Summary
In Hossier Casualty Co. v. Davis, supra (172 Ohio St. 5), this court held that "where only a part of a property damage claim is paid by the insurer and it becomes subrogated to only a part of the claim against the tort-feasor, such tort-feasor may require either the assignor or the subrogee to be made a party to an action brought against him by the other.
Summary of this case from Nationwide Ins. Co. v. SteigerwaltOpinion
No. 36430
Decided March 8, 1961.
Actions — Personal injuries and property damage — Single cause of action arises, when — Insurer subrogated for property damage paid insured — Separate action against tort-feasor for amount paid — Parties defendant where insurer pays only part of property damage.
1. Where one person suffers both personal injury and property damage as a result of the same wrongful act, only a single cause of action arises in favor of such person. ( Rush v. City of Maple Heights, 167 Ohio St. 221, approved and followed.)
2. Where, by virtue of a prior contract of indemnity and subrogation, an insurer pays its insured for property damage sustained and becomes thereby subrogated to the rights of its insured to the amount of such payment, such insurer may prosecute a separate action against the party causing such injury to the extent of the amount paid under such contract. (Paragraphs six, seven and eight of the syllabus of Vasu v. Kohlers, Inc., 145 Ohio St. 321, approved and followed.)
3. Where only a part of a property damage claim is paid by the insurer and it becomes subrogated to only a part of the claim against the tort-feasor, such tort-feasor may require either the assignor or the subrogee to be made a party to an action brought against him by the other.
APPEAL from the Court of Appeals for Marion County.
The facts are succinctly and accurately stated in the brief of plaintiff, appellee herein, as follows:
"Plaintiff-appellee, The Hoosier Casualty Company filed suit against Carl Davis, defendant-appellant on March 25, 1958, in the Municipal Court of Marion, Ohio, and alleged that it was subrogated to the rights of Gertrude Peterson against Carl Davis for damage to an automobile owned by Gertrude Peterson, and insured by The Hoosier Casualty Company with a $50 deductible collision policy and that the damage to her automobile arose out of an accident occurring August 6, 1956, in Marion, Ohio, in which an automobile operated by Carl Davis struck the automobile of Gertrude Peterson, from the rear.
"Carl Davis filed an answer to this action and by way of second defense alleged that Gertrude Peterson, on February 26, 1957, filed a suit against Carl Davis in the Court of Common Pleas, Marion County, Ohio, to recover damage for personal injuries received in the accident with Carl Davis on August 6, 1956, and alleged that this action for personal injuries was terminated by a settlement, and that Gertrude Peterson's action for personal injuries was dismissed with prejudice to the bringing of a new action and that Gertrude Peterson executed a release of all claims in favor of Carl Davis.
"The Hoosier Casualty Company filed a reply to the second defense of Carl Davis and admitted the allegations of the answer pertaining to the dismissal of the personal injury action filed by Gertrude Peterson and denied for want of knowledge, the existence and terms of any release executed by her in favor of Carl Davis, and further alleged that on August 16, 1956, prior to the filing of the injury suit by Gertrude Peterson, Carl Davis was notified of the interest and extent of payment made to Gertrude Peterson by The Hoosier Casualty Company under the terms of its collision policy, and alleged that receipt of said notice was acknowledged by the agents of Carl Davis on October 8, 1956, and again on November 26, 1956.
"Thereafter Carl Davis filed a motion for judgment on the pleadings and the Municipal Court of Marion, Ohio, entered judgment in favor of defendant, Carl Davis.
"Plaintiff-appellee then appealed to the Court of Appeals of Marion County, Ohio, and the Court of Appeals reversed the judgment of the Municipal Court of Marion, Ohio, and remanded this action to that court.
"Carl Davis filed his notice of appeal timely, and his motion to certify was allowed by this court."
Mr. E.G. Belhorn, for appellee.
Messrs. Sebastian, Fais Durst, for appellant.
The question to be decided may be stated as follows: May the subrogee of a part of a property damage claim under a $50 deductible automobile collision policy maintain an action against the tort-feasor, where the insured under such deductible policy brought a separate action for personal injuries which was settled and dismissed before the bringing of the action for part of the property damage by the subrogated insurance company?
Or stated more broadly, the question presented is the effect of the decision in Rush v. City of Maple Heights, 167 Ohio St. 221, 147 N.E.2d 599, on the rights of an insurance company subrogated to part of its insured's property damage claim after its insured has settled his claim.
