State Farm Mutual Auto. Ins. v. Sol ( 1981 )

IN THE SUPREME COURT OF THE STATE OF MONTANA
No. 80-78
STATE FARM MUTUAL AUTOMOBILE INSURANCE
COMPANY,
Defendant and Third-Party Plaintiff,
CINDY J. SOLEM,
Plaintiff and Appellant,
HELEN G . BUCKINGHAM,
Third-Party Defendant and Respondent.
O R D E R
The above-captioned opinion shall be amended to
read as follows:
Page 5, lines 9, 10, 11, 12 and 13 from the
top shall read:
". .
. 1810, mandated that result. But that
case held only that impleading parties not
sued by the plaintiff, for purposes of
contribution, is not proper. This is a
subrogation case based on contract, and
Osier has no application."
DATED this 3_td day of February, 1981.
Justices !
i;
i
No. 80-78
IN THE SUPREME COURT OF THE STATE OF MONTANA
1981
STATE FARM MUTUAL A T ! I B L
UOIOIE INSURANCE
COMPANY,
Defendant and Third-Party Plaintiff,
CINDY J. SOLEM,
Plaintiff and Appellant,
vs.
HELEN G. BUCKINGHAM,
Third-Party Defendant and Respondent.
Appeal from: District Court of the Eighth Judicial District,
In and for the County of Missoula, Montana
Honorable Jack L. Green, Judge presiding.
Counsel of Record:
For Appellant:
Williams Law Firm, Missoula, Montana
Berger, Anderson, Sinclair and Murphy, Billings, Montana
For Respondent:
Garlington, Lohn and Robinson, Missoula, Montana
Submitted on briefs: July 11, 1980
~ecided
:
JAN 2 8 1987
Mr. J u s t i c e D a n i e l J . S h e a d e l i v e r e d t h e O p i n i o n o f t h e C o u r t .
S t a t e Farm M u t u a l A u t o m o b i l e I n s u r a n c e Company s u e d b y
i t s i n s u r e d under an uninsured m o t o r i s t p r o v i s i o n , appeals
from an order of the Missoula County District Court
dismissing its third-party c o m p l a i n t which s o u g h t i n d e m n i t y
from t h e u n i n s u r e d m o t o r i s t f o r any l i a b i l i t y t h e i n s u r a n c e
company m i g h t be adjudged t o owe t h e p l a i n t i f f . W hold
e
t h a t t h e D i s t r i c t C o u r t e r r e d i n n o t a l l o w i n g S t a t e Farm t o
implead t h e t h i r d - p a r t y defendant.
Cindy J. Solem a s p l a i n t i f f f i l e d a complaint against
S t a t e Farm a l l e g i n g that Solem was a passenger in a car
driven by William J. Schultz which collided with a car
d r i v e n by H e l e n G. Buckingham, an u n i n s u r e d m o t o r i s t . The
complaint alleged that the negligence of the uninsured
motorist was a proximate cause of the collision and of
personal injury to Solem. It further alleged that both
Solem and S c h u l t z were i n s u r e d a t t h e t i m e o f t h e c o l l i s i o n
under s e p a r a t e p o l i c i e s of i n s u r a n c e w i t h S t a t e Farm, each
o f which p r o v i d e d u n i n s u r e d m o t o r i s t c o v e r a g e i n t h e amount
of $25,000/$50,000. Solem has filed suit under the
u n i n s u r e d m o t o r i s t p r o v i s i o n s of b o t h p o l i c i e s and p r a y s f o r
j u d g m e n t a g a i n s t S t a t e Farm i n t h e amount o f $ 5 0 , 0 0 0 o r s u c h
l e s s e r amount a s a j u r y m i g h t d e t e r m i n e .
