Geico Insurance Company, as subrogee of Ralph Heitkamp v. Dianna Graham
14 N.E.3d 854
| Ind. Ct. App. | 2014Background
- On Oct. 2, 2009, Dianna Graham and Janet Heitkamp were in a car accident in Mishawaka; Janet was insured by GEICO and the insurer paid $7,540.22 and obtained a release with subrogation rights.
- Ralph Heitkamp (insured) sued Graham in St. Joseph County Small Claims (Aug. 2011) seeking his $500 deductible; the small claims court entered judgment for Graham on Oct. 25, 2011.
- GEICO, as subrogee of Heitkamp, filed a separate plenary action in Marion Superior Court (Sept. 26, 2011) seeking the full $7,540.22 it paid.
- GEICO obtained summary judgment in Marion County, but Graham (with counsel) successfully moved under T.R. 60(B)(6) to set aside that judgment; the trial court dismissed GEICO’s claim as barred by res judicata based on the small claims judgment.
- On appeal, the court considered whether Small Claims Rule 11(F) precludes applying res judicata and whether a subrogee insurer is in privity with its insured for claim-preclusion purposes.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a small-claims judgment can preclude a later plenary subrogation suit (issue vs. claim preclusion) | GEICO: Small Claims Rule 11(F) prevents a small-claims judgment from being treated as an adjudication of facts in another court (so res judicata should not bar GEICO) | Graham: Small Claims Rule 11(F) bars issue preclusion but does not prevent claim preclusion when the later suit is the same claim | Held: Rule 11(F) bars issue preclusion but does not bar claim preclusion; claim preclusion applies here because GEICO’s claim is the same as the insured’s claim. |
| Whether GEICO, as subrogee, is in privity with the insured so claim preclusion binds GEICO | GEICO: It was not party to the small-claims action and not in privity; Moreton/Chemco suggest insurer may not be bound where it lacked notice or control | Graham: As subrogee GEICO stands in insured’s shoes and was in privity; insured’s prior loss precludes relitigation by subrogee | Held: A subrogee insurer is generally in privity with the insured for subrogated claims; GEICO was in privity and thus bound by the small-claims judgment. |
| Whether factual distinctions (notice/control/partial compensation) from Chemco and Moreton avoid preclusion | GEICO: Cases where insurer lacked notice or ability to control the insured’s action (or insurer only partially compensated) show insurer should not be bound | Graham: Here insurer had contractual subrogation rights and notice of the small-claims suit; insured’s release and policy limited insured’s ability to undermine subrogation | Held: Chemco and Moreton are distinguishable—those cases involved lack of notice/control or partial compensation; GEICO had contractual mechanisms and notice, so claim preclusion applies. |
Key Cases Cited
- In re Ault, 728 N.E.2d 869 (Ind. 2000) (interpreting Small Claims Rule 11(F) to limit issue preclusion but not necessarily claim preclusion)
- Angelopoulos v. Angelopoulos, 2 N.E.3d 688 (Ind. Ct. App. 2013) (summary of res judicata branches: claim preclusion and issue preclusion)
- Erie Ins. Co. v. George, 681 N.E.2d 183 (Ind. 1997) (subrogation doctrine: subrogee takes no greater rights than subrogor)
- Chemco Transp., Inc. v. Conn, 527 N.E.2d 179 (Ind. 1988) (insurer’s settlement without insured’s knowledge/control may not bind insured)
- Moreton v. Auto-Owners Ins. Co., 859 N.E.2d 1252 (Ind. Ct. App. 2007) (insurer not bound by small-claims judgment where insurer lacked notice and control)