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Savage Arms3/2/2001
preme Court case, State ex rel. Nawd's T.V. & Appliance Inc. v. District Court, in determining the proper procedural treatment of insurers. The plaintiffs in Nawd's T.V. had received varying levels of compensation from their partly and fully subrogated insurers. Although the court held that partially subrogated insurers could opt for ratification rather than substitution or joinder, it effectively upheld a lower court's ruling requiring substitution of fully subrogated insurers.
Critical commentary bears out the significance of this distinction:
The general rule in the federal courts is that if the insurer has paid the entire claim, it is the real party in interest and must sue in its own name. If no money or enforceable promise to pay money has been advanced, then there has not been any subrogation and the insured remains the real party in interest. This seems sound since it is logical that an insured who has no interest in the outcome of the litigation may not bring suit.[ ]
We find this reasoning persuasive, and conclude that it was error not to require the insurers to substitute for their insured.
IV. CONCLUSION
We REVERSE the order denying Savage Arms' motion to require Western Auto's insurers to substitute for Western Auto, VACATE the orders imposing successor liability on Savage Arms, and REMAND for application of the doctrines adopted today and for further proceedings.
On consideration of Savage Arms' Petition for Rehearing and Western Auto's response to the petition,
It is Ordered:
1. The Petition for Rehearing is Granted with respect to the hearsay issue. The petition is denied with respect to the issue of continuity of enterprise.
2. Opinion No. 5293, issued on June 30, 2000, is Withdrawn.
3. Opinion No. 5370, is issued on this date in its place.
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