Court Opinion

ID: 9668187
Source: CourtListenerOpinion
Date Created: 2023-08-24 02:05:03.659231+00
Date Added: 2024-06-11T18:15:43.453207
License: Public Domain

SHIRLEY S. ABRAHAMSON, J.
(concurring). I agree with the majority opinion that the decision of the court of appeals should be affirmed. I write separately *612because I have a somewhat different approach to this case than the majority.
In this case the plaintiffs insurance company paid the plaintiff under his underinsurance coverage (although the company's liability was contingent). According to the majority opinion, the company waived its subrogation rights under the insurance policy and relied on the reimbursement clause in the insurance policy which requires the plaintiff to reimburse the insurance company to the extent of its payment after the plaintiff recovers damages from another. Majority opinion at pp. 589, 596. While some might protest that the majority opinion does not adequately explain how it arrived at these holdings, for purposes of this concurrence I accept the holdings.
Once the majority has held that the company waived subrogation and relied on the reimbursement clause, the issue on review becomes whether under these circumstances the tortfeasor's (and his insurer's) liability on a judgment may be decreased by the amount the plaintiffs insurance company has paid to the plaintiff. I would analyze this issue in the following way.
There are two types of subrogation: contractual and equitable (imposed by law). This case involves contractual subrogation. The insurance policy has an express subrogation clause in the contract that covers this fact situation. Furthermore, the subrogee (the insurance company) has waived its contractual rights to subrogation; the waiver covers this fact situation. The insurance company's waiver of its subrogation rights distinguishes this case from Heifetz v. Johnson, 61 Wis. 2d 111, 211 N.W.2d 834 (1973). and Vogt v. Schroeder, 129 Wis. 2d 3, 383 N.W.2d 876 (1986).
*613An insurance company can waive its right of sub-rogation in favor of the insured. Leonard v. Bottomley, 210 Wis. 411, 417, 245 N.W. 849 (1933). By waiver, the insurance company in this case in effect assigned its claim against the tortfeasor to the plaintiff.
As a result of the waiver (assignment), the plaintiff owns the entire claim and can bring suit against the tortfeasor for the entire claim. Under these circumstances the tortfeasor is not at risk of double, multiple or otherwise inconsistent obligations such as paying once to the plaintiff and once again to the plaintiffs insurer. In this case, the tortfeasor will pay only once — to the plaintiff.
Once an insurance company has waived its right to subrogation, subrogation no longer exists. Anderson v. Garber, 160 Wis. 2d 389, 402, n.5, 466 N.W.2d 221 (Ct. App. 1991) (relying on Radloff v. General Cas. Co., 147 Wis. 2d 14, 18-19, 432 N.W.2d 597 (Ct. App. 1988). If no subrogation exists, the collateral source rule applies, and the plaintiff can recover twice — once from its insurance company and again from the tortfeasor. Rixmann v. Somerset Public Schools, 83 Wis. 2d 571, 580, 266 N.W.2d 326 (1978); Lambert v. Wrensch, 135 Wis. 2d 105, 121, 399 N.W.2d 369 (1987).
Thus, consistent with principles of subrogation and the collateral source rule, a tortfeasor who is legally responsible for the harm should not receive the windfall of being absolved from .liability when the plaintiff paid for the insurance protection and the plaintiffs insurance company waived its subrogation claim in favor of the plaintiff.
I do not think that the doctrine of equitable subro-gation applies when the subrogee (the insurance company) has waived its subrogation rights, as it did in this case. The insurance company is protected as much *614as it wanted to be. The policyholder received just what he bargained for.
Nevertheless the majority goes on to discuss equitable subrogation, asserting that equitable subrogation may be, but need not be, imposed on the basis of the insurance company's payment to the plaintiff regardless of the waiver. Is the majority asserting that courts will examine the waiver of contractual subrogation as contrary to public policy?
Whether to impose an offset on equitable considerations is a question of law for the court. Thus I am somewhat puzzled by the majority's emphasis on burden of proof, a doctrine applicable to proof of facts, not to balancing equities as a matter of law. According to the majority opinion, the only matter to be decided by the court in the procedural morass of this case is the fairness of the offset in the tortfeasor's favor. In other words, who should benefit from the plaintiffs insurance company's waiver of the subrogation rights in this case: The tortfeasor? Or the plaintiff who purchased the policy for self protection, received the "assignment" of the insurance company's rights to subrogation, and agreed to reimburse his company to the extent of its payment when and if he recovered damages from the tortfeasor?
The tortfeasor might argue for an offset on the equitable principle that the plaintiff will be unjustly enriched by a double recovery, once from his insurance company and again from the tortfeasor. The counter equitable argument is that because of the reimbursement clause it is not certain that the plaintiff will recover twice. In the absence of unjust enrichment, the equitable doctrine of subrogation does not apply. Lee v. Threshermen's Mutual Ins., 26 Wis. 2d 361, 265, 132 N.W. 534 (1965). Furthermore, if an offset were *615allowed, the tortfeasor would pay less than the loss he inflicted. Such a result contravenes the principle in equitable subrogation that the loss should be placed ultimately on the wrongdoer. Cunningham v. Metropolitan Life Ins. Co., 121 Wis. 2d 437, 444, 360 N.W.2d 33 (1985); Employers Health Ins. v. General Casualty Co., 161 Wis. 2d 937, 956, 469 N.W.2d 172 (1991).
Assessing these equitable considerations, I reach the same answer I reached when applying the principles of subrogation and the collateral source rule. The tortfeasor does not get an offset. On equitable principles a tortfeasor who is legally responsible for the harm should not receive the windfall of absolution from liability when the plaintiff paid for the insurance protection, the plaintiffs insurance company waived its subrogation claim in favor of the plaintiff, and the plaintiff agreed to reimburse the company when it recovered damages from another.
I am authorized to state that Justice WILLIAM A. Bablitch joins this opinion.