Opinion
No. 89CV-F-37.
Decided November 21, 1989.
Burech Sargus and Stanley G. Burech, for plaintiff.
Gold, Khourey Turak and Louis H. Khourey, for defendants.
This matter is before the court on the memoranda of counsel, the court having previously found that the material facts herein are not contradicted in the pleadings.
On December 19, 1985, an employee of Associated Paper Stock, Inc. (plaintiff's insured) was involved in a motor vehicle collision with defendant Marcelene Porter. As a result of that accident, Mrs. Porter and her husband, Clyde, filed suit against plaintiff's insured for personal injury and loss of consortium, respectively. Trial was held before a jury which rendered a verdict in favor of the Porters in the sum of $50,000. Judgment on the verdict was satisfied, in full, by plaintiff, Cincinnati Insurance Company, on the day it was entered.
While the claim was pending, the Porters submitted to their own insurer, Nationwide Insurance Company ("Nationwide"), a claim for payment of medical bills incurred as a result of the accident in the amount of $1,194, which was paid to the Porters by Nationwide under the medical payments' coverage of their own insurance policy. Nationwide's policy with the Porters granted it the "right of subrogation" for such payment. Subsequently, Nationwide demanded payment from plaintiff for the amount paid to the Porters, which plaintiff eventually paid in full.
The medical bills for which these payments were made were introduced in evidence at the personal injury trial. Plaintiff now claims that the Porters have recovered twice for the same expense and that it has succeeded to Nationwide's right of subrogation under its contract with the Porters and seeks a judgment against the Porters for $1,194.
In support of its claim, plaintiff cites Edwards v. Passarelli Bros. Automotive Serv., Inc. (1966), 8 Ohio St.2d 6, 37 O.O.2d 298, 221 N.E.2d 708, 25 A.L.R.3d 1087, paragraph two of the syllabus, which held that "[w]here an advance payment is made to a possible tort-claimant upon condition that such payment is to be credited to the amount of any final settlement or judgment in favor of such tort-claimant, such sum shall be credited to any final judgment * * *." However, in Edwards, supra, the credit was not sought by virtue of a subrogation right to which the party claiming the credit had succeeded. In Edwards, supra, the credit was the result of a contractual condition established directly between the claimant and the alleged tortfeasor's insurer on behalf of the tortfeasor.
This is not a distinction without a difference. The "right of subrogation" to which plaintiff claims to have succeeded is set forth in the insurance contract between Nationwide and the Porters as follows:
"SUBROGATION
"We have the right of subrogation under the Physical Damage, Auto Liability, Medical Payments, Family Compensation, and Comprehensive Family Liability coverages in this policy. This means that after paying a loss to you or others under this policy, we will have the insured's right to sue for or otherwise recover such loss from anyone else who may be held responsible. Alternatively, we may require reimbursement from the insured out of any settlement or judgment that duplicates our payments. These provisions will be applied in accordance with state law. Any insured will sign such papers, and do whatever else is necessary, to transfer these rights to us, and will do nothing to prejudice them."
Thus, the contractual right to which plaintiff claims to have succeeded is stated in the alternative. This right entitles the holder thereof to "sue for or otherwise recover such loss from anyone else who may be held responsible," or "[a]lternatively, * * * require reimbursement from the insured out of any * * * judgment that duplicates * * * [the] payments. * * *"
Upon making payment to its insured, the Porters, Nationwide could elect to seek payment from Associated Paper Stock, Inc., plaintiff's insured, or await reimbursement from the Porters after settlement or judgment. It chose the former, and upon payment to Nationwide by plaintiff the right of subrogation was satisfied and extinguished. Thus, there was nothing to which plaintiff could succeed and nothing which could be assigned to plaintiff by Nationwide as a result of that payment.
In distinction, the contractual condition in Edwards, supra, had never been satisfied and was therefore available to the judgment creditor for assertion. Thus, had plaintiff utilized this procedure, such a credit toward judgment might have been available to it. However, notwithstanding its admission in its memorandum that this case was "one of apparent liability," plaintiff did not pay those expenses until February 17, 1987, some fourteen months after the accident, and then only upon a demand from defendant's insurer. Plaintiff thus forced defendants to seek payment of these bills from its own insurer, a benefit for which they had presumably paid premiums. This coverage was purchased by the defendants for their own benefit, not that of plaintiff. Plaintiff can not now, as a result of its own inaction, claim an inequitable result.
Notwithstanding all of the foregoing, plaintiff was not without a remedy for relief from what it claims is a "duplicate" payment to defendants for these medical bills. As noted in Edwards, supra, the proper procedure would have been to ask by post-judgment motion for a credit toward satisfaction of the judgment. Again, plaintiff failed to use this procedure and satisfied the judgment, in full, on behalf of its insured, on the day the judgment was rendered, thus waiving any claim to a credit. That plaintiff was not a nominal party to the personal injury action is immaterial. By its contract of insurance, it was obligated to defend and indemnify its insured for sums owed by its insured. The payment to Nationwide was on behalf of plaintiff's insured and plaintiff's insured could have asserted the credit, as a party to the action, through the post-judgment-motion procedure noted above.
For the foregoing reasons, the court finds that plaintiff has failed to state a claim in its pleadings upon which relief can be granted and defendants are entitled to a judgment in their favor on those pleadings.
Judgment accordingly.