Vigilant Insurance Company v. Bowman Et

Clyde M. Alexander purchased a policy of automobile liability insurance from Vigilant Insurance Company (Vigilant). The policy contained the standard provisions for collision coverage and subrogation. On May 25, 1971, while the policy was in effect, Alexander's automobile was involved in a collision with an automobile driven by Bobby D. Bowman (Bowman), the owner of a liability insurance policy issued by State Farm Mutual Automobile Insurance Company (State Farm). On May 27, 1971, Vigilant issued its draft to Alexander to cover the collision loss, less deductible, took possession of the Alexander automobile, and disposed of it for salvage. Vigilant's net loss was $875. On June 22, 1971, State Farm paid Alexander $700 and took from Alexander and his wife a general release which recited that it releases and forever discharges James E. Gillis and/or Bobby Bowman . . . and all other persons . . . liable or who might be claimed to be liable . . . from any and all claims . . . both to person and property, which have resulted or may in the future develop from . . . [the accident aforementioned]. The evidence showed that, at the time State Farm made the $700 payment to Alexander, its agent had actual knowledge that vigilant had paid Alexander for his collision loss. Further, the evidence showed that State Farm's agent wrote Vigilant on September 28, 1971, advising that we settled with your insured on June 22, 1971, at which time we had the understanding with your insured that the only reason settlement was being made was because of the bodily injury arising out of the accident and the settlement, which I might add, was a nuisance amount. We did not tell him we would honor the subrogation claim at any event and as a matter of fact, advised him that we would deny the subrogation claim if presented. (Emphasis supplied.) Vigilant brought suit against Bowman seeking recovery of the net loss it sustained as a result of the payment made to Alexander pursuant to the terms of its aforesaid insurance policy with Alexander. By amendment, Vigilant added State Farm as a party defendant and alleged that State Farm paid Alexander $700 knowing of the interest of plaintiff in this case at the time said payment was made. This allegation was specifically denied by State Farm in its answer. State Farm and Bowