Court Opinion

ID: 9668672
Source: CourtListenerOpinion
Date Created: 2023-08-24 02:21:38.400029+00
Date Added: 2024-06-11T18:15:46.986096
License: Public Domain

SMITH, Justice,
dissenting.
I respectfully dissent. Pan American’s contention that the payment by Hi-Plains to Harris, and the receipt by Harris of the sum of $1750.00 in settlement of his claim for damages, all with the knowledge of Pan American’s right of subrogation, rendered Hi-Plains liable as a matter of law to Pan American for the sum of $1750.00 has, in effect, been sustained by the Court. The Court holds that Pan American was entitled to collect the $1750.00. This part of the holding is correct. When Hi-Plains paid and Harris received $1750.00 in settlement of his claim for damages with full knowledge of Pan American’s rights of subrogation, Hi-Plains and Harris became liable to Pan American jointly and severally to the extent of an equal sum of $1750.00. The money paid over to Harris by Hi-Plains, actually, in law, belonged to Pan American. Therefore, the trial court erred in *7granting Hi-Plains’ motion to require an election of remedies, and in ordering Pan American to elect in writing whether it would accept the “sum of $1750.00 by way of full compromise and settlement of its entire interest in the cause of action * * * or whether * * * Pan American Insurance Company desires to determine the liability, if any, of * * * Hi-Plains * * * to * * * Harris, to the extent of the interest of Pan American Insurance Company therein under the terms of Sec. 6a, of Art. 8807, RCST.”
The holding of the Court that Pan American is not entitled to recover the sum of $1500.00, awarded by the jury, in addition to the sum of $1750.00 is out of harmony with the stipulated facts, the release agreement executed by Hi-Plains and Harris, and the law as declared by the Supreme Court of Texas.
I cannot agree with the Court that the amount of the damages awarded by the jury and the trial court must be equal to or in excess of the compensation paid by Pan American to Harris before Pan American would be entitled to collect from Hi-Plains in full. This is the sole reason given by the Court for not awarding judgment in favor of Pan American for the $1500.00 in addition to the sum of $1750.00.
The stipulated facts and the release agreement refute this holding. It was stipulated that as the result of the injury received by Harris, the Pan American Insurance Company was caused to expend the sum of $3500.00 as compensation to Harris, and the sum of $480.85 for medical and hospital expenses, a total of $3980.85; that the settlement between Harris and Hi-Plains was made without the consent, participation, knowledge, approval or acquiescence of Pan American, and with full knowledge on the part of Hi-Plains of Pan American’s right of subrogation. That they had such knowledge and well knew that in the event Pan American established that the injury sustained by Harris was proximately caused by the negligence of Hi-Plains, Pan American would be entitled to judgment against Hi-Plains for whatever sum in damages should be awarded by the trial court, whether such sum should be more or less than $3980.85, is conclusively shown by the settlement agreement executed by Harris and Hi-Plains. The settlement agreement was introduced in evidence as a part of the stipulated facts. The portion of the written agreement pertinent here, reads as follows:
“It is understood and contemplated by the parties that Pari American Insurance Company, intervenor, * * * has paid to said Albert W. Harris workmen’s compensation and medical *8expenses [$3980.85] * * *; and there is expressly excepted from the terms of this compromise and settlement and reserved to said Pan American Insurance Company its interest in said cause of action of Albert W. Harris by virtue and to the extent of the workmen’s compensation payments and medical expenses made by said Pan American Insurance Company heretofore, to or on behalf of said Albert W. Harris as a result of said accident and injuries of Albert W. Harris sustained therein. But it is expressly understood and agreed that except for and only to the extent of the interest of said Pan American Insurance Company in said claim and cause of action, this compromise and settlement is in full and complete discharge of the entire remaining interest of the said Albert W. Harris in and to said claim and cause of action against the parties to this compromise and settlement agreement; and that said payment of $1,750.00 is made by The Travelers Insurance Company to and for the sole use and benefit of the said Albert W. Harris individually and compromise and settlement, release and discharge of the cause of action asserted by him in the above entitled and numbered cause, excepted only to the extent of such interest therein as has accrued to said Pan American Insurance Company under Article 8307, Section 6a, RCST. It is also specially understood and agreed that this compromise and settlement agreement is intended only for the benefit of Albert W. Harris, Hi-Plains Haulers, Inc., Levi C. Holt and The Travelers Insurance Company, and is the compromise and settlement and release and discharge of a doubtful and disputed claim, liability for which is denied by said Hi-Plains Haulers, Inc., Levi C. Holt and The Travelers Insurance Company as shown by their answer filed in the above entitled and numbered cause and the nature and extent of the injuries alleged by the plaintiff being disputed; and that the payment herewith made and the terms of this settlement is in no event to be construed or constitute any admission of liability by Hi-Plains Haulers, Inc., Levi C. Holt and/or The Travelers Insurance Company to said Pan American Insurance Company, its successors or assigns.”
Then again near the closing paragraph of the agreement, the parties agree that Harris shall be forever barred from asserting any claim or cause of action against “the remaining parties hereto, * * * excepting from this compromise and settlement, release and discharge, only the interest of said Pan American Insurance Company in and to said claim and cause of action as to the extent asserted by it in its First Amended Original Answer on file in this cause.”
*9The claim asserted by Pan American was for a recovery of damages. Pan American adopted the pleadings of Harris and those pleadings prayed for a recovery of damages in the sum of $47,-500.00, plus medical and hospital bills. Nothing contained in the agreement placed a limitation on Pan American’s recovery. Therefore, the “extent” of Pan American’s claim would naturally be only limited by the amount paid by Pan American to Harris in settlement of Harris’ claim for workmen’s compensation in the event the jury award in damages exceeded such payment. The jury verdict was for only $1500.00. By the very terms of the settlement agreement, Hi-Plains and Harris admitted that Pan American would be entitled to the sum in damages which might be awarded by the court’s judgment based upon the verdict of the jury, the trier of the facts in this instance.
