 |
 |
to fill out a simple form to connect to Personal Injury Lawyers in your area.
|
|
|
|
|
Youngblood v. American States Ins. Co.12/14/1993
e insurance contract requires American States to pay whatever damages are required in Montana; that is, the contract is to be performed in Montana. Therefore, unless a contract term provides otherwise, Kemp and § 28-3-102, MCA, require the application of Montana law because the contract was to be "performed" in Montana. In this case, however, the insurance contract contains a choice of law provision which requires the application of Oregon subrogation law. In pertinent part, that provision provides as follows:
Reimbursement and Trust Agreement. In the event of payment to any person of any benefits under this endorsement:
(a) the Company shall be entitled to reimbursement or subrogation in accordance with the provisions of ORS 743.825, ORS 743.830, or Section 8 of Chapter 784 Laws, 1975; . . .
We have previously held that, if a contract's terms are clear and unambiguous, the contract language will be enforced. Keller v. Dooling (1991), 248 Mont. 535, 539, 813 P.2d 437, 440; Section 28-3-401, MCA. The only exception to enforcing an unambiguous contract term is if that term violates public policy or is against good morals. Steinke v. Boeing Co. (D. Mont. 1981), 525 F. Supp. 234, 236. Here, the insurance contract clearly provides for subrogation pursuant to Oregon law, and expresses the intention of the parties to apply Oregon law no matter where the accident occurred or where the contract is to be performed. Therefore, the choice of law provision will be enforced unless enforcement of the contract provision requiring application of Oregon law as regards subrogation of medical payments violates Montana's public policy or is against good morals. We must, therefore, analyze whether the Oregon law subrogation provision violates Montana's public policy or is against good morals.
II — VIOLATION OF PUBLIC POLICY
Mary Ann contends that the subrogation clause at issue is not enforceable in Montana because it violates public policy — a rule which has been adopted and discussed in prior case law. We agree, although some further discussion and clarification of that case law is necessary.
Subrogation is an equitable doctrine which is not dependent on any contractual relationship between the parties and is not dependent on privity. Bower v. Tebbs (1957), 132 Mont. 146, 155, 314 P.2d 731, 736. The purpose of subrogation is to prevent injustice by "compel[ling] the ultimate payment of a debt by one who, in justice, equity, and good conscience, should pay it. It is an appropriate means of preventing unjust enrichment." Bower, 314 P.2d at 736.
Our past decisions have, on occasion, confused subrogation with assignment; however, there is an important legal distinction between the two concepts.
Subrogation is the substitution of another person in the place of the creditor, so that the person substituted will succeed to the rights of the creditor in relation to the debt or claim, and is an act of the law growing out of the relation of the parties to the original contract of insurance, and the natural justice or equities arising from the fact that the insurer has paid the insured, rather than a right depending upon the contract. On the other hand, an assignment of a right or claim is the act of the parties to the assignment, dependent upon actual intention, and necessarily contemplating the continued existence of the debt or claim, the whole of which is assigned.
When there is an assignment of an entire claim there is a complete divestment of all rights from the assignor and a vesting of those same rights in the assignee. In the case of subrogation, however, only an equitable right passes
Page 1 2 3 4 5 Montana Personal Injury Attorneys
Personal Injury Lawyers
|
| |
to fill out a simple form to connect to Personal Injury Lawyers in your area.
|
|