Liberty Mutual Insurance v. Whitaker

128 S.W.3d 473, 83 Ark. App. 412, 2003 Ark. App. LEXIS 826
CourtCourt of Appeals of Arkansas
DecidedNovember 12, 2003
DocketCA 03-304
StatusPublished
Cited by3 cases

This text of 128 S.W.3d 473 (Liberty Mutual Insurance v. Whitaker) is published on Counsel Stack Legal Research, covering Court of Appeals of Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Liberty Mutual Insurance v. Whitaker, 128 S.W.3d 473, 83 Ark. App. 412, 2003 Ark. App. LEXIS 826 (Ark. Ct. App. 2003).

Opinion

Layton Roaf, Judge.

Appellant Liberty Mutual Insurance Company (“Liberty Mutual”) appeals from the trial court’s grant of summary júdgment to appellee Donald Whitaker. The trial court found that Liberty Mutual was not entitled to pursue its subrogation interest against Whitaker and recover workers’ compensation benefits it paid to its insured as a result of a motor-vehicle accident caused by Whitaker’s negligence. On appeal, Liberty Mutual argues that the trial court erred in granting summary judgment to Whitaker. We agree, and reverse and remand.

This lawsuit arises from a motor-vehicle accident involving Rose LaFountaine-Glover (“Glover”) and Whitaker on April 14, 1999, in which Whitaker’s vehicle crossed the center line and struck the front of Glover’s vehicle. Glover sustained injuries and incurred other damages as a result of the accident. At the time of the accident, Glover was acting within the course and scope of her employment with TCBY Systems, Inc., of Little Rock (“TCBY”). Appellant Liberty Mutual is the workers’ compensation carrier for TCBY, and it accepted Glover’s injuries as com-pensable, paying workers’ compensation benefits in the amount of $14,370.31 to Glover.

On March 15, 2000, Glover filed a lawsuit against Whitaker, seeking damages resulting from the motor-vehicle accident. Southern Farm Bureau (“Southern Farm”), Whitaker’s liability insurance carrier, acting on behalf of its insured, entered into a settlement agreement with Glover two days later, on March 17, 2000. In exchange for payment of $45,000, Glover signed a release agreement in favor of Whitaker and Southern Farm. The agreement provided that Whitaker and Southern Farm were released from “any and all claims” on account of or in “any way growing out of the injuries sustained by” Glover in the accident. The settlement agreement was not approved by a court or the Workers’ Compensation Commission. An order was entered on March 31, 2000, dismissing Glover’s complaint with prejudice.

On February 4, 2002, Liberty Mutual filed suit against Glover and Whitaker, jointly and severally, seeking to recover the workers’ compensation benefits it had paid to Glover. Liberty Mutual’s complaint was based on the subrogation provisions of Ark. Code Ann. § 11-9-410 (Repl. 2002), as well as the theories of negligence, unjust enrichment, and restitution.

Whitaker subsequently filed a motion for summary judgment, alleging that Liberty Mutual could not recover from him as a matter of law. Whitaker alleged that he had nothing to do with the settlement agreement, which was procured by his insurance company, and that Liberty Mutual’s claim for a subrogation lien did not state a cause of action against him because he never had control of the funds. Whitaker also asserted that Liberty Mutual’s claim against him was barred by the release signed by Glover and that its claim for unjust enrichment and restitution did not state a cause of action against him because he never had possession of the settlement funds. Whitaker attached the affidavit of Southern Farm’s insurance adjuster, who stated that Southern Farm never had any notice of Liberty Mutual’s purported lien and that Whitaker had no control over the settlement or custody of the funds.

In its response to Whitaker’s motion for summary judgment, Liberty Mutual argued that it was entitled to a subrogation lien on the proceeds of the settlement agreement under section 11-9-410 and that Whitaker and Glover had violated the requirements of that statute by not giving it notice of the settlement and by not having the settlement approved by a court or the Commission. Liberty Mutual also argued that the release by Glover did not preclude it from pursuing judgment against Whitaker because the release did not address its subrogation rights. In addition, Liberty Mutual stated that it had a valid cause of action for unjust enrichment and restitution against Whitaker. It attached the affidavit of its claims manager, Kris Opal, who stated that Liberty Mutual had sent a letter to Whitaker on October 25, 1999, notifying him that it had paid benefits to Glover and that it was entitled to a subrogation lien to recover such payments. Opal also stated that Liberty Mutual received no notice that a lawsuit was filed or that a settlement agreement was reached until after March 17, 2000.

After a hearing, the trial court found that Liberty Mutual failed to protect its own interests by failing to give notice of its lien to Southern Farm and that notice to Whitaker was not adequate. The trial court stated that Southern Farm had procured a full, final, and complete release in favor of Whitaker, without notice of any lien by Liberty Mutual, and that Whitaker was not subject to suit for the lien because he had been fully and properly released by Glover. The trial court granted partial summary judgment to Whitaker, stating that Liberty Mutual’s claims against Glover were not affected by the order. Liberty Mutual then moved to have its claims against Glover dismissed without prejudice, which was granted by the trial court. Liberty Mutual now appeals from the trial court’s grant of summary judgment to Whitaker.

Liberty Mutual argues two main points on appeal: (1) that the trial court misapplied and incorrectly interpreted Ark. Code Ann. § 11-9-410 by ruling that Liberty Mutual was required to give notice of its lien to Whitaker’s insurer in order to protect the lien; and (2) that the trial court erred by ruling that the release procured by Whitaker without the knowledge or consent of Liberty Mutual prohibits Liberty Mutual from pursuing its right of subrogation against him. More specifically, Liberty Mutual asserts that Glover and Whitaker, along with Whitaker’s insurer, failed to comply with the settlement requirements provided in Ark. Code Ann. § ll-9-410(c). In addition, Liberty Mutual contends that the release signed by Glover in favor ofWhitaker is not effective to bar its claims against Whitaker because it had no notice of the release agreement. Liberty Mutual thus contends that it is entitled under Ark. Code Ann. § 11-9-410 to pursue an action against Whitaker, the third-party tortfeasor, to recover the workers’ compensation benefits it paid to Glover and that the trial court erred in interpreting this statute and in finding that it was required to give notice to Southern Farm to protect its lien.

On appeal, this court need only decide if the grant of summary judgment was appropriate based on whether the evidentiary items presented by the moving party in support of the motion left a material question of fact unanswered. Flentje v. First Nat’l Bank of Wynne, 340 Ark. 563, 11 S.W.3d 531 (2000). The burden of sustaining a motion for summary judgment is on the movant. Id. All proof submitted must be viewed in the light most favorable to the party resisting the motion, and any doubts or inferences are resolved against the moving party. Id. Once the moving party has established a prima facie entitlement to summary judgment by affidavits or other supporting documents, the opposing party must meet proof with proof and demonstrate the existence of a material issue of fact. Id. Summary judgment is appropriate under Ark. R. Civ. P. 56(c) when there is no genuine issue as to a material fact and when the moving party is entitled to summary judgment as a matter of law. Id.

According to Ark. Code Ann.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Nelms v. Martin
263 S.W.3d 567 (Court of Appeals of Arkansas, 2007)
Sherwood Forest Mobile Home Park v. Champion Home Builders Co.
199 S.W.3d 707 (Court of Appeals of Arkansas, 2004)

Cite This Page — Counsel Stack

Bluebook (online)
128 S.W.3d 473, 83 Ark. App. 412, 2003 Ark. App. LEXIS 826, Counsel Stack Legal Research, https://law.counselstack.com/opinion/liberty-mutual-insurance-v-whitaker-arkctapp-2003.