured TV set. Recovery is sought on the basis of negligence, 

breach of warranty and strict liability in tort. Damages claimed 

include property damage, personal injuries and business losses. 

Plaintiffs in the damage action, relators here, have been 

compensated, in whole or in part, by their respective insurance 

carriers and each carrier has become subrogated, to the extent of 

its payment, to the rights of its insured against defendants. 

Defendants in the damage action moved (1) for summary 

judgment against the plaintiffs who had been fully compensated 

by their respective insurance carriers, and (2) for partial summary 

judgment against those plaintiffs who had been partially compensated by their respective insurance carriers, or in the alternative for joinder of such carriers as real parties in interest. 

Plaintiffs responded by requesting the district court to permit 

ratification in lieu of substitution or joinder for both classes 

of carriers under Rule 17(a), M.R.Civ.P. 

On September 10, 1975, the district court entered an order: 

(1) Denying defendants' motions for summary judgment and partial 
summary judgment, (2) requiring fully subrogated carriers 

substituted for their respective insureds, and (3) requiring 

partially subrogated carriers joined as additional parties plaintiff. 

The issue before this Court is whether the district 

court's order is correct. There is no issue in this proceeding 

court ' s 

concerning the district/ denial of summary judgment or partial 

summary judgment. 

The controlling statute on the remainder of the district 

court's order is Rule 17(a), M.R.Civ.P., which provides in 

pertinent part: 

"(a) Real Party in Interest. Every action shall 

be prosecuted in the name of the real party in 

interest * * *. No action shall be dismissed on 

the ground that it is not prosecuted in the name 

of the real party in interest until a reasonable 

time has been allowed after objection for ratification of commencement of the action by, or joinder 

or substitution of, the real party in interest; 

and such ratification, joinder, or substitution 

shall have the same effect as if the action had 

been commenced in the name of the real party in 

interest." 

At the outset we note that subrogated insurance carriers 

are real parties in interest within the meaning of Rule 17(a), 

M.R.Civ.P., and governed by its provisions. State ex rel. Slovak 

v. Dist. Ct., Mont . , 534 P.2d 850, 32 St.Rep. 420; Bergh 

V. Rogers, Mont . , 536 P.2d 1190, 32 St.Rep. 644. 

The general rule is that a fully subrogated insurer is 

the real party in interest and must bring suit in its own name 

against the wrongdoer responsible for the loss. The reason for 

this rule is that when a loss is fully paid by an insurer and the 

insurer becomes subrogated to the insured's claim against the 

wrongdoer, the insured no longer has a right of action against the 

wrongdoer. United States v. Aetna Casualty & Surety Co., 338 

U.S. 366, 70 S.Ct. 207, 94 L ed 171; J. C. Livestock Sales Inc. 

v. Schoof, 208 Kan. 289, 491 P.2d 560; Connor v. Thompson Con- 
struction and Development Co., (Iowa 1969), 166 N.W.2d 109. 

46 C. J.S. Insurance 5 1209 (c) (2) (b) , p. 171; 6 Wright & Miller, 

Federal Practice and Procedure: Civil 51546, p. 656; 16 Couch 

on Insurance 2d, 561:26. 

Thus fully subrogated carriers will be allowed to be 

substituted as the real parties in interest. The purpose of the 

last sentence of Rule 17(a), M.R.Civ.P., is to insure that good 

faith amendments substituting the real party in interest will be 

allowed and will relate back to the filing of the original suit 

without being barred by the statute of limitations. Courts are 

lenient in allowing substitution when an honest mistake has been 

made in determining which party should file suit. Substitution 

brings the party actually entitled to recover into the suit, 

making it res judicata and protecting the defendant from a subsequent suit by this party. 3A Moore's Federal Practice 2d, 

Para. 17.01[8], 17.02, pp. 24, 25, 53. We find no reason to 

hold otherwise under Montana's Rule 17 (a) . 

When an insurance carrier pays only part of its insured's 

loss because the loss exceeds the coverage of the insurance policy 

or the policy contains a deductible amount, both the insured 

and the carrier have a claim for relief against the wrongdoer 

and either may bring suit in his own name to the extent of his 

respective claim. In federal courts, in the past, the rule 

generally has been that when either the insured or the insurer 

sues and the other party does not voluntarily join in bringing 

the suit, the defendant can move to have the absent party joined 

to protect himself from multiple law suits. United States v. 

Aetna Cas. & Surety Co., supra; 6 Wright & Miller, Federal Practice and Procedure: Civil S1546, pp. 659, 660. 

Joinder, however, is no longer the only method of protecting the defendant from multiple law suits. In 1966 the 
federal Rule of Civil Procedure 17(a) was amended to allow 

"ratification of commencement of the action by, or joinder or 

substitution of, the real party in interest" when the defendant objects to the absence of the real party in interest from 

the suit. Montana similarily amended its Rule of Civ. Procedure 

17(a), by an order of this Court dated September 29, 1967, 

effective January 1, 1968. 

Since the federal amendment in 1966, ratification has 

principally been used to bind a partially subrogated insurance 

carrier to the law suit initiated by its insured. Southern 

National Bank of Houston, Tex. v. Tri Financial Corp., 317 

F.Supp. 1173. Other cases approving ratification include: Honey 

v. George Hyman Construction Co., 63 F.R.D. 443; Pace v. General 

Electric Company, 55 F.R.D. 215; Urrutia Aviation Enterprises, 

Inc. v. B.B. Burson & Asso. Inc., 406 F.2d 769. 

The present rule has been construed in this language in 

6 Wright & Miller, Federal Practice and Procedure Civil B 1555, 

p. 709: 

"Formal joinder or substitution of the real party 

in interest will not be necessary when he ratifies 

the commencement of the action. * * *" 

Ratification will bind the partially subrogated insurance 

carriers to the present litigation and allow defendants to present 

all of their defenses as well as protect them from subsequent 

law suits. 

Respondent contends that Rule 17(a) gives the district 

court the discretionary power to determine whether compliance 

will be by joinder or ratification. It is argued that since 

the district court has ordered compliance by joinder the judgment cannot be overturned unless the court abused its discretion. 

This contention is not supported by the plain language of the 

statute. In the construction of a statute, the function of the 
court is simply to ascertain and declare what is in terms or 

substance contained in the statute and not to insert what has 

been omitted. Section 93-401-15, R.C.M. 1947; Dunphy v. Anaconda Co., 151 Mont. 76, 438 P.2d 660. 

Rule 17(a), M.R.Civ.P., does not grant the district 

court discretionary power to pick the method of complying with 

the rule. The rule plainly provides that a reasonable time will 

be given to allow the real party in interest to bind himself to 

the suit by ratification, joinder, or substitution, The method 

of compliance is optional with the real party in interest. For 

the district court to have the discretionary power to determine 

the mode of compliance, the language of the rule would have to 

be changed. The accomplishment of such change under the guise 

of construction would give the rule an added meaning not to be 

found in the plain and unambiguous language of the rule. Montana 

Deaconess Hospital v. Cascade County, 164 Mont. 256, 521 P.2d 

203; Ross v. City of Long Beach, 24 Cal.2d 258, 148 P.2d 649; 

Scott v. Society of Russian Israelites, 59 Neb. 571, 81 N.W. 624. 

Defendants in the district court will be as adequately 

protected through ratification by partially subrogated insurance 

carriers as by joinder in the light of the purposes of the real 

party in interest requirement of Rule 17(a), M.R.Civ.P. 

The order of the district court is modified to permit 

ratification at the option of partially subrogated insurance 

carriers. In all other respects, the writ is denied. 

Justice 

/ / Chief Justice