S t a t e Farm f i l e d i t s answer t o t h e c o m p l a i n t a d m i t t i n g
t h a t t h e c o l l i s i o n occur r e d , b u t denying t h e negligence of
the uninsured motorist. State Farm's answer raises as
affirmative defenses: (1) t h a t t h e s u i t a g a i n s t S t a t e Farm
is premature unless it is first determined that the
plaintiff is l e g a l l y e n t i t l e d t o r e c o v e r damages f r o m t h e
uninsured motorist, and ( 2 ) t h a t t h e u n i n s u r e d m o t o r i s t is
a n i n d i s p e n s a b l e p a r t y u n d e r R u l e 1 9 , M.R.Civ.P.
S t a t e Farm t h e n filed a third-party c o m p l a i n t naming
Helen G. Buckingham a s t h i r d - p a r t y defendant. The t h i r d -
p a r t y c o m p l a i n t r e c i t e s t h e f a c t t h a t Solem h a s sued S t a t e
Farm u n d e r t h e u n i n s u r e d p r o v i s i o n s o f t h e p o l i c y and t h e n
a l l e g e s t h a t Buckingham is t h e u n i n s u r e d m o t o r i s t i n v o l v e d
i n t h e c o l l i s i o n mentioned i n Solem's complaint. S t a t e Farm
t h e n seeks i n d e m n i t y f r o m Buckingham f o r " s u c h sums a s may
b e a d j u d g e d a g a i n s t i t i n f a v o r o f C i n d y J. S o l e m , and f o r
their costs."
Buckingham moved t o dismiss the third-party complaint
against her on the grounds it failed to state a claim
a g a i n s t h e r on w h i c h r e l i e f could be g r a n t e d . Buckingham
and S t a t e Farm f i l e d b r i e f s . The D i s t r i c t C o u r t o r i g i n a l l y
d e n i e d t h e motion t o d i s m i s s , b u t t h e n r e v e r s e d i t s e l f and
dismissed t h e c l a i m a g a i n s t Buckingham. S t a t e Farm moved
for reconsideration of the order of dismissal and, after
argument, the District Court declined to change its
decision. P l a i n t i f f , Solem, h a s n o t s u b m i t t e d a b r i e f w i t h
t h i s Court i n support of or i n o p p o s i t i o n t o S t a t e Farm's
appeal.
The s o l e i s s u e b e f o r e u s i s w h e t h e r a n i n s u r e r , s u e d by
i t s i n s u r e d f o r r e c o v e r y o f u n i n s u r e d m o t o r i s t b e n e f i t s may
i m p l e a d t h e u n i n s u r e d m o t o r i s t u n d e r R u l e 1 4 ( a ) , M.R.Civ.P.
I f p l a i n t i f f e s t a b l i s h e s t h a t Buckingham was n e g l i g e n t
and c a u s e d t h e a c c i d e n t r e s u l t i n g i n p l a i n t i f f ' s injuries,
State Farm then is responsible under uninsured motorist
c o v e r a g e , t o p a y t h e amount o f t h e j u d g m e n t t o t h e e x t e n t o f
the applicable coverage. Upon p a y m e n t , S t a t e Farm would
t h e n be s u b r o g a t e d t o t h e r i g h t s o f p l a i n t i f f Solem and may
s e e k t o e s t a b l i s h t h a t amount f r o m Buckingham. S e e , Skauge
v. Mountain S t a t e s T e l . & Tel. ( 1 9 7 7 ) , 1 7 2 Mont. 521, 565
P.2d 628. We hold t h a t S t a t e Farm d o e s n ' t have t o w a i t
u n t i l it p a y s a judgment o b t a i n e d b e f o r e it h a s a r i g h t t o
b r i n g Buckingham i n t o t h e l a w s u i t . R u l e 1 4 ( a ) , M.R.Civ.P.,
expressly grants a defendant the procedural r i g h t t o bring
i n t o t h e l a w s u i t as a t h i r d - p a r t y d e f e n d a n t , a n y o n e who "may
b e " l i a b l e t o him. T h i s c a n be d o n e u n d e r t h e p r i n c i p l e o f
subrogation even if the l i a b i l i t y of the third party is
contingent and cannot be established until the original
d e f e n d a n t h a s been h e l d l i a b l e . 1 A B a r r o n and H o l t z o f f , 5
426 a t 664-73 (1960); 3 Moore's F e d e r a l P r a c t i c e , 5 14.08,
at 243-46; Moore's Federal Practice, S 14.10, at 281-88.
