Carver v. Mills

HEDRICK, Judge. The single question to be determined on this appeal is: Whether, under the terms of the insurance policy issued to *747 plaintiff, the respondent insurance company is entitled to be subrogated to the rights of plaintiff in the sum of $1,000.00, which sum represents the payment made to plaintiff pursuant to the medical payments provision of the policy. Respondent insurance company contends that the unambiguous language of the policy, plus the language of the “loan receipt agreement”, clearly exemplify the fact that respondent is entitled to recoup the $1,000 payment. Conversely, plaintiff asserts that the trial judge correctly construed the language of the insurance contract in awarding plaintiff the $1,000.00 and to do otherwise would be to do violence to the avowed public policy against the assignment of claims. A careful examination of the terms of the policy discloses the following provisions which are relevant to our determination of the question presented: “4. Subrogation. Upon payment under this policy, except under coverages C, M, S, and T, the company shall be subrogated to all the insured’s rights of recovery thereof and the insured shall do whatever is necessary to secure such rights and do nothing to prejudice them. “Upon payment under coverages C and M of this policy the company shall be subrogated to the extent of such payment to the proceeds of any settlement or judgment that may result from the exercise of any rights of recovery which the injured person or anyone receiving such payment may have against any person or organization and such person shall execute and deliver instrument and papers and do whatever else is necessary to secure such rights. Such person shall do nothing after loss to prejudice such rights. “5. Trust Agreement — Coverages C, M, and U. In the event of payment to any person under coverage C, M or U: (a) the company shall be entitled to the extent of such payment to the proceeds of any settlement or judgment that may result from the exercise of any rights of recovery of such person against any person or organization because of the damages which are the subject of claim made under the coverages;” The above quoted provisions distinctly delineate the respondent insurance company’s right to subrogation when medical *748 payments are made to the insured pursuant to Coverage C of the policy. See, 4 Strong, N. C. Index 2d, Insurance, § 6, p. 461. Furthermore, the respondent insurance company’s position is bolstered by making reference to the written agreement between the insurer and insured which is entitled “Loan Receipt Under Medical Payments Coverage”. This paper writing states in pertinent part: “The undersigned hereby acknowledges receipt from the State Farm Mutual Automobile Insurance Company of the sum of $1,000.00 (One Thousand and No/100) as a loan without interest under Policy No. 1844593B2242A repayable only in the event and to the extent that any net recovery is made by the undersigned from any person or persons, corporation or corporations, or other parties, on account of personal injuries sustained in an accident which occurred on or about the 24 day of Jan., 1970 . . . . ” Thus, the insurance company having paid $1,000.00 to the insured under Coverage C (the medical payments coverage) of the policy and the insured having obtained a recovery of $9,000.00 by way of a consent judgment, it follows under the provisions of the insurance contract stated supra that the respondent insurance company is entitled to be subrogated to the extent of $1,000.00. In arriving at this decision, we necessarily reject plaintiff’s contention that the subrogation provision in the policy is tantamount to an assignment of a personal injury claim and as such is void as against public policy. The facts of this case plainly disclose that the respondent insurance company is simply attempting to recover a payment made in accordance with the terms of the policy. An attempt to designate this as constituting an assignment of a claim is feckless. See, Wilson v. Tennessee Farmers Mutual Insurance Company, 219 Tenn. 560, 411 S.W. 2d 699 (1966), where it is said: “Subrogation means substitution, not assignment or transfer. Subrogation operates only to secure contribution and indemnity; whereas, an assignment transfers the whole claim.... “ * * * Generally, parties may contract as they wish and we cannot see that it is against public policy for the parties to contract for subrogation of medical payments. *749 To hold otherwise would permit an injured plaintiff to recover twice for the same medical expenses. This should not be permitted.” The judgment of the trial court is Reversed. Judges Campbell and Parker concur.