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Miller v. Ellis10/31/2002
to this case. Miller's rights against Ellis are completely independent of any rights the insurance company itself may have had to recover against Ellis. They are instead dependent on whether it would be equitable to allow Miller to recover amounts which he never was required to pay, and in fact never did pay. To permit Miller now to recover from Ellis half of what the insurer paid to Fay on Miller's behalf would effectively permit Miller to profit from his own malpractice, contrary to the equitable principles underlying both the remedy of indemnity and the collateral source rule.
In sum, we conclude the trial court erred as a matter of law in applying the doctrine of equitable indemnification and the collateral source rule to enter judgment in Miller's favor against Ellis for 50 percent of the $75,000 total paid by Miller's insurance company to Fay. Miller was not an injured party in this case; he was a co-tortfeasor, equally responsible for the malpractice which caused Fay injury and resulted in the insurance carrier's settlement payment to Fay on Miller's behalf. Permitting Miller to obtain "reimbursement" from Ellis for sums he never paid himself would result in unjust enrichment, contrary to the principles of fairness and equity underlying the doctrine of indemnification. Moreover, because Miller was not in any way an "injured party," the collateral source rule was unavailable to permit him to recover from Ellis despite the payment by his insurance company of his own liability to Fay. Nevertheless, because Ellis was effectively a beneficiary of Miller's malpractice insurance, the insurer's defense of Fay's legal action against them both, and the settlement agreement and global release, Miller is entitled to equitable indemnification from Ellis of 50 percent of the $5,000 deductible Miller paid out-of-pocket for this defense, or $2,500.
Disposition
The judgment in favor of Miller against Ellis is reversed and remanded for entry of a revised judgment, pursuant to which Ellis shall be ordered to pay Miller the total sum of $2,500. Each party shall bear his own costs on this appeal.
We concur:
Corrigan, J.
Parrilli, J.
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