Title: Alfa Mut. Ins. Co. v. Head
Citation: 655 So. 2d 975
Docket Number: 1931331
State: Alabama
Issuer: Alabama Supreme Court
Date: February 10, 1995

655 So. 2d 975 (1995)
ALFA MUTUAL INSURANCE COMPANY
v.
Barbara HEAD, et al.
1931331.

Supreme Court of Alabama.
February 10, 1995.
*976 Alex L. Holtsford, Jr. of Nix, Holtsford &amp; Vercelli, P.C., Montgomery, for appellant.
Richard C. Dean, Jr. and Sabrina L. McKinney, Montgomery, for Lauren and Barbara Head.
SHORES, Justice.
In November 1993, Kent Edgar Davis was operating a motor vehicle in Elmore County, Alabama. His vehicle collided with a motor vehicle driven by Barbara Head and occupied by Lauren Head, a minor child.
At the time of the accident, Barbara Head and Lauren Head were insured under a policy of insurance issued by Alfa Mutual Insurance Company ("Alfa"). Davis was insured by Hartford Insurance Company ("Hartford").
In December 1993, Barbara Head and Lauren Head sued Davis, alleging that he had caused the accident. In their complaint, they sought, among other things, damages for bodily injuries, pain and suffering, loss of employment, and property damage. Alfa moved to intervene, alleging that, as a result of the damage done to Barbara Head's vehicle it had paid her $6,948.56 in collision damage benefits and that, because it had paid Barbara Head those insurance benefits, it was subrogated to any recovery awarded to Barbara Head and Lauren Head in their action against Davis.
The trial court denied Alfa's motion to intervene, holding that Alfa had a contractual right to subrogation, but that the subrogation right did not exist until the plaintiffs' claims were tried and damages were set by a jury or a settlement was reached between the plaintiffs and the defendant. Alfa appeals from the order denying intervention. We affirm.
During the course of the litigation, counsel for the plaintiffs indicated to Alfa that he would deduct a pro rata share of attorney fees and costs of litigation from the amounts to be paid to Alfa for reimbursement pursuant to its subrogation interest (when it is determined that Barbara Head has been made whole). Counsel for the Heads claims that he is entitled to the attorney fees and costs of litigation under the "common fund" doctrine. Alfa denied that counsel for the Heads was entitled to any portion of the subrogation amount. The trial court made no ruling on this issue.
*977 Alfa raises two issues: First, whether Alfa's right of subrogation made it error for the trial court to deny its motion to intervene, and second, whether the "common fund" doctrine requires Alfa to pay a pro rata share of the plaintiffs' attorney fees and the costs of the litigation.
Alfa moved to intervene under A.R.Civ.P. 24(a)(2) or 24(b)(2). Rule 24(a)(2) provides for intervention of right:
Rule 24(b)(2) provides for permissive intervention:
To determine whether Alfa has a right to intervene, we must determine the "interest" necessary to support that right. The insurer has no right to subrogation unless and until the insured has been made whole for the loss. Powell v. Blue Cross &amp; Blue Shield of Alabama, 581 So. 2d 772 (Ala. 1990); Sharpley v. Sonoco Products Co., 581 So. 2d 792, 794 (Ala.1990); McKleroy v. Wilson, 581 So. 2d 796 (Ala.1990); Peck v. Dill, 581 So. 2d 800 (Ala.1991); Complete Health, Inc. v. White, 638 So. 2d 784 (Ala.1994). In Powell we discussed at length when an indemnitor's right to subrogation arises:
581 So. 2d  at 777 (emphasis supplied).
Alfa seeks reimbursement of $6,498.56 for the benefits it paid Barbara Head under her collision coverage. Alfa argues that, because this case involves a property damage reimbursement claim, and not a health insurance claim, as in Powell and Complete Health, there is no reason why its subrogation right has not yet arisen in the circumstances of this case. We disagree. In Powell this court stated:
581 So. 2d  at 778 (emphasis added). In Powell, this Court also stated:
581 So. 2d  at 779.
Based on this authority, we hold that Alfa's subrogation claim does not arise until the plaintiffs' recovery from all sources, including any recovery for property damage, exceeds the total of the plaintiffs' damage or loss. Once the Heads have been made whole for their losses caused by the accident with Davis, then Alfa's right to subrogation will arise. Powell, supra. At this time, Alfa does not have a direct, substantial, and protectable interest, because it does not appear that the plaintiffs have been fully compensated for their loss. Because Alfa lacks such an *978 interest under Rule 24(a)(2), it may not intervene as of right.
Permissive intervention under Rule 24(b)(2) is within the discretion of the trial court, and we will not reverse the trial court's ruling on that question absent an abuse of that discretion. McKleroy v. Wilson, 581 So. 2d 796, 799 (Ala.1990); Universal Underwriters Ins. Co. v. East Central Alabama Ford-Mercury, Inc., 574 So. 2d 716, 723 (Ala.1990). Unlike Rule 24(a)(2), Rule 24(b)(2) is a discretionary tool to be used by the trial court. We find no abuse of discretion in the trial court's order denying intervention.
We further note that the issue of attorney fees is not yet ripe for review, because there has been no recovery and no trial court ruling on the issue. Nonetheless, the trial court may find our decision in CNA Insurance Companies v. Johnson Galleries of Opelika, Inc., 639 So. 2d 1355 (Ala.1994), instructive on this issue. In holding that a liability insurer's subrogation interest in an insured retailer's recovery from third parties was not required to be reduced, under the "common fund" doctrine, by an amount attributable to a portion of the fees owed to the insured's attorneys for their work in obtaining a recovery from third parties, this Court stated:
639 So. 2d  at 1359 (citations omitted).
Based on our decision in Powell, we affirm the trial court's ruling as to when Alfa's right to subrogation arises. Accordingly, we affirm the denial of Alfa's motion to intervene.
AFFIRMED.
ALMON, KENNEDY, INGRAM and COOK, JJ., concur.
HOUSTON, J., dissents.
HOUSTON, Justice (dissenting).
I think the majority opinion in this case exacerbates the error made by the plurality opinion in Powell v. Blue Cross &amp; Blue Shield, 581 So. 2d 772 (Ala.1990).
Liability coverage provided for "property damage" is different from liability coverage for personal injury, and it has a limit of liability different from the limit of liability for personal injury.
Rule 17, A.R.Civ.P., in pertinent part, provides:
The majority opinion denies Alfa its right to intervene; that is error.