Armstrong v. Miss. Farm Bureau Casualty Ins. Co.
| Docket Number: | 2010-CA-00041-COA Linked Case(s): 2010-CA-00041-COA ; 2010-CT-00041-SCT |
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| Court of Appeals: |
Opinion Link Opinion Date: 01-11-2011 Opinion Author: Griffis, J. Holding: Affirmed in part, reversed and remanded in part. |
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| Additional Case Information: |
Topic: Insurance - Contractual subrogation - "Made whole" rule - Collateral estoppel - Waiver Judge(s) Concurring: King, C.J., Lee, P.J., Myers, P.J., Irving, Barnes, Ishee, Roberts and Maxwell, JJ. Dissenting Author : Carlton, J. Procedural History: Summary Judgment Nature of the Case: CIVIL - INSURANCE |
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| Trial Court: |
Date of Trial Judgment: 12-28-2009 Appealed from: Alcorn County Circuit Court Judge: Paul S. Funderburk Disposition: Granted the Plaintiff/Appellee's Motion for Summary Judgment and Denied the Defendants/Appellants' Motion for Summary Judgment. Case Number: CV-09-134 FA |
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| Party Name: | Attorney Name: | Brief(s) Available: | ||
| Appellant: | Barbara Armstrong and Robert M. Hill |
JAMES E. PRICE JR. |
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| Appellee: | Mississippi Farm Bureau Casualty Insurance | H. SCOT SPRAGINS | ||
Synopsis provided by:  If you are interested in subscribing to the weekly synopses of all Mississippi Supreme Court and Court of Appeals hand downs please contact Tammy Upton in the MLI Press office. |
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| Topic: | Insurance - Contractual subrogation - "Made whole" rule - Collateral estoppel - Waiver |
| Summary of the Facts: | Mississippi Farm Bureau Casualty Insurance Company sued to recover payments made to Barbara Armstrong and Robert Hill to cover medical expenses resulting from an automobile accident. The circuit court granted summary judgment to Farm Bureau. Armstrong and Hill appeal. |
| Summary of Opinion Analysis: | Armstrong and Hill argue that they should not be required to pay the subrogation lien to Farm Bureau because the judgment they received in their lawsuit against another person was inadequate to make them whole. In other words, they assert that their true damages were greater than the amount of the judgment, and under Mississippi law, until they are fully compensated for their injuries, they cannot be required to reimburse Farm Bureau. When an insurer makes payments to an insured to cover a loss and the insured has a claim against a third party to recover for that same loss, the insurer steps into the shoes of the insured and acquires the right to recover from that third party the amount paid to the insured. Here, Armstrong’s insurance policy granted Farm Bureau a right to contractual subrogation. The policy provided that Farm Bureau could recover from the third party, or if Armstrong recovered from the third party, she would have to hold the proceeds in trust and repay Farm Bureau. If this contract provision is given force, Farm Bureau prevails. However, Mississippi has adopted the “made whole” rule. Under this rule, an insurer cannot recover subrogation until the insured has been fully compensated for his losses. An insurance policy cannot override this rule by contract. In cases like this one, a judgment obtained against a tortfeasor conclusively makes the insured whole. An insured's argument that it was not made whole by the amount of a court judgment has been rejected by several courts which have concluded that a jury verdict constitutes full recovery for purposes of determining whether an insurer is entitled to subrogation. Armstrong’s and Hill’s damages were actually litigated and decided. After hearing all of the evidence and being given those instructions, the jury returned verdicts of $4,411 for Armstrong and $3,735.30 for Hill. The jury determined these were the amounts necessary to make them whole. Armstrong and Hill are collaterally estopped from attacking that judgment in the present case. Therefore, Armstrong and Hill were made whole as a matter of law, and this defense to Farm Bureau’s subrogation claim fails. Armstrong and Hill also argue that Farm Bureau waived its right to recover subrogation from them by its conduct over the two years following the accident. A waiver is the voluntary and intentional relinquishment of a known right or conduct which implies the voluntary and intentional relinquishment of a known right. Since the right of subrogation arises for the benefit of the insurer, it may waive its right to subrogation, either by contract or by conduct inconsistent with the right of subrogation, and the waiver may be either express or implied. Waiver is a fact question for the jury, unless the evidence is so clear that reasonable minds could not differ. Armstrong and Hill came forward with enough evidence to survive summary judgment on this issue. Because this issue raises a genuine issue of material fact, the case is reversed and remanded on this issue. |
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