Since the money paid by Hi-Plains to Harris in settlement was less than the amount of compensation paid by Pan American to Harris, Pan American was entitled to receive from Hi-Plains and Harris the amount of $1750.00 paid to Harris, and in addition thereto it was entitled for its benefit, but in the name of Harris, to assert the original claim and cause of action by Harris against Hi-Plains in order to make itself whole. Hi-Plains recognized this right. In fact, Hi-Plains filed a motion in the trial court that judgment for Pan American be limited to $1500.00, the exact amount awarded by the jury. Pan American was clearly entitled to this additional recoupment.
Pan American’s subrogation rights were not only stipulated and agreed upon by Hi-Plains and Harris, but were definitely fixed by Section 6a of Article 8307, Vernon’s Annotated Civil Statutes of Texas. This statute does not provide for separate causes of action. Under the statute, there is but one cause of action against the third-party tort feasor. See Texas Employers’ Ins. Ass’n v. Texas & P. Ry. Co. et al., Texas Civ. App., 129 S.W. 2d 746, wr. dism. judg. cor.
Pan American was not compelled by statute or otherwise to accept the tendered payment of $1750.00 in full and final settlement of all of its subrogation rights. The money paid over to Harris by Hi-Plains, actually, in law, belonged to Pan American. It had the right under the statute to be reimbursed out of the first monies paid to or recovered by Harris. See Traders & General Insurance Company v. West Texas Utilities Company, 140 Texas 57, 165 S.W. 2d 713; and Fort Worth Lloyds v. Haygood, 151 Texas 149, 246 S.W. 2d 865.
There is no distinction, in principle, between the present case *10and the two cases last cited. In the present case, Pan American was required to proceed with the Harris cause of action against ■Hi-PIains if it expected additional recoupment. It did just that and in the trial judicially established that acts of negligence charged against Hi-PIains were the proximate cause of the injuries sustained by Harris. The answers of the jury to the issues inquiring as to the contributory negligence of Harris were all favorable to Harris. The jury also found that the collision in question was not the result of an unavoidable accident.
The fact that the jury verdict and judgment of the trial court was for $1500.00, a sum less than the amount of money paid to Harris, does not mean that Pan American is to be denied a recovery of the jury award. Pan American is entitled to a recovery of the $1500.00 awarded by the judgment of the trial court, in addition to a recovery of $1750.00, the amount of the settlement payment by Hi-PIains to Harris. Both sums are to be considered as money paid over to the employee within the meaning of Sec-lion 6a of Article 8307, supra. This conclusion is inescapable in the light of the holding of this Court in the cases of Traders & General v. West Texas Utilities, supra, and Fort Worth Lloyds v. Haygood, supra. This Court said in Traders & General, supra:
“* * * It is pointed out in Fidelity Union Casualty Company et al v. Texas Power & Light Company, Texas Civ. App., 35 S.W. 2d 782, 783, writ refused, that such ‘right of subrogation has existence only in the terms of this statute [Sec. 6a] and it can be enforced only as therein directed.’ It is also stated in the opinion that ‘the amount to be recovered’ against the third person tort feasor is ‘to be appropriated between the parties as directed by the statute’, that is that the association first recoup itself out of the amount recovered, and that the excess only be paid to the injured employee. The money paid over to the employee therefore belonged, under the law, to Traders & General and both the company and the employee were charged with knowledge of that fact and had actual knowledge that Traders & General was asserting its subrogation rights in the cause at the time the settlement was made. The right of the association to reimbursement out of the first money paid is statutory; and in event the employee is permitted, without the consent of the association, to settle his claim against the alleged third person tort feasor, thus eliminating his further interest in the suit, the provision of the statute authorizing the insurance association to enforce for the joint use and benefit of said employee and the association the liability of such toft feasor, is theréby nullified. * * * The money belonging to *11Traders & General was wrongfully paid by the utilities company to the employee, who wrongfully received it, and both were thereby rendered liable to pay to Traders & General the amount of compensation theretofore paid by it to the employee, together with the costs of enforcement, including a reasonable attorney’s fee therefor.” [Emphasis added.]
To fail to apply here the principle announced in Traders & General, supra, would be in contravention of the legislative purpose in enacting Sec. 6a, supra.
In the case of Fort Worth Lloyds v. Haygood, supra, this Court cited with approval several cases, including Traders & General, supra; Houston Gas & Fuel Co. v. Perry, 127 Texas 102, 79 S.W. 2d 623, 91 S.W. 2d 1052; Hanson v. Ponder, Texas Comm. App., 300 S.W. 35; and Galveston-Houston Electric Ry. Co. et al v. Reinle et al, Texas Civ. App., 264 S.W. 783, wr. ref. The Court then went on to hold: “[T]he fundamental principle underlying the * * * cases cited above is that where compensation has been paid to an injured employee, or his representatives, and they later file suit against the third party tort feasor, the first money paid or recovered by the employee, or his representatives, belongs to the compensation carrier paying the compensation, and until it is paid in full, the employee, or his representatives, have no rights to any funds * * [Emphasis added.]
The judgment of the Court of Civil Appeals should be reversed and judgment should be rendered for Pan American against Hi-Plains for the sum of $3250.00.
Chief Justice Calvert and Associate Justices Griffin and Hamilton join in this dissent.
Opinion delivered October 18, 1961.