Court Opinion

ID: 9731123
Source: CourtListenerOpinion
Date Created: 2023-08-26 15:34:32.906527+00
Date Added: 2024-06-11T18:26:13.530851
License: Public Domain

Boslaugh, J.,
dissenting in part.
This case amounts to a logical extension of a legal fiction which results in an absurdity. What was originally intended as a shield for the collision insurer has become a sword.
The settlement between the plaintiffs Schmidt and their insurer, State Farm Mutual Automobile Insurance Company, was obviously a payment of the amount due Schmidts by reason of the terms of the contract of insurance. The parties cast it in the form of a “loan,” but that was merely a fiction which has been indulged in as a means to avoid consequences normally attendant upon payment of a loss. Undoubtedly, it serves a useful purpose where the circumstances would' otherwise prevent any settlement under the policy. See Kopperud v. Chick, 27 Wis. 2d 591, 135 N. W. 2d 335,
Upon payment of the indemnity, the insurer became entitled to subrogation, either by contract or in equity, for- the amount paid. Krause v. State Farm Mut. Auto. Ins. Co., 184 Neb. 588, 169 N. W. 2d 601. Schmidts had but one cause of action, but the insurer then had an interest in it by - reason, of the payment under the *412policy. Only one action could be brought to recover all the damages resulting from the accident.
The settlement between Schmidts and the defendant Henke’s insurer was but a partial settlement. The rights of State Farm in Schmidts’ cause of action against Henke were expressly excepted from the release. As stated in Omaha & R. V. Ry. Co. v. Granite State Fire Ins. Co., 53 Neb. 514, 73 N. W. 950: “Knowing, as it then knew, of the rights of the insurance company, it is not protected, by that voluntary payment of Erickson’s claim, against a valid claim of the insurance company not included in that settlement.”
The only issue in this case was whether the action could be brought in the name of Schmidts or had to be brought in the name of State Farm. Since Schmidts had no interest remaining in the cause of action against Henke, Schmidts were no longer a real party in interest. Although I concur in this holding, it appears to conflict with Bozell & Jacobs, Inc. v. Blackstone Terminal Garage, Inc., 162 Neb. 47, 75 N. W. 2d 366.
I would remand the cause for further proceedings.