Court Opinion

ID: 5162032
Source: CourtListenerOpinion
Date Created: 2022-01-02 02:56:10.395163+00
Date Added: 2024-06-11T08:25:39.555386
License: Public Domain

THOMAS, Justice,
dissenting.
I experience a two-fold disappointment in the opinion of the court in this case. First, I am disappointed by the necessity to assume that Allied Fidelity Insurance Company (Allied) is a subrogee, when the facts are contrary. Secondly, I am disappointed by the attempt of the majority to apply the law of subrogation to these facts. This creative jurisprudence might be understandable if there were some valid goal accomplished. I see none.
The majority quite correctly recognizes that the doctrine of legal subrogation is being expanded. It is expanded in much the same way that the vintage aircraft was expanded into the moonlander. The majority cites Commercial Union Insurance Company v. Postin, Wyo., 610 P.2d 984 (1980), in defining subrogation. That case is entirely consistent with the general rule that one becomes subrogated under the doctrine of legal or equitable subrogation upon the payment of the debt by the subro-gee for the principal. See, e.g., Martin v. National Surety Corporation, 437 Pa. 159, 262 A.2d 672 (1970); Walker Process Equipment Company, Inc. v. Cooley Building Corporation, 129 Vt. 333, 278 A.2d 714 (1971); 83 C.J.S. Subrogation § 57 at 694 (1953), and cases cited therein; 73 Am.Jur.2d Subrogation § 54 at 632 (1974), and cases cited therein. There is nothing in this record to indicate that Allied paid anything upon the obligation for which it served as surety, and, in the absence of payment, there was no subrogation.
The majority quotes the definition of sub-rogation from Black’s Law Dictionary only in part, and a subsequent portion of that definition is consistent with the requirement of payment of the obligation. The definition goes on to say:
“ * * * The lawful substitution of a third party in place of a party having a claim against another party. Insurance companies, guarantors and bonding companies generally have the right to step into the shoes of the party whom they compensate and sue any party whom the compensated party could have sued.
“The right of one who has paid an obligation which another should have paid to be indemnified by the other. Olin Corp. (Plastics Division) v. Workmen’s Compensation Appeal Bd., 14 Pa.Cmwlth. 603, 324 A.2d 813, 816.” Black’s Law Dictionary 1279 (5th ed. 1969).
The only authority cited in justification of the extension of subrogation to a right to a hearing in this instance is People’s Bank v. Loven, 172 N.C. 666, 90 S.E. 948 (1916). Properly analyzed, People’s Bank v. Loven, supra, only holds that one who is sued as a surety (the endorser of a promissory note) fits within the language of a statute which provided:
ut* * * pjn any actjon brought in any court of competent jurisdiction to recover upon any such note or other evidence of debt, it shall be lawful for the party against whom the action is brought to plead as a counterclaim the penalty above provided for, to wit, twice the amount of interest paid as aforesaid, and also the forfeiture of the entire interest.’ ” People’s Bank v. Loven, supra, 90 S.E.2d at 949.
The case simply holds then that the surety, by invoking the statute, demonstrated that the claim against the principal had been discharged. The case has nothing to do with the claim by Allied to a right to a hearing under the Wyoming statute.
I would have no quarrel with a conclusion that Allied, if sued by the State of *1043Wyoming, could invoke any defenses available to Ogle Petroleum, Inc. (Ogle). That is standard surety law. The majority, however, applies the law of subrogation backward. Once Allied pays the claim of the State of Wyoming, it will be subrogated to the extent of its payment to the right of the State to recover from Ogle. Having available a defense if sued, however, and being afforded an affirmative right by virtue of a subrogation theory is a clear mixture of apples and oranges. The latter right could be acquired by Allied upon an assignment of the permit, but nothing indicates that the right to a hearing was so important to Allied that it wanted to assume Ogle’s other obligations under the permit.
The majority expresses concern with respect to the function of § 35-11-421, W.S. 1977. That statute authorizes the director of the Environmental Quality Council to request the attorney general to begin bond forfeiture proceedings. It then provides that he shall institute proceedings to forfeit the bond by “providing written notice to the surety and to the operator that the bond will be forfeited unless the operator makes written demand to the council within thirty (30) days after his receipt of notice, requesting a hearing before the Council.” The statute obviously does not afford a right of hearing to the surety, but the majority is concerned about the potential of collateral estoppel. Correctly construed, that statute does nothing more than provide for the initiation of a claim by the State of Wyoming, which is not much different from the usual requirement of a declaration of a forfeiture when the obligations of a purchaser under a contract for deed have not been met. The Environmental Quality Council would not have any greater authority to adjudicate its claim of forfeiture than the State Highway Commission. Brasel & Sims Construction Company, Inc. v. State Highway Commission of Wyoming, Wyo., 655 P.2d 265 (1982). Consequently, there would be no effect of res judicata or collateral estoppel attaching to the administrative proceeding which really is nothing more than an invitation to the permittee to explain to the Environmental Quality Council why the forfeiture of the bond should not be pursued. I note that a subsequent provision in the statute provides for an action to recover the cost of the reclamation. While the tenor of the bond may not afford much in the way of a defense if the operator has not performed its obligations under its permit, it does not appear to me that the statute is self-executing.
Consequently, there is no particular goal to be accomplished by insisting that the surety company have a right to a hearing under this statute when the statute does not so provide. Even after the hearing, there is no requirement that the surety pay over the amount of the bond, and, in every instance, litigation still would be a potential event.
The rule to be distilled from this majority opinion is that Allied is entitled to be subro-gated to the right of Ogle to a hearing to attempt to justify no action to initiate the claim against Ogle, even though Allied must pay the claim on behalf of Ogle before it can be subrogated to the claim of the State against Ogle. I have to confess that the logic of this rule as a legal proposition escapes me. Its necessity is even more remote from my ken.
I dissent and would affirm the administrative agency in this instance.