Opinion ID: 878459
Heading Depth: 1
Heading Rank: 2

Heading: The majority failed to distinguish between subrogation and assignment.

Text: The gist of the issue in this case is whether Farmers can bring a direct action against the uninsured motorist and his guarantors. This Court noted in Allstate Insurance Co. v. Reitler, supra, that a subrogation which results in a transfer of the cause of action to the insurer, is in effect an assignment and not subrogation. The distinction should be kept clearly in mind. There is, of course, no reason why Farmers should not be able to recover to the extent it made payment its settlement under the uninsured motorist coverage clause, if that recovery is made by the insureds. Certainly that is what the release which Farmers took from the Hinckleys contemplated. I would agree if the majority held that the subrogation clause on an automobile policy merely asserted a right to reimbursement, contribution or indemnity, but I cannot agree that the insurer became the owner of the cause of action. Idaho, in Rinehart v. Farm Bureau Mutual Insurance Co. (1974), 96 Idaho 115, 524 P.2d 1343, was careful to note that distinction. If Farmers according to its release was simply seeking to recover here to the extent of its payment from any judgments or settlement received in the name of the Hinckleys, I would have no quarrel with its right to such recovery. When it insists on the right to sue directly, in its own name, as a real party in interest, its subrogation becomes an assignment. In Fifield Manor v. Finsten (1960), 54 Cal.2d 632, 7 Cal. Rptr. 377, 354 P.2d 1073, the California Supreme Court was careful to preserve the distinction and to refuse subrogation where no statutory authority for the assignment of the cause of action existed.