Dakota County District Court File No. C0-01-9143
Considered and decided by Randall Presiding Judge, Schumacher Judge, and
When a victim's underinsured motorist insurer has not notified an underinsured tortfeasor of the insurer's intent to exercise its subrogation right before the tortfeasor files a satisfaction of judgment, that satisfaction of judgment defeats the insurer's subrogation right.
The opinion of the court was delivered by: Harten, Judge.
Respondent insurer brought this subrogation action against appellant, an underinsured tortfeasor, to obtain reimbursement of the underinsured benefits respondent had paid to its insured. The parties brought cross-motions for summary judgment. The district court granted respondent's motion and denied appellant's motion. Because we conclude that respondent was not entitled to bring a subrogation action, we reverse the summary judgment and remand for dismissal.
Appellant Stephanie Nash injured Catherine Walker-Owusu (Owusu*fn1), an insured of respondent Illinois Farmers Insurance Co., in an automobile accident. Owusu brought an action against appellant. Although Owusu served a Malmin*fn2 notice of the action on respondent, respondent chose not to intervene.
In December 2000, the district court entered judgment for $62,496 in favor of Owusu against appellant. Because appellant's policy limit was $50,000, respondent paid Owusu the remaining $12,496 of the judgment in underinsured motorist's benefits. In April 2001, Owusu executed and appellant filed a satisfaction of judgment. In May 2001, respondent's attorney wrote appellant's attorney:
Please accept this letter as notification that [respondent,] as the underinsured motorist carrier, has a * * * right for expenses paid in this matter. Accordingly, [respondent] requests reimbursement in the amount of $12,496.00 from [appellant].
Appellant declined to reimburse respondent, and respondent brought this subrogation action against appellant.
1. When appellant filed the satisfaction of judgment, had appellant received notice from respondent that respondent intended ...