Court Opinion

ID: 9772004
Source: CourtListenerOpinion
Date Created: 2023-08-29 17:04:45.691539+00
Date Added: 2024-06-11T07:31:41.199761
License: Public Domain

DUNCAN, Justice,
dissenting.
Because I believe that State Farm, as sub-rogee, succeeded to all the rights and remedies of its subrogors — including their consumer status under the Texas Deceptive Trade Practices Act — and because I believe public policy not only does not preclude but weighs in favor of such an assignment, I respectfully dissent.
By paying the Trimbles’ loss, State Farm became a pro tanto owner of the Trimbles’ causes of action against Itz and Hall Construction. See Thoreson v. Thompson, 431 S.W.2d 841, 347 (Tex.1968). No formal assignment of the claims was necessary, because the insurer’s payment operates as an equitable transfer of the claims. See id; see also International Ins. Co. v. Medical-Professional Bldg., 405 S.W.2d 867, 869 (Tex.Civ. App. — Corpus Christi 1966, writ ref d n.r.e.). When claims are thus assigned, the subrogee may bring suit either in its own name or in the name of its subrogor. See Texas Mach. & Equip. Co. v. Gordon Knox Oil & Expl. Co., 442 S.W.2d 315, 317 (Tex.1969).
The DTPA cause of action asserted by State Farm in this case is thus that of the Trimbles. Accordingly, as subrogee, State Farm stands in the Trimbles’ shoes, and the extent of its remedies and the measure of its rights are controlled by those possessed by the Trimbles. See Guillot v. Hix, 838 S.W.2d 230, 232 (Tex.1992); Interstate Fire Ins. Co. v. First Tape, 817 S.W.2d 142, 145 (TexApp. — Houston [1st Dist.] 1991, writ denied). If the Trimbles would have had consumer status to pursue a DTPA claim against Itz and Hall, then State Farm, as the Trimbles’ subrogee, stands in their shoes.1 McAllen State Bank v. Linbeck Constr. Corp., 695 S.W.2d 10, 24 n. 5 (Tex.App.— Corpus Christi 1985, writ ref d n.r.e.) (without in any way limiting its holding to subro-gees that intervene, rather than file suit either in their own name or in the name of their subrogors, court holds that bank’s sub-rogee stands in bank’s shoes for purposes of consumer status under the DTPA).2 If State Farm recovers an amount in excess of its payment, then the excess should be awarded to the Trimbles. Id. They may choose to collect this excess or to forego collection.
In short, it is simply no answer to say, as the majority does, that State Farm would not qualify as a consumer. State Farm is asserting the Trimbles’ claim as the Trimbles’ sub-rogee. If the Trimbles had consumer status as to this claim, then State Farm, as the Trimbles’ subrogee, stands in their shoes. Nor is it any answer to say, as the majority does, that State Farm is limited to intervening in an action brought by the Trimbles. State Farm is entitled to pursue the Trim-bles’ claim in its own name or in the Trim-bles’ name, and its right of subrogation is in no way dependent upon the Trimbles’ wishes. For these reasons, I dissent.

. I recognize that public policy precludes the assignment of certain types of causes of action. See, e.g., Elbaor v. Smith, 845 S.W.2d 240 (Tex. 1992) (invalidating Mary Carter agreement, in which plaintiff assigns part of cause of action to settling defendant); International Proteins Corp. v. Ralston-Purina Co., 744 S.W.2d 932, 934 (Tex. 1988) (invalidating joint tortfeasor's purchase of cause of action from plaintiff to whose injury joint tortfeasor contributed); Zuniga v. Groce, Locke & Hebdon, 878 S.W.2d 313 (Tex.App. — San Antonio 1994, writ ref'd) (invalidating client’s assignment of legal malpractice claim arising out of underlying claim to plaintiff in underlying claim). However, the same public policy that underlies the doctrine of subrogation — ensuring that tortfeasors ultimately pay the loss occasioned by their conduct, rather than insurers and the insurance-buying public — would appear to weigh in favor of permitting an insured’s assignment of his DTPA claim to his insurer.

. The only case cited by Itz in support of its argument to the contrary did not so hold and did not even involve subrogation. See Fireman’s Fund Ins. Co. v. Murchinson, 937 F.2d 204 (5th Cir.1991).