A l s o s e e , Crosby v. B i l l i n g s Deaconess H o s p i t a l ( 1 9 6 7 ) , 149
Mont. 3 1 4 , 426 P.2d 217 ( h o l d i n g t h a t d e f e n d a n t s h o u l d h a v e
been allowed to implead a third party under a theory of
indemnity). Under a t h e o r y o f s u b r o g a t i o n t o t h e i n s u r e d ' s
r i g h t s of recovery against the t h i r d party, federal courts
have r e g u l a r l y p e r m i t t e d t h e i n s u r e r t o implead t h a t p a r t y
as a t h i r d - p a r t y defendant. S e e , K i n g v . S t a t e Farm M u t u a l
I n s u r a n c e Co. (W.D. Ark. 1 9 6 7 ) , 274 F. Supp. 824; St. Paul
Fire & M a r i n e I n s u r a n c e Co. v . U n i t e d S t a t e s L i n e s Co. (2d
Cir. 1 9 5 8 ) , 258 F.2d 3 7 4 , c e r t . d e n . 359 U.S. 9 1 0 , 79 S . C t .
587, 3 L. Ed. 2d 574: Concordia College Corp. v. Great
A m e r i c a n I n s . Co. (D. Minn. 1 9 5 3 ) , 1 4 F.R.D. 403; G l e n F a l l s
I n d e m n i t y Co. v. A t l a n t i c Bldg. Corp. (4th Cir. 1 9 5 2 ) , 199
F.2d 60.
I n King v. S t a t e Farm M u t u a l I n s u r a n c e Co., supra, the
c o u r t s p e c i f i c a l l y h e l d t h a t a n i n s u r e r s u e d by i t s i n s u r e d
under an uninsured motorist provision, may bring the
uninsured t o r t f e a s o r into the lawsuit. The c o u r t r e j e c t e d
t h e a r g u m e n t ( w h i c h i s t h e same a r g u m e n t Buckingham makes
here) that the insurance company has no right of action
u n t i l it h a s a c t u a l l y p a i d t h e j u d g m e n t t o i t s i n s u r e d , and
therefore that impleader of the uninsured motorist should
n o t be p e r m i t t e d u n t i l p a y m e n t i s made. 274 F.Supp. a t 826.
W e a l s o r e j e c t t h i s argument.
W e a r e persuaded t h a t t h e b e t t e r p r a c t i c e is t o permit
impleader i n such p r a c t i c e s , and t h e r e f o r e t h a t t h e t r i a l
c o u r t e r r e d i n g r a n t i n g Buckingham's m o t i o n t o d i s m i s s . We
f i n d no a u t h o r i t y s u p p o r t i n g B u c k i n g h a m ' s position, and w e
f u r t h e r n o t e t h a t t h e t r i a l c o u r t g r a n t e d t h e motion under
the mistaken belief t h a t C o n s o l i d a t e d F r e i g h t w a y s Corp. v.
Osier (1979), Mont. , 605 P.2d 1076, 36 S t . R e p .
1810, mandated t h a t r e s u l t . But t h a t c a s e h e l d o n l y t h a t
t h e r e is no r i g h t o f c o n t r i b u t i o n o r i n d e m n i t y b e t w e e n j o i n t
tortfeasors - p a r i delecto.
in 605 P.2d a t 1 0 8 1 . Here, S t a t e
Farm i s n o t a t o r t f e a s o r and o b v i o u s l y i s n ' t - p a r i d e l i c t o
in
w i t h Buckingham: S o l e m ' s a c t i o n a g a i n s t S t a t e Farm i s n ' t a
t o r t a c t i o n ; r a t h e r , it i s a c o n t r a c t a c t i o n .
W h o l d t h a t S t a t e Farm may i m p l e a d Buckingham u n d e r a
e
theory of contingent liability based on subrogation.
