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Wilson v. Educators Mutual Insurance Association

Supreme Court of Utah

September 28, 2017

Everett P. Wilson Jr. and Darla Wilson, Respondents,
v.
Educators Mutual Insurance Association, Petitioner.

         On Certiorari to the Utah Court of Appeals Fourth District, Provo The Honorable Samuel D. McVey No. 110400083

          Randall R. Smart, Jeffrey A. Callister, Chad P. Curtis, Salt Lake City, for petitioner

          Jack C. Helgesen, Craig Helgesen, Layton, for respondents

          Thomas M. Regan, Leslie A. Hulburt, San Diego, California, for amicus curiae

          Associate Chief Justice Lee authored the opinion of the Court, in which Chief Justice Durrant, Justice Durham, Justice Himonas, and Justice Pearce joined.

          OPINION

          LEE, ASSOCIATE CHIEF JUSTICE

         ¶ 1 In this case we consider a subrogation action filed by Educators Mutual Insurance Association (EMIA) against a tortfeasor in a personal injury case. The court of appeals dismissed for lack of standing. It held that an insurer may sue for subrogation only in the name of its insured, not in its own name. We reverse on the basis of the terms of the insurance policy in question, which expressly recognize EMIA's authority "to pursue its own right of Subrogation against a third party" without regard to whether the insured "is made whole by any recovery."

         I

         ¶ 2 This case arises out of a tragic accident. On September 19, 2010, Jessica Wilson was hit by a car while crossing the street. She died within hours of the accident, after incurring more than $100, 000 in medical expenses. Her insurance provider, EMIA, covered $78, 692.34 of those expenses.

         ¶ 3 Four months later Wilson's parents brought a wrongful death claim against the driver. The parties agreed to settle the case. The Wilsons agreed to dismiss their claims against the driver in exchange for payment of his insurance policy limits ($100, 000).

         ¶ 4 Before the settlement became final, EMIA brought a separate subrogation suit in its own name against the driver for the medical expenses it paid on the decedent's behalf. Recognizing the competing claims in the two cases, all parties agreed to consolidate them. The driver's insurer subsequently interpleaded the $100, 000 policy limits. But EMIA and the Wilsons disputed how to allocate the funds.

         ¶ 5 Following a hearing on that issue, the district court awarded $24, 182.31 of the interpleaded funds to EMIA and the remaining $75, 817.69 to the Wilsons. Both parties appealed the allocation. The Wilsons claimed that EMIA was not entitled to any of the interpleaded funds. EMIA countered that it was entitled to a full reimbursement of the coverage it provided for the decedent.

         ¶ 6 The court of appeals dismissed EMIA's case on standing grounds. It found no basis in the Utah code or in our case law for an "independent right . . . for an insurer to seek subrogated damages in its own name." Wilson v. Educators Mut. Ins. Ass'n, 2016 UT App 38, ¶ 8, 368 P.3d 471. First, it noted that Utah Code section 31A-21-108 provides only that "[s]ubrogation actions may be brought by the insurer in the name of its insured." Id. Second, it cited our decision in Johanson v. Cudahy Packing Co., 152 P.2d 98 (Utah 1944), for the proposition that "'it has been generally held that a suit at law to enforce [a] right of subrogation must, at common law, be brought in the name of the insured, rather than by the insurance company in its own name and right.'" 2016 UT App 38, ¶ 10 (quoting Johanson, 152 P.2d at 104)).

         ¶ 7 We agreed to hear the case on EMIA's petition for writ of certiorari. And we review the court of appeals' decision de novo. State ...


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