Opinion ID: 1058040
Heading Depth: 3
Heading Rank: 2

Heading: Payments made under the liability coverage provision

Text: State Farm claims that it is entitled to equitable subrogation with respect to the $100,000 that it paid to the plaintiff under the liability provision of the policy. The nursing home responds that the driver of the automobile was immune from liability as a co-employee, and therefore, equitable subrogation should not apply as State Farm was not obligated to pay anything to the plaintiff. The nursing home again argues that it should receive a credit under Tennessee Code Annotated section 50-6-112 for the amount paid to the plaintiff by State Farm so the plaintiff does not receive double recovery. `Subrogation is a right which is founded upon equity and justice and accrues when one person for the protection of his own interests, pays a debt for which another is primarily liable.' Wimberly v. Am. Cas. Co. of Reading, Pa. (CNA), 584 S.W.2d 200, 203 (Tenn.1979) (quoting Amos v. Central Coal Co., 38 Tenn.App. 626, 277 S.W.2d 457, 462 (1954)). With respect to insurance, subrogation allows the insurer to `stand in the shoes' of the insured and assert the rights of the insured against a third party. York v. Sevier County Ambulance Auth., 8 S.W.3d 616, 618-19 (Tenn.1999) (citing Wimberly v. Am. Cas. Co., 584 S.W.2d 200, 203 (Tenn. 1979)). However, in the absence of legal compulsion to pay the debt of another, voluntary payment of another's debt, absent fraud, accident, mistake, or by contract with the payee, does not entitle one to subrogation. Walker v. Walker, 138 Tenn. 679, 200 S.W. 825 (1918). A mere volunteer, intermeddler, or stranger, or one acting officiously in paying the debt of another, is not entitled to subrogation ... where he pays without an assignment of the debt or an agreement for subrogation. A volunteer or stranger within this rule is one who has no obligation or liability to pay the debt and has no interest in the property affected by the debt. Some compulsion to pay, such as legal process, is ordinarily essential and sufficient to support subrogation. Goodfriend v. United Am. Bank, 637 S.W.2d 870, 870 (Tenn.Ct.App.1982) (quoting 83 C.J.S., Subrogation, § 9). State Farm was under no obligation to pay the plaintiff under the liability provision of the policy held by Scarlet Caton because Scarlet Caton was immune from suit as a co-employee of the plaintiff. See Taylor v. Linville, 656 S.W.2d 368, 370 (Tenn.1983) (holding that an employee can not hold a fellow employee liable where, at the time of the accident, both parties were acting within the scope and course of their employment). State Farm chose to settle a claim of questionable validity in an effort to protect its insured from liability above the policy limits. State Farm was in no way compelled to pay its policy limits by any judicial decision or any other legally enforceable means. Nor was it bound by any contractual duty with the plaintiff to pay her the money under the policy. State Farm does not allege any act of fraud, mistake or accident which induced its payment to the plaintiff. Therefore, State Farm's payment to the plaintiff was voluntary and does not entitle State Farm to subrogation.