L i b e r a l l y allowing impleader of c o n t i n g e n t l y l i a b l e p a r t i e s
is c o n s i s t e n t w i t h t h e u n d e r l y i n g p u r p o s e s of Rule 14. The
rule is d e s i g n e d to reduce m u l t i p l i c i t y of l i t i g a t i o n by
settling all disputes arising from one o c c u r r e n c e i n one
suit, to spare an unsuccessful defendant the burden of
b e a r i n g a judgment a g a i n s t him w h i l e h e b r i n g s s u i t a g a i n s t
someone liable to him for plaintiff 's claim, to prevent
i n c o n s i s t e n t j u d g m e n t s on t h e same f a c t s , and t o s e t t l e t h e
u l t i m a t e l i a b i l i t y f o r a c l a i m w i t h a minimum o f e f f o r t and
expense. S e e , C. W r i g h t and A. Miller, 6 Federal Practice
and P r o c e d u r e , .
§ 1442 ( 1 9 7 1 ) ; See a l s o , Glen F a l l s I n d e m n i t y
Co. v . A t l a n t i c B u i l d i n g C o r p . , s u p r a , 1 9 9 F.2d a t 63; S t .
Paul Fire & Marine I n s u r a n c e v. United S t a t e s L i n e s Co.,
supra. T h e r e i s no good r e a s o n t o a f f o r d Buckingham t h e
procedural p r o t e c t i o n of being a b l e t o postpone being sued
u n t i l t h e a c t i o n b e t w e e n Solem and S t a t e Farm i s c o n c l u d e d .
In fact, a contrary holding would not eliminate
Buckingham f r o m b e i n g a t l e a s t i n d i r e c t l y involved i n t h e
s u i t b e t w e e n Solem and S t a t e Farm. Plaintiff Solem m u s t
establish t h a t Buckingham n e g l i g e n t l y caused any i n jur ies
s h e r e c e i v e d and t h e r e f o r e , i t i s u n l i k e l y t h a t Buckingham
c o u l d a v o i d an a p p e a r a n c e i n c o u r t t o t e s t i f y .
The o r d e r o f the D i s t r i c t Court dismissing t h e third-
party complaint is vacated. The case is remanded with
i n s t r u c t i o n s t h a t t h e D i s t r i c t C o u r t r e q u i r e Buckingham t o
answer S t a t e Farm's t h i r d - p a r t y complaint.
F - 1
W Concur:
e
ChieL Justice
.........................
Justices
T h i s c a s e was s u b m i t t e d p r i o r t o J a n u a r y 5 , 1 9 8 1 .
Mr. Justice John C. Sheehy, specially concurring:
I agree with the result reached in the foregoing
opinion, which is the only proper result in the posture
of the case as it is received from the District Court by
this Court
What puzzles me is the fact that the insured sued his
insurer in the first instance by a direct action to establish
liability against the uninsured motorist. I believe all
insurance companies writing uninsured motorist coverage in
this state use a common form for such coverage, last amended,
I believe, in 1966. Under that common form, the insured
injured motorist may, after notice to his insurance company,
sue the responsible uninsured motorist to determine the extent
of the uninsured motorist's legal liability, if they are not
otherwise able to agree. Until the legal liability of the
uninsured motorist is determined, which in turn determines
the liability of the insurer, a direct action against the
insurer, in my opinion, is premature.
Suit first against the uninsured motorist would be in
conformance with the long-established rule in Montana that a
direct action against an insurer does not lie until the
liability of the insured has been established, Conley v.
U.S.F. & G. Co. (1934), 98 Mont. 31, 37 P.2d 565, Cummings v.
Reins (1910), 40 Mont. 599, 107 P. 904, and our further
long-standing rule that the injection of insurance into the
action determining liability is improper. Vonault v. O'Rourke
(1934), 97 Mont. 92, 33 P.2d 535.
If plaintiff here had properly sued Buckingham to determine
liability in the first place, the problem of this cause would
not have arisen.
Justice