In Rush v. Maple Heights, supra, this court held that when a person suffers both personal injuries and property damage as a result of the same wrongful act, only a single cause of action arises and, in so holding, overruled paragraph four of the syllabus in Vasu v. Kohlers, Inc., 145 Ohio St. 321, 61 N.E.2d 707, 166 A.L.R., 855.
The fourth paragraph of the syllabus of the Vasu case had held that injuries to both person and property suffered by the same person are infringements of different rights and give rise to distinct causes of action, and that recovery on one was, in the absence of estoppel, no bar to recovery on the other.
As was pointed out by Judge Herbert in the majority opinion in the Rush case, "the decision of the question actually in issue in the Vasu case is found in paragraphs six, seven and eight of the syllabus." Or, as it was more pointedly noted by Judge Stewart in his concurring opinion, "neither the discussion in the Vasu case as to whether a single or double cause of action arises from one tort nor the language of the fourth paragraph of the syllabus was necessary to decide the issue presented in the case, and obviously both such language and such paragraph are obiter dicta and, therefore, are not as persuasive an authority as if they had been appropriate to the question presented."
The Vasu case was an action started by an insured after judgment had been rendered against his insurer in an action initiated by it after having paid the insured for damages to his automobile. The defense of res judicata was raised against the insured based on the judgment against his insurer. A unanimous court held, as follows, in the sixth, seventh and eighth paragraphs of the syllabus:
"6. Where an injury to person and to property through a single wrongful act causes a prior contract of indemnity and subrogation as to the injury to property, to come into operation for the benefit of the person injured, the indemnitor may prosecute a separate action against the party causing such injury for reimbursement for indemnity monies paid under such contract.
"7. Parties in privy, in the sense that they are bound by a judgment, are those who acquired an interest in the subject matter after the beginning of the action or the rendition of the judgment; and if their title or interest attached before that fact, they are not bound unless made parties.
"8. A grantor or assignor is not bound, as to third persons, by any judgment which such third persons may obtain against his grantee or assignee, adjudicating the title to or claim for the interest transferred, unless he participated in the action in such manner as to become, in effect, a party."
None of those paragraphs of the syllabus in the Vasu case was disturbed by the holding of this court in Rush v. Maple Heights, supra. Nor did the court intend to disturb any of them.
The factual pattern which gave rise to the litigation in Rush v. Maple Heights, when viewed in the light of the practice which prevailed in some of the larger counties which have several Municipal Courts, makes the decision in that case more logical, perhaps essential. As happened in that case, after an accident, the person injured (and it must be remembered that in that case there was only one party plaintiff involved, the injured party) instituted an action for property damage in one of the Municipal Courts of Cuyahoga County. At or about the same time, the same party brought an action for personal injuries in the Common Pleas Court of Cuyahoga County. The property damage action in the Municipal Court was pressed for trial which resulted in a judgment for the plaintiff for $100 and a specific finding, requested by the plaintiff, that the defendant was guilty of negligence, which negligence was the proximate cause of the plaintiff's injury.
When the case came on for trial later on the crowded docket of the Common Pleas Court, the plaintiff filed a motion for an order setting the cause for trial on the issue of damages alone for the reason that the liability of the defendant had been previously determined in the Municipal Court, and that the Municipal Court judgment was therefore res judicata as to the defendant's negligence. Ultimately this court adopted what it considered to be the majority and better rule in this country that where a person suffers both personal injuries and property damage as a result of the same wrongful act, only a single cause of action arises in favor of that person.
But had the original action for property damages been brought by the insurance company, as in the Vasu case, a judgment either for or against it could not be res judicata as to the insured in his action against the tort-feasor because there would not be an exact identity of parties. State, ex rel. Ohio Water Service Co., v. Mahoning Valley Sanitary District, 169 Ohio St. 31, 157 N.E.2d 116.
It is perhaps desirable, to the end of minimizing litigation, that insured and insurer join in bringing one action to recover both the deductible and nondeductible portions of property damage. But it is not necessary to do so, although such joinder may be required upon motion of the tort-feasor. Cleveland Paint Color Co. v. Bauer Mfg. Co., 155 Ohio St. 17, 97 N.E.2d 545; National Retailers Mutual Ins. Co. v. Gross, 142 Ohio St. 132, 50 N.E.2d 258. See, also, Holibaugh v. Cox, 167 Ohio St. 340, 148 N.E.2d 677.
