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Metropolitan Property & Casualty v. Harper6/7/2000
of the Holcombs. We discuss each argument in turn.
An insurer who makes an outright payment to its insured is subrogated to the insured's claims arising from the loss for which payment was made. Furrer v. Yew Creek Logging Co., 206 Or 382, 388, 292 P2d 499 (1956); Growers Refrigeration v. Pacific Electrical, 165 Or App 274, 276, 996 P2d 521 (2000). A subrogated insurer becomes the owner of the claim and the real party in interest in any action to enforce it. Id. The Oregon Rules of Civil Procedure require that " very action shall be prosecuted in the name of the real party in interest." ORCP 26 A. That rule assures a defending party that it will be required to defend against a claim only once. Growers Refrigeration, 165 Or App at 277. Metropolitan asserts that it is not the real party in interest, because its payment to the Holcombs merely constituted a loan and, as such, did not effect a transfer of ownership of the claims against defendants.
An insurer who makes a loan to its insured is not subrogated to the insured's claims because there has been no outright payment that effectively transfers title to the claim from the insured to the insurer. Furrer, 206 Or at 388; Growers Refrigeration, 165 Or App at 276. Thus, a valid loan receipt documents the parties' intent to authorize an insurer to proceed with an action against third parties in the name of the insured where, in fact, the claim still belongs to the insured. See Waterway Terminals, 242 Or at 7.
The receipt in this case provided, in part:
"RELEASE AND SUBROGTATION RECEIPT
"* * * * *
"RECEIVED of the [Metropolitan] * * * the sum of * * * in full payment, release and discharge of all claims and demands of the [Holcombs] against [Metropolitan], arising from or connected with any loss or damage by reason of FIRE which loss or damage arose or occurred on or about the 31ST day of DECEMBER, 1994, and in full payment, release and discharge of all claims and demands against [Metropolitan] * * *.
"In consideration of and to the extent of said payment the [Holcombs] hereby subrogates [Metropolitan], to all of the rights, claims and interest which the undersigned may have against any party, person, persons, property or corporation liable for the loss mentioned above, and authorizes [Metropolitan] to sue, compromise or settle in the [Holcombs'] name or otherwise all such claims and to execute and sign releases and acquittances and endorse checks or drafts given in settlement of such claims in the name of the [Holcombs], with the same force and effect as if the [Holcombs] executed or endorsed them." (Emphasis added.)
We disagree, for two reasons, that the foregoing document suffices to evidence a loan receipt. First, it plainly shows that the parties intended the payment to constitute "full payment " of the Holcombs' claim arising from the fire. The receipt contains no language suggesting that the parties intended a loan repayable only to the extent that the Holcombs obtained a judgment against any party arising from the fire. Second, the receipt expressly subrogated Metropolitan to all of the Holcombs' rights arising from the fire. Although the receipt purported to authorize Metropolitan to "sue" in the Holcombs' names, it did not reserve "ownership" of the claim to the Holcombs. In short, the document did not constitute a loan receipt; it was a receipt for payment of the claim. As a result, Metropolitan became the real party in interest after paying the claim, and the trial court did not err in so concluding. We therefore turn to Metropolitan's argument that the ratification it filed in the trial court pursuant to ORCP 26 A nonetheless authorized it to proceed in t
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