Isidro Frederick BOSCH a/k/a Frederick Bosch v. Anna Bigner CUMMINGS, State Farm Mutual Automobile Insurance Company. Connie L. Scott, and United States Fidelity and Guaranty Company. Sentry Indemnity Company.
No. 87-C-2020
Supreme Court of Louisiana
February 29, 1988
520 So.2d 721
Charles A. Verderame, Giraud, Cusimano & Verderame, Melanee A. Gaudin, Deutsch, Kerrigan & Stiles, New Orleans, William D. O‘Regan, III, La Place, Stephen N. Elliott, Alison E. Roberts, Bernаrd, Cassisa, Saporito & Elliott, Metairie, for respondents.
DENNIS, Justice.
In this case we are once again called upon to decide whether an uninsured motorist insurance carrier may аssert any right of action against an insured‘s tortfeasor other than the right the carrier may acquire by subrogation from the insured. The court of appеal decided that the carrier ipso facto has a right of action against the tortfeasor independent of any right the carrier could hаve acquired by subrogation from its insured. Bosch v. Cummings, 510 So.2d 31 (La.App. 5th Cir.1987). We reverse. The court of appeal decision conflicts with the decisions of this court in Pace v. Cage, 419 So.2d 443 (La.1982), Bond v. Commercial Union Assurance Co., 407 So.2d 401 (La.1981), and Niemann v. Travelers Insurance Co., 368 So.2d 1003 (La.1979). An uninsured motorist insuranсe carrier does not acquire any right against a tortfeasor merely because the latter has committed an offense or quasi-offense against the carrier‘s insured. The uninsured motorist insurance statute does not grant or permit the UM carrier to have an independent right of action against the tortfeasor. When the carrier makes payment under its policy to its insured the carrier becomes subrogated, in the measure of what it has paid, to the insured‘s right of action against the tortfeasor. Accordingly, if the insured has already discharged the tortfeasor from his obligation by entering a compromise with him, the carrier cannot acquire the insured‘s right against the tortfeasor because it no longer exists.
Facts
Plaintiff, Isidro Frederick Bosch, was involved in a chain collision accident in which the automobile he was driving was struck from the rear by an automobile being driven by the defendant, Anna Bigner Cummings. Mr. Bosch filed suit against Cummings, her liability insurer, State Farm, and his own UM insurer, Sentry Indemnity. Sentry Indemnity filed a cross-claim against Ms. Cummings for reimbursement of any sums disbursed by Sentry to Mr. Bosch pursuant to thе UM policy. Before
Legal Precepts
The object of the uninsured motorist statute is to promote full recovery for damages by innocent automobile accident victims by making uninsured motorist coverage available for their benefit as primary protection when the tortfeasor is without insurance and as additional оr excess coverage when he is inadequately insured.
However, when the uninsured motorist insurer makes payment under its policy to its insured the carrier may become subrogated, under the general civil code articles on subrogation, in the measure of what it has paid, to the insured‘s right against the tortfeasor and his insurer, because this construction of the statute best conforms to the purpose of the law. Bond, supra, at 409-411. Under these precepts, the uninsured motorist carrier who pays all of its insured‘s damages is completely subrogated to his claim against the uninsured or underinsured tortfeasor, but when he pays for only part of the damages sustained, the insurer receives a partial, subordinate subrogation.* Bond, supra, at 411;
Precepts Applied
Applying the foregoing precepts, we сonclude that the uninsured motorist insurance carrier in this case acquired no right of action against the underinsured motorist tortfeasor or her liability insurer. First, the uninsured motorist insurance statute does not permit the carrier to acquire or have any right against the tortfeasor except the right the carrier may obtain from its insured upon payment under the UM policy. Second, when the carrier in this case paid its insured the insured had already dischargеd the tortfeasor and her insurer by entering a transaction or compromise. Consequently, the carrier did not obtain any right against the third parties. As notеd by Planiol, derivation is the essence of subrogation: “Once payment is effected it is impossible for the creditor to transmit to the third party an action he no longer has, which has definitely been extinguished by the receipt of payment.” 2 M. Planiol, Civil Law Treatise pt. 1 no. 480; also nos. 477, 478 (11th ed. La.St.L.Inst. trans. 1959); 4 C. Aubry & C. Rau, Droit Civil Frаncais § 321 (6th ed. Bartin) in A. Yiannopoulos, 1 Civil Law Translations 187-188, 190 (1965).
Conclusion
The judgment of the court of appeal is reversed and the judgment of the trial court is reinstated. Moncrief v. Panepinto, 489 So.2d 938 (La.App. 5th Cir.1986), whiсh is also contrary to our holding, is overruled. All costs of court are assessed to respondents.
REVERSED; TRIAL COURT JUDGMENT REINSTATED.