Under our holding in Rush v. Maple Heights, a cause of action existing in one person cannot be split, so as to permit him to bring two actions on that one cause of action. On the other hand, one who has succeeded to a part of a claim by virtue of a contract of assignment should not be precluded from recovering on that part by payment to his assignor of the unassigned part of the claim. Particularly should that be true where, as in this case, the tort-feasor had knowledge of the assignment. Nor should one who has perhaps suffered severe personal injuries be precluded from attempting to recover for those injuries merely because the one allegedly responsible therefor has settled the often comparatively minor property damage with an insurance carrier who has been subrogated to the injured party's property damage claim.
We conclude, therefore, that:
Where one person suffers both personal injuries and property damage as a result of the same wrongful act, only a single cause of action arises in favor of such person.
Where, by virtue of a prior contract of indemnity and subrogation, an insurer pays its insured for property damage sustained and becomes thereby subrogated to the rights of its insured to the amount of such payment, such insurer may prosecute a separate action against the party causing such injury to the extent of the amount paid under such contract.
Where only a part of a property damage claim is paid by the insurer and it becomes subrogated, therefore, to only a part of the claim against the tort-feasor, such tort-feasor may require either the assignor or the subrogee to be made a party to an action brought against him by the other.
It follows from what has been said that the judgment of the Court of Appeals must be, and it hereby is, affirmed.
Judgment affirmed.
WEYGANDT, C.J., TAFT, MATTHIAS, HERBERT and O'NEILL, JJ., concur.
ZIMMERMAN, J., concurs in paragraphs two and three of the syllabus and in the judgment.
In my opinion, the judgment of the Court of Appeals in this case can be summarily affirmed on authority of paragraph three of the syllabus of P., C., C. St. L. Ry. Co. v. Volkert (1898), 58 Ohio St. 362, 50 N.E. 924. However, neither the Court of Appeals nor either of the parties cited that case. Furthermore, both parties indicated in their briefs and arguments that they wanted this court to base its decision on answers to the questions dealt with in paragraphs one and two of the syllabus of this case; and the answering of those questions necessarily leads to consideration of the questions answered by paragraph three of that syllabus.
Therefore, and also because of the difficulty that this court has had in disposing of the dicta of paragraph four of the syllabus of Vasu v. Kohlers, Inc. (1945), 145 Ohio St. 321, 61 N.E.2d 707, 166 A.L.R., 855 (see Markota v. East Ohio Gas Co., 154 Ohio St. 546, 97 N.E.2d 13, distinguishing and refusing to follow that paragraph because it represented dicta, and Rush v. City of Maple Heights, 167 Ohio St. 221, 147 N.E.2d 599, specifically overruling it as dicta), there is probably considerable justification for this court's accommodating the parties to this case by basing its decision on answers to the questions dealt with in the syllabus of this case.
This opinion is written because of my apprehension that portions of the opinion in Rush v. Maple Heights, supra ( 167 Ohio St. 221, at pages 233 and 234), and of the opinion in Vasu v. Kohlers, Inc., supra ( 145 Ohio St. 321, at pages 339 to 342), may still mislead some to conclude (a) that this court does not mean what it is saying in paragraphs one and three of the syllabus of this case and (b) that, in the instance specified in paragraph two of the syllabus of this case, a single cause of action may always in effect be split so as to subject the tort-feasor to the necessity of defending on the merits more than one action based upon that single cause of action.
Admittedly in the instant case, the insurer-subrogee had notified the tort-feasor of its interest in the single cause of action of its insured, that was the subject matter of the previous action of the insured against the tort-feasor, before the insured filed that action. Therefore, the tort-feasor could have avoided being subjected to more than one action based upon that single cause of action if he had required that the insurer-subrogee be made a party to that action of the insured. His right to so require is recognized in paragraph three of the syllabus in the instant case and by our decisions in Cleveland Paint Color Co. v. Bauer Mfg. Co. (1951), 155 Ohio St. 17, 97 N.E.2d 545; Holibaugh v. Cox (1958), 167 Ohio St. 340, 148 N.E.2d 677; and National Retailers Mutual Ins. Co. v. Gross (1943), 142 Ohio St. 132, 50 N.E.2d 258.
The insurer-subrogee and the insured were, as to the single cause of action that was the subject of the insured's action, "parties * * * united in interest" within the meaning of Section 2307.20, Revised Code. As such, and also because of Section 2307.05, Revised Code, requiring actions generally to "be prosecuted in the name of the real party in interest," our statutes require that the insurer-subrogee and the insured "be joined as plaintiffs or defendants" in that action of the insured. Sections 2307.20 and 2307.05, Revised Code. Since the insurer-subrogee had not been made a party, there was, within the meaning of Section 2309.08 (F), Revised Code, "a defect of parties" which could, as indicated by paragraph three of the syllabus in the instant case, have stopped that action of the insured unless the insurer-subrogee was a party thereto. See Sections 2309.08 (F) and 2309.10, Revised Code. However, by failing to raise that objection to the petition by demurrer or by answer, the tort-feasor waived the right to require that the insurer-subrogee be made a party to that action by the insured. See Section 2309.10, Revised Code.
