Court Opinion

ID: 9691544
Source: CourtListenerOpinion
Date Created: 2023-08-24 20:38:53.562625+00
Date Added: 2024-06-11T18:19:22.388908
License: Public Domain

D ONALD L. CORBIN, Justice, dissenting. I cannot abide by the majority’s conclusion that Appellee Linda Kennedy was not made whole by her settlement with the tortfeasor’s insurer. Moreover, I believe that if she has not been fully compensated for her injuries, she has no one but herself to blame. Accordingly, I must dissent. The facts are undisputed that Appellee was injured in an automobile accident with John Reynolds, who was insured by Nationwide Insurance Company. As a result of her injuries, Appellee incurred around $6,500 in medical bills. Her insurer, Appellant Shelter Mutual Insurance Company, paid $5,000 of Appellee’s medical expenses. Appellee procured the services of an attorney to represent her claim against Reynolds and Nationwide. Against the advice of her attorney, Appellee agreed to settle for the sum of $11,000. Appellee chose to settle knowing full well that the amount she received was less than half of the policy limit. She also knew that out of her settlement, she would have to reimburse Appellant for the $5,000 it paid for her medical bills, pursuant to the subrogation provision of her insurance contract. When Appellant refused to waive its subrogation right, Appellee filed this suit, claiming that she had not been made whole for her injuries. In the first place, I take issue with Appellee’s claim and the trial court’s corresponding finding that she has not been made whole by her settlement. Based on what? As the majority points out, Appellee had a net gain from her settlement of approximately $2,100, after paying medical bills, attorney’s fees, and setting aside Appellant’s subrogation amount. From my review of the record, I am not convinced that this amount is insufficient to fully compensate her. The only evidence presented of possible future damages was Appellee’s own self-serving testimony. She did not present any evidence as to the value of her alleged future damages. It is beyond me how, without such evidence, the trial court could have found that Appellee was not made whole by the settlement. As such, I believe his finding is clearly erroneous. Moreover, if we were to accept her claim that she is still éxperiencing pain from her injuries, I am greatly troubled by the fact that she admitted that she is no longer undergoing physical therapy, that she will not take her prescribed pain medication, and that she refuses to have surgery to relieve her pain. This testimony demonstrates to me that Appellee’s continued pain is due to her refusal to take part in any affirmative treatment. In the second place, I disagree with the majority’s application of Franklin v. Healthsource of Ark., 328 Ark. 163, 942 S.W.2d 837 (1997), in this case. Although the majority acknowledges that the facts in Franklin are distinguishable from those in the present case, it nonetheless proceeds to apply the reasoning and holding of Franklin. I believe this is error. In Franklin, the insured was injured in an automobile accident and incurred approximately $124,000 in medical bills. Additionally, there was testimony demonstrating that his future damages amounted to approximately $400,000. Franklin’s insurer, Health-source, paid in excess of $71,000 of those medical bills. Franklin settled his claim against the tortfeasor and the tortfeasor’s insurance carrier for $25,000, the full amount of the liability policy. Thereafiter, Healthsource sought the full amount of the settlement as subrogation. This court held, and rightly so, that Franklin’s right of subrogation took precedent over that of Healthsource because he had not been made whole, even after he received the full value of the liability policy. The decision in Franklin was based on equitable principles. In the present case, Appellee was fully aware that she was settling her claim for less than the policy amount available. Indeed, her decision to settle was made against the advice of her attorney and with the full knowledge that she would have to reimburse Appellant, pursuant to the subrogation clause of her insurance contract. Had she received the full amount of Reynolds’s policy and still not been made whole, under Franklin, Appellant would not be entitled to enforce its subrogation contract. Because she chose to setde for less than the full amount of the policy, and, apparently, less than the full amount of her damages, her equitable claim of subrogation is not superior to Appellant’s, and Franklin is not controlling. For these reasons, I respectfully dissent. Hannah, J., joins in this dissent.