Court Opinion

ID: 9534493
Source: CourtListenerOpinion
Date Created: 2023-08-07 04:40:20.175351+00
Date Added: 2024-06-11T13:30:53.911699
License: Public Domain

Collins, D. J.,
dissenting:
I dissent.
My learned brethren, speaking for the majority of the *367Court, state the issue in this case to be “* * * whether an equitable lien may validly attach to an assignment of the proceeds of a personal injury settlement * * *” I believe there is an antecedent issue which must be disposed of first which will be determinative of the case, at least until a retrial is had.
The trial of this matter before the district court was upon an agreed statement of fact. Those facts are substantially set forth in the majority opinion and need not be repeated here, with two exceptions. The policy of insurance between the Hanleys and their insurer, State Farm Mutual Automobile Insurance Company, contained the following clauses:
“Subrogation. Under payment under this policy, except under Coverage ‘C,’ the company shall be subrogated to all the insured’s rights of recovery therefor and the insured shall do whatever is necessary to secure such rights and do nothing to prejudice them.
“Upon payment under Coverage ‘C’ of this policy, the company shall be subrogated to the extent of such payment to the proceeds of any settlement or judgment that may result from the exercise of any rights of recovery which the insured person or anyone receiving such payment may have against any person or organization and such person shall execute and deliver instruments and papers and do whatever else is necessary to secure such rights. Such person shall do nothing after loss to prejudice such rights.”1
Second, appellants Davenport, through their insurer, Allstate Insurance Company, paid to respondents Hanley, Eight Thousand Dollars ($8,000.00) and took a general release from them. A copy of the release was in evidence before the trial court and in substance released the Davenports from any and all claims, demand, damages, costs, expenses, loss of services or causes of action arising from any act or occurrence on account of any personal injury, disability, or damage of any kind that they may sustain as a result of the accident on November 21, 1961.
*368“An equitable lien must be based on established principle of equity * * * the doctrine of equitable lien is npt a limitless remedy to be applied according to the measure of the conscience of the particular chancellor, and does not contemplate expediency as distinguished from legal rights.” (53 C.J.S., Liens § 4(a), at 837 and 838)
“Ordinarily, damages may not be awarded by the chancery court. It is the function of the law courts to award damages for breach of contract or for tort; and if the purpose of the proceeding is merely the recovery of a sum of money, there can be no reason for resorting to equity, since the remedy at law is complete.” (19 Am.Jur., Equity § 119, 120 and 121)
“Indeed, it is said that the absence of a plain and adequate remedy at law is the only test of equity jurisdiction.” (19 Am.Jur., Equity § 100, at 107)
What then do we have in this case? Clearly, State Farm has a cause of action at law against their own insured, the Hanleys, to recover the amount paid them for medical expenses incurred as a result of the accident. Their contract of insurance provides that the insured “shall do nothing after loss to prejudice such rights.” Hanleys did exactly what they promised and contracted not to do. They executed a release to the Davenports in apparent total disregard of their obligation to their own insurer, thereby precipitating this litigation.
I do not feel that the trial court, nor this court should open its doors to the respondent, State Farm, under these circumstances. It appears to me to- be encouraging contracting parties to breach their agreement, and in fact reward them for an apparent breach, if this appeal is entertained. Especially is this so when equitable relief by way of lien is sought not based on or arising out of any contract between appellants, the Davenports, and respondents, State Farm Insurance Company.
To be entitled to equity, a litigant must be willing to do equity. And it appears most equitable to me to remand this action to the trial court for a new trial, requiring State Farm to seek relief at law first against the Hanleys under their contract, before considering equitable *369remedies. This Court has that power under NRCP 72 (a) whether a new trial is sought or not.
I would remand for a new trial.

Coverage “C” of the policy included sums paid for medical expense.