So far as pertinent, the sections of our Revised Code referred to in this portion of the opinion read:
Section 2307.05 "An action must be prosecuted in the name of the real party in interest * * *."
Section 2307.20 "Parties who are united in interest must be joined as plaintiffs or defendants. If the consent of one who should be joined as plaintiff cannot be obtained * * * and that fact is stated in the petition, he may be made a defendant."
Section 2309.08 "The defendant may demur to the petition only when it appears on its face that:
"* * *
"(B) The court has no jurisdiction of the subject of the action;
"* * *
"(D) There is another action pending between the same parties for the same cause;
"* * *
"(F) There is a defect of parties plaintiff or defendant * * *."
Section 2309.10 "When, on the face of a petition, no ground of demurrer appears, the objection may be taken by answer. If the objection is not made in either way, the defendant has waived it * * * [with exceptions not applicable in instant case]."
For comparable provisions relative to counterclaims see Sections 2309.17, 2309.18, 2309.22, and 2309.26, Revised Code.
A principal purpose of the requirements of Sections 2307.05 and 2307.20, Revised Code, that an action be prosecuted by the real party in interest and that "parties united in interest" in a single cause of action "be joined as plaintiffs or defendants," is to avoid the prosecution on the merits of more than one action based upon a single cause of action. Where, as in the instant case, the one, against whom that single cause of action may be asserted, has knowingly waived his right to avoid an action based upon assertion of only a part of that cause of action by the owner of that part, such one cannot later question the assertion in a separate action of the remaining part of that claim by the owner of such remaining part. That is the situation in this case; and paragraph two of the syllabus in the instant case must be read and interpreted in the light of and as applying to facts such as those in this case.
The pleadings in the instant case indicate that the insurer-subrogee was not a party to the action brought by the insured against the tort-feasor and those pleadings allege that the tort-feasor knew of the interest of the insurer-subrogee in the insured's single cause of action against the tort-feasor at a time before that action was instituted. Of course, if the insurer-subrogee had originally been a party to the action of the insured against the tort-feasor (based upon the single cause of action that is also the basis of the action of the insurer-subrogee in the instant case) or had been brought in as a party to that action, then any judgment in the insured's action disposing of that single cause of action could obviously have been pleaded as a bar to the assertion in the instant case of the interest of the insurer-subrogee in that single cause of action.
As so clearly indicated by paragraph three of the syllabus in the instant case, the tort-feasor can require assertion of the insured's single cause of action by both the insured and the insurer-subrogee. If this is done in the insured's suit against the tort-feasor before the insurer-subrogee institutes a separate action of the kind recognized in paragraph two of the syllabus of the instant case, then the separate suit of the insurer-subrogee can be stopped by pleadings (demurrer, or answer where necessary) disclosing that there is "another action pending" (that of the insured) "between the same parties for the same cause." Sections 2309.08 (D) and 2309.10, Revised Code.
However, if at the first opportunity to do so, either in an action by the insured or one by the insurer-subrogee, the tort-feasor does not require that both the insurer-subrogee and insured be parties to an action to enforce part or all of the insured's single cause of action, then the tort-feasor may thereby waive his right to subsequently require their joinder as parties in an action by either to enforce his interest in that single cause of action.
Since the insurer-subrogee had acquired its interest in the insured's cause of action before the insured's action against the tort-feasor to enforce that cause of action and since the insurer-subrogee was not a party to that action, the judgment in that action cannot affect the interest of the insurer-subrogee in that cause of action. Vasu v. Kohlers, Inc., supra ( 145 Ohio St. 321), paragraphs seven and eight of syllabus.
This brings us back to P., C., C. St. L. Ry. Co. v. Volkert, supra ( 58 Ohio St. 362), which clearly indicates that, if the tort-feasor or debtor knows of the interest of the insurer-subrogee in the cause of action of the insured against the tort-feasor, the tort-feasor cannot pay or "compromise" that claim with the insured "alone and thus defeat the claim of the" insurer-subrogee (who is admittedly in effect a partial assignee of that claim or cause of action) "to recover" on account of his interest in that cause of action.