Opinion
NOT TO BE PUBLISHED
Sonoma County Super. Ct. No. SCV238286.
Retired Associate Justice of the Court of Appeal, First District, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
Allied Property & Casualty Insurance Company (Allied) appeals from a judgment of dismissal entered after the trial court granted defendants’ motion for judgment on the pleadings. This case arises out of a car accident that injured a child at defendant and respondent St. Eugene’s Elementary School (St. Eugene’s). Allied paid benefits to the child’s family under an automobile insurance policy including underinsured motorist coverage, and sought to assert a right to subrogation by suing defendants for their alleged tortious contributions to the accident. The trial court, relying on Hartford Fire Ins. Co. v. Macri (1992) 4 Cal.4th 318 (Macri), concluded there is no subrogation right in the underinsured motorist context. We affirm.
Factual and Procedural Background
Because this matter was resolved at the pleading stage of the litigation by way of a motion for judgment on the pleadings, the following summary of the facts is derived from the allegations set forth in Allied’s complaint. (See Angelucci v. Century Supper Club (2007) 41 Cal.4th 160, 166.)
On March 17, 2000, a nine-year-old student at defendant St. Eugene’s was struck by a car in the school yard and severely injured. The boy settled with the driver for the driver’s insurance policy limit of $100,000. The boy’s family then filed an underinsured motorist claim with their insurer, Allied, which paid them $285,000.
Allied filed suit against St. Eugene’s and others in 2006. It alleged, “[p]ursuant to the legal doctrine of ‘insurance subrogation,’ Allied ‘stands in the shoes’ of [the injured child] for purposes of prosecuting this action for recovery.” With respect to St. Eugene’s, Allied alleged the school “failed to take any measures to protect against the foreseeable possibility that vehicles would enter into an area where students were known and expected to congregate . . . .” Defendants moved for judgment on the pleadings, arguing there was no statutory right to subrogation in the underinsured motorist context. The trial court granted the motion and entered judgment in favor of defendants.
Discussion
Express statutory authorization is required to create subrogation rights for non-assignable claims, like the personal injury claim involved in the present case. (Fireman's Fund Ins. Co. v. McDonald, Hecht & Solberg (1994) 30 Cal.App.4th 1373, 1383; see also Fifield Manor v. Finston (1960) 54 Cal.2d 632, 639; Mercury Ins. Co. v. Enterprise Rent-A-Car Co. (2000) 80 Cal.App.4th 41, 49-50.) Allied maintains it is entitled to subrogation under Insurance Code section 11580.2, subdivision (g) which states: “The insurer paying a claim under an uninsured motorist endorsement or coverage shall be entitled to be subrogated to the rights of the insured to whom the claim was paid against any person legally liable for the injury or death to the extent that payment was made.” Our review of the trial court’s judgment is de novo. (Angelucci v. Century Supper Club, supra, 41 Cal.4th at p. 166; Mercury Ins. Co. v. Vanwanseele-Walker (1996) 41 Cal.App.4th 1093, 1100.)
All further statutory references are to the Insurance Code unless otherwise indicated.
Uninsured and underinsured motorist policies are governed by section 11580.2. (Quintano v. Mercury Casualty Co. (1995) 11 Cal.4th 1049, 1053 (Quintano).) “The purpose of the statute is ‘to protect one lawfully using the highway by assuring him of payment of a minimum amount of an award to him for bodily injury caused by the actionable fault of another driver.’ ” (Macri, supra, 4 Cal.4th at p. 324, quoting Fireman’s Fund etc. Co. v. Ind. Acc. Com. (1964) 226 Cal.App.2d 676, 677-678.) “For many purposes,” section 11580.2 treats as “synonymous” claims arising from accidents involving uninsured and underinsured vehicles. (Rudd v. California Casualty Gen. Ins. Co. (1990) 219 Cal.App.3d 948, 953; see also Macri, supra, at pp. 331-332; Quintano, supra, at p. 1053.) That is, provisions of section 11580.2 applicable to uninsured vehicles may be applied to underinsured vehicles. (See, e.g., Rudd, supra, at p. 954 [setoff for workers’ compensation benefits]; Chrisman v. Superior Court (1987) 191 Cal.App.3d 1465, 1468-1469 [binding arbitration]; see also Macri, supra, at pp. 331-332.)
Although in many respects section 11580.2 treats uninsured and underinsured motorist claims the same, section 11580.2, subdivision (p) contains various provisions specific to underinsured motorist coverage. (Macri, supra, 4 Cal.4th at p. 324.) In particular, “[t]he provisions governing uninsured and underinsured motorist coverage differ substantially in the area of settlement of claims, setoff, reimbursement, and procedures before settlement.” (Ibid.) Subdivision (p) also provides, “[i]f the provisions of this subdivision conflict with subdivisions (a) through (o) [governing uninsured motorist coverage], the provisions of this subdivision shall prevail.” (§ 11580.2, subd. (p).)
