Below is a case brief of an appeal to the PA Superior Court, wherein Weltman, Weinberg & Reis Co., LPA was entered as Counsel for Appellant, State Farm Mutual Auto Ins. Co.
As determined by the Superior Court, Pa.R.C.P. 1020 should not operate so to require subrogation claims to be brought within the Plaintiff/Insured’s personal injury action.
State Farm Mutual Auto Ins. Co. v. Ware’s Van Storage, et al., 953 A.2d 568 (Pa. Super. 2008)
FACTS
On June 22, 2005 a Motor Vehicle Accident (MVA) occurred between motor vehicles operated by George Hay and Wilson Rodriguez respectively. Said accident resulted in Personal Injuries and Property Damage.
On October 4, 2006, George Hay, filed an action against Ware’s Van Storage and Wilson Rodriguez, alleging negligence and seeking recovery for Personal Injuries. Hay did not seek recovery for property damage.
On May 2, 2007, State Farm Mutual Auto Ins. Co. filed a separate action against the same Defendants, also alleging negligence. State Farm only sought to recover property damage monies paid on behalf of their Insured, George Hay, pursuant to a policy of motor vehicle insurance. State Farm did not seek recovery for Hay’s injuries or most notably for Hay’s deductible.
Both matters were filed in the Allegheny County Court of Common Pleas.
PROCEDURE
On June 19, 2007, Defendants filed Preliminary Objections, arguing the State Farm Action was barred under Pa.R.C.P. 1020. The Allegheny County Court of Common Pleas granted Defendant’s Preliminary Objections and issued an Order dismissing State Farm’s Subrogation Action.
State Farm appealed the Order to the Superior Court of Pennsylvania.
ISSUE
Do the Hay and State Farm actions possess a “unity and identity of interests”, thus requiring that the claims be brought in the same action and therefore bar State Farm’s claim since it was filed second in time?
HOLDING
Superior Court overturned the Common Pleas Court Order. State Farm’s Subrogation Action is reinstated.
ANALYSIS
Pursuant to Pa.R.C.P. 2227, multiple Plaintiffs’ may be required to join claims, when without such joinder an indispensable party is missing and the action cannot proceed. Kelly v. Carborundum Co., 453 A.2d 624 (Pa. Super. 1982). Said Rule is designed to achieve a “unity and identity of interests”. Polydyne, Inc. v. City of Phila., 795 A.2d 495 (Pa. Cmwlth. 2002).
State Farm has no interest in the Insured’s Personal Injury Action, and similarly (after the Insured’s property damage is reimbursed by State Farm) the Insured has no interest in pursuing a property damage claim.
State Farm’s right to subrogate is a derivative claim (as are all subrogation claims) of their Insured, and can only be brought when their Insured has a legal cause of action. The Court goes on to recognize that the derivative nature of State Farms claim may establish a “unity and identity of interests”, however, once State Farm reimburses their Insured for the property damage the interest in each others claim is dissolved.
The Superior Court specifically makes note of the Pennsylvania Supreme Court decision in Spinelli v. Maxwell, 243 A.2d 425 (Pa. 1968). The Insurance Carrier filed a Subrogation Claim and at the request of their Insured also sought recovery of the Insured’s deductible. Later, the Insured filed a Personal Injury action. The Court held that a “unity and identity of interests” existed in the Subrogation Action since the Insurance Carrier represented the Insured’s interests. Thus, the Court barred the Insured’s later Personal Injury Action. The Superior Court notes that the instant action is distinguished from Spinelli in that State Farm did not seek to recover the Insured’s deducible and thus can not be said to have acted on the Insured’s behalf. Such act would create a “unity and identity of interests.”