Allstate Insurance Co. v. Ivie

CROCKETT, Chief Justice

(supplemental dissent):

I join in Justice Hall’s dissent and would affirm the decision of the trial court.

The main objective of insurance is to provide a fair and honest recoupment of losses suffered, and not to provide a basis for parlaying the loss into a double recovery for all or part of the damages thus suffered.

The purpose of the No-Fault Insurance Act is to effectuate a more efficient method of handling minor claims arising from automobile accidents which do not involve great amounts of damages; and to provide a means for the prompt payment of certain minimal losses without regard to fault and thus without litigation, in order to effectuate certain savings in the rising costs of automobile accident insurance.1 It should be realized that if the double recovery per*1206mitted by the main opinion is allowed, it could not do other than increase, rather than decrease, the total costs of insurance.

It requires little reflection to see that the majority decision results in an injustice to defendant Travelers. In treating a similar situation in the case of Transamerica Ins. Co. v. Barnes,2 this Court stated that “If the settlement were intended to include plaintiff’s prior medical expenses, two drafts should have been issued, one to plaintiff and defendant jointly and one to defendant alone.”3 That is the exact procedure followed by Travelers in this instance. It cannot fairly be questioned that the negotiations between Mrs. Ivie and Travelers were made in awareness that Travelers was obligated to reimburse Allstate for the $7,394 PIP payments which Mrs. Ivie had already received; nor that she agreed to accept $44,000 from Travelers to discharge its total liability. This is confirmed by two facts: first, Travelers’ policy limit was $50,-000; and it would make no sense to agree to pay $44,000, plus the obligation to reimburse Allstate for the $7,394 PIP payments, which would thus exceed Travelers’ policy limits. Second, by the fact that Travelers issued the two separate drafts, one for the $7,394 payable to Allstate and Mrs. Ivie and the other for $36,606 to Mrs. Ivie, just as this Court directed in the Barnes case, supra.

Under the facts as they appear in this case, it is discordant to my ideas of law and justice to require Travelers to pay the $44,-000 to satisfy the claims of Mrs. Ivie and of Allstate, then also be required to pay the $7,394 to Allstate to reimburse it for that portion Allstate had already paid of Mrs. Ivie’s damages. That plainly and simply results in injustice: it increases Travelers’ obligation by $7,394 more than it agreed to pay; and it allows Mrs. Ivie double recovery by awarding her that much more than she had agreed to accept.

There would seem to be no problem with the proposition espoused in the main opinion if the facts had been different. If the parties had negotiated their settlement with an understanding that Travelers was to reimburse Allstate for the PIP benefits it had paid, and that any settlement arrived at was in addition thereto, no unfairness or injustice would result. But that does not appear to be the facts here. If such an understanding is to be the condition of negotiations, it should be so understood by the parties, and effective on only a prospective basis by applying the “Sunburst Doctrine,” referred to by Justice Hall.

HALL, J., also concurs in the supplemental dissent of CROCKETT, C. J.

. See statements in Sec. 31 — 41-2, U.C.A.1953.

. 29 Utah 2d, 101, 505 P.2d 783 (1972).

. Id. at 787.