Court Opinion

ID: 5633945
Source: CourtListenerOpinion
Date Created: 2022-01-11 05:37:01.289682+00
Date Added: 2024-06-11T08:37:55.357853
License: Public Domain

Deen, Judge,
dissenting. This question has already been settled by this court in Pharo v. Travelers Ins. Co., 119 Ga. App. 344 (3) (167 SE2d 226), wherein it was held: "Since the loan receipt from Pharo to State Farm Mutual referred only to 'net recovery’ and specified that Pharo should prosecute his action against the tortfeasor 'at the expense [and under the exclusive direction and control] of said insurance company,’ the deduction of the proportionate expenses for attorney fees incurred by the plaintiffs which resulted in the final settlement were *618properly borne by State Farm Mutual.” "Net recovery” means recovery after expenses. Cf. "net” and "net balance,” Black’s Law Dictionary. The plaintiffs net recovery was the amount he actually received after deduction of the expenses of litigation including the one-third contingent fee, as was held in Commercial Union Ins. Co. v. Scott, 116 Ga. App. 633 (158 SE2d 295). Comparison of the loan receipts here and in Pharo shows that Judge Evans is right in assuming that the name of the person to bear the expenses of litigation and control the litigation for recovery of the collision insurance from the third party tortfeasor was simply not filled in, and the loan receipt does not mean that Bergen assumed all expenses of litigation to obtain it.
As a matter of fact, there is no way that the insurer could by loan receipt have compelled Bergen to pay the pro rata share of attorney fees on the collision insurance due the insurer in any event. The insurer had paid Bergen the amount of loss and was entitled to recover it from the tortfeasor as a matter of law under general principles of subrogation. Universal Credit Co. v. Service Fire Ins. Co., 69 Ga. App. 357 (25 SE2d 526). And it would of course have had to pay counsel for doing so. Its insurance contract with Bergen was simply to "pay for loss caused by collision to the owned automobile or to a non-owned automobile but only to the amount of each such loss in excess of the deductible amount stated in the declarations.” Therefore, although it had a right to demand an assignment of the chose in action if it needed to have it for procedural purposes, it had no right to demand that the insured stand the expense of the insurer’s collecting the subrogated amount. Any such condition placed in the loan receipt which the company requested in lieu of a general assignment of the chose in action would have been without consideration, nudum pactum and unenforceable. The expenses of collecting the sum back from the tortfeasor in either legal or *619conventional subrogation would have been the concern of the insurer alone. The insured had paid for, was entitled to, and received the collision insurance, all the collision coverage less the deductible, which belonged to the insured when the insured paid his premium for collision insurance.
The majority opinion is misapplying the two cases primarily relied upon. In First of Ga. Ins. Co. v. Horne, 120 Ga. App. 379 (170 SE2d 452) the attorney for the insured attempted to sue the insurer directly, and of course he could not do so because he had no contract with the insurance company. His contract was with the insured and he should have collected his fee from the insured. The loan receipt between insured and the insurance company, which tracked the law (i.e. that the insured could not twice recover for collision insurance, and that the insurer was entitled to have its share of the "net recovery” returned) was a matter between them, into which the attorney had no right to personally inject himself.
As for Commercial Union Ins. Co. v. Scott, 116 Ga. App. 633, supra, it deals with, and cites as its sole authority a textbook on, workmen’s compensation, and decides the priority of liens of employers under the workmen’s compensation law, our Georgia statute, Code Ann. § 114-403. This involves only one subject matter — compensation for bodily injury. Our present case involves two separate subject matters — property damage for which the insured has been already fully compensated, and bodily injury for which he has received no compensation. The Scott case, however, on page 636 points out, as we have here, that "net recovery means that attorney’s fees and expenses are deducted in priority to” the sum to which the subrogee is entitled. (Emphasis supplied.)
The judgment should be reversed.
I am authorized to state that Judge Pannell concurs in *620this dissent and Presiding Judge Hall concurs in the result of this dissent.