In Macri, supra, 4 Cal.4th 318, the California Supreme Court considered section 11580.2, subdivision (c)(3), under which an insured who settles with or obtains a judgment against an uninsured motorist without the consent of his insurer forfeits the right to seek uninsured motorist coverage. The consent requirement protects the insurer’s right of subrogation found in section 11580.2, subdivision (g). (Macri, supra, at pp. 325, 329.) The court rejected the plaintiff insurer’s contention the consent requirement applied to a claim in the underinsured motorist context. (Id. at pp. 321-322.) The ruling turned in part on the court’s conclusion that there is no right to subrogation in the underinsured motorist context. (Id. at p. 329.) Such a right “is not consistent with the plain meaning of the statute” because, among other things, an underinsured motorist carrier has a right to reimbursement or credit for amounts the insured receives from the underinsured driver or his insurer. (Ibid.; see also § 11580.2, subdivision (p)(5) “The insurer paying a claim under this subdivision shall, to the extent of the payment, be entitled to reimbursement or credit in the amount received by the insured from the owner or operator of the underinsured motor vehicle or the insurer of the owner or operator”.) This “precludes the insurer from asserting additional subrogation rights.” (Macri, supra, at p. 328.)
In other words, section 11580.2, subdivision (p)(5), “establishes an alternative to providing an under Insurance carrier with subrogation rights.” (Mercury Ins. Co. v. Vanwanseele-Walker, supra, 41 Cal.App.4th at p. 1106; see also Macri, supra, 4 Cal.4th at p. 324.) The decision in Macri has been explained as follows: In the uninsured motorist context, “[a]ny judgment against or settlement with the tortfeasor necessarily extinguishes the insurer’s subrogation rights. Therefore the insurer must be permitted to control such activities. This right of subrogation does not exist in the underinsured motorist context . . . because the insurer is entitled instead to a credit or reimbursement for all amounts received from other sources. [Citation.]” (Arrasmith v. State Farm Ins. Co. (1994) 24 Cal.App.4th 12, 17, disapproved on another ground in Quintano, supra, 11 Cal.4th at pp. 1064-1066.)
Contrary to Allied’s argument that it is entitled to subrogation under section 11580.2, subdivision (g), Macri held, “in contrast to the uninsured motorist provisions, there is no right to subrogation under the underinsured motorist provisions.” (Macri, supra, 4 Cal.4th at p. 324.) This legal proposition has been restated on numerous occasions. (Quintano, supra, 11 Cal.4th at p. 1056, 1060-1061, 1065; Mercury Ins. Co. v. Vanwanseele-Walker, supra, 41 Cal.App.4th at p. 1106; Mercury Ins. Co. v. Enterprise Rent-A-Car Co., supra, 80 Cal.App.4th at pp. 49-50; Home Ins. Co. v. Zurich Ins. Co. (2002) 96 Cal.App.4th 17, 27; Arrasmith v. State Farm Ins. Co., supra, 24 Cal.App.4th at p. 17.)
Allied suggests Macri supports the proposition that an insurer paying underinsured motorist benefits does not have subrogation rights as to the underinsured motorist or his carrier, but the case does not foreclose the possibility of subrogation rights as to other tortfeasors, such as the defendants in this case. Allied requests we recognize in the underinsured motorist context a right to subrogation as to third-party tortfeasors. However, the plain language of section 11580.2, subdivision (g) provides a right of subrogation as to all tortfeasors. We are bound by the California Supreme Court’s conclusion that section 11580.2, subdivision (g) is inapplicable in the underinsured motorist context because the Legislature intended the right to reimbursement or credit to replace the right to subrogation. (People v. Birks (1998) 19 Cal.4th 108, 116, fn. 6, see also Auto Equity Sales, Inc. v. Superior Court (1962) 57 Cal.2d 450, 455.) Nor do we do not have the authority to rewrite section 11580.2, subdivision (g) to provide for subrogation as to only third-party tortfeasors in the under Insurance context. (Fujitsu IT Holdings, Inc. v. Franchise Tax Bd. (2004) 120 Cal.App.4th 459, 478, quoting Farnow v. Superior Court (1990) 226 Cal.App.3d 481, 486 [“ ‘a court may not rewrite a law, supply an omission or give words an effect different from the plain and direct import of the terms used’ ”].) Allied has not shown express statutory authorization for its subrogation claim. (Fireman’s Fund Ins. Co. v. McDonald, Hecht & Solberg, supra, 30 Cal.App.4th at p. 1383.)
Allied advances various policy reasons why insurers should have the right to subrogation in the circumstances of this case. Those arguments are better directed to the Legislature, which has the power to provide a limited right of subrogation in the underinsured motorist context, if it is appropriate to do so. (See Macri, supra, 4 Cal.4th at p. 334, Panelli, J. concurring [urging “the Legislature to study and consider the consequences of denying subrogation to the underinsured motorist carriers . . .”]; Mercury Ins. Co. v. Vanwanseele-Walker, supra, 41 Cal.App.4th at p. 1103 [“our courts have uniformly resisted requests that they rewrite [section 11580.2] to achieve a perceived legislative or public policy goal”].)
At oral argument, Allied cited to a recent decision, Wedemeyer v. Safeco Ins. Co. of America (2008) 160 Cal.App.4th 1297, 1306, which holds that an insured need only exhaust a tortfeasor’s motor vehicle liability policy before seeking to recover under an underinsured motorist policy. Nothing in that decision is inconsistent with this court’s analysis in the present case.
Disposition
The judgment is affirmed.
We concur: SIMONS, ACTING P. J., NEEDHAM, J.