Opinion ID: 2387360
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Heading Rank: 3

Heading: Subrogation Against Jim Bottin

Text: Hartford Insurance filed a third-party complaint against Jim Bottin, asserting its right to subrogation and reimbursement for underinsurance benefits paid resulting from the accident. The insurance company had paid Mullinax $7,280 in wage-loss benefits and $25,000 in substitution for insurance proceeds tendered on behalf of White. The trial court granted summary judgment in favor of Jim Bottin because it found that the underinsured motorist statute (§ 23-89-209) only provides for subrogation against the owner or operator of an underinsured motor vehicle. Jim Bottin contends that Hartford Insurance's subrogation rights are limited to those contained in the underinsured motorist statute, which by its plain language defeats Hartford Insurance's subrogation rights because Jim Bottin was neither an owner nor an operator of White's car. Jim Bottin also argues that the claim is barred by the statute of limitations and that the dismissal with prejudice granted in favor of White likewise releases Jim Bottin from any liability imputed to it. Because of the plain language of § 23-89-209, the question then becomes whether Hartford Insurance has common-law subrogation rights to go against Jim Bottin by virtue of its insurance policy with Mullinax or whether this statute displaces them. Although the General Assembly has the power to alter the common law, see White v. City of Newport, 326 Ark. 667, 933 S.W.2d 800 (1996), a legislative act will not be construed as overruling a principle of common law unless it is made plain by the act that such a change in the established law is intended. White v. State, 290 Ark. 130, 136, 717 S.W.2d 784, 787 (1986) (quoting Starkey Constr., Inc. v. Elcon, Inc., 248 Ark. 958, 457 S.W.2d 509 (1970)). Moreover, we strictly construe statutes in derogation of the common law. See Holt Bonding Co. v. State, 328 Ark. 178, 942 S.W.2d 834 (1997). Here, the statute is not so explicit in its language that all subrogation rights under the insurance policy are voided, or that the vicarious liability of employers is removed. The trial court erred in its decision that the statute voided all common-law rights. Nevertheless, we hold that the trial court correctly granted summary judgment to Jim Bottin, albeit for the wrong reason. See Dunn v. Westbrook, 334 Ark. 83, 971 S.W.2d 252 (1998). On February 17, 1997, White was voluntarily dismissed from the litigation pursuant to a motion by Mullinax. This was a second dismissal, and it operated as an adjudication on the merits. See Ark. R. Civ. P. 41(a). Imputed or vicarious liability is tied to the negligence of the employee. When the employee has been released or dismissed and the employer has been sued solely on a theory of vicarious liability, any liability of the employer likewise is eliminated. See Barnett v. Isabell, 282 Ark. 88, 666 S.W.2d 393 (1984); Davis v. Perryman, 225 Ark. 963, 286 S.W.2d 844 (1956). See also 27 AM. JUR.2d, Employment Relationship, §§ 469-70 (1996). Because Hartford Insurance stands in the shoes of Mullinax, its claim is no greater than that of its insured. See Union Nat'l Bank of Little Rock v. Hooper, 295 Ark. 83, 746 S.W.2d 550 (1988); Page v. Scott, 263 Ark. 684, 567 S.W.2d 101 (1978). We conclude that any potential subrogation claim against Jim Bottin by Hartford Insurance ended when White was dismissed from the litigation with prejudice. We affirm the trial court on this point, but for a different reason. Because we reverse and remand on the breach-of-contract claim, we need not address the issue of penalty, attorney's fees, and prejudgment interest. Affirmed in part. Reversed in part and remanded.