Court Opinion

ID: 7825265
Source: CourtListenerOpinion
Date Created: 2022-09-07 18:05:24.931139+00
Date Added: 2024-06-11T16:30:50.847598
License: Public Domain

Robert L. Brown, Justice, concurring. I agree with the majority opinion but write only to clarify my position on subrogation rights in this case when double recovery for the same risk is the issue. We have recently had a spate of subrogation cases where the issue presented was whether the injured party was entitled to be made whole by his insurance carrier and the insurance carrier of any third-party tortfeasor for all property and personal injury damages incurred before subrogation rights would be effective, or, alternatively, whether the injured party’s carrier would be subrogated to benefits paid by a third-party carrier irrespective of whether the injured party had been fully compensated. The right of an injured party to be made whole and an insurance carrier’s right to subrogation are both equitable principles. Couch on Insurance 2d, § 61.20, p. 96 (1981). Subrogation rights, however, may also be delineated by contract, but contract rights will not be enforced when this works an injustice. Id at 97; see also Shelter Mutual Ins. Co. v. Bough, 310 Ark. 21, 834 S.W.2d 637 (1992); Hill v. State Farm Mutual Automobile Ins. Co., 765 P.2d 864 (Utah 1988). Conflicts occur where the injured party’s carrier covers for a specific risk such as property damage and pays a claim in full on that risk. The carrier’s policy includes a subrogation clause in the contract relative to all payments recovered by the insured. In the event that the injured party receives benefits from the tortfeasor’s carrier for the same risk compensated, that is, property damage for which the insured has been fully compensated, subrogation should be allowed. However, if the contract between the injured party and the carrier provides that the carrier is subrogated to any and all other benefits received by the injured party, including benefits for risks not covered by the injured party’s carrier, I question whether that carrier should be subrogated to those benefits. For example, a carrier paying the injured party for property damage should not be subrogated to benefits paid by the tortfeasor’s liability carrier for bodily injury, regardless of the subrogation language in the property carrier’s policy. To allow subrogation in that event would, in my judgment, be contrary to public policy. Absent clear evidence of double recovery for the same risk, the injured party has a right to be made whole by insurance benefits received from other sources including benefits received from the tortfeasor’s carrier. In the case before us, the insured was made whole by Great American for physical damage to the truck. The facts, however, are not clear that double recovery for the same risk has occurred in the sense that it is impossible to discern from the record whether the tortfeasor’s carrier, Farmers, paid $10,000 for physical property damage under its policy, as did Great American, or whether the benefits paid embraced other elements of damage arising out of the property damage such as lost income. Great American should not be subrogated to benefits paid to compensate for some other risk than that covered by Great American for the public policy reasons already addressed. However, had it been clear that Farmers was paying solely for property damage, causing a duplication of benefits for this risk, subrogation rights in Great American would prevail. Because it is unclear that double recovery for property damage has occurred, I agree with the majority opinion and would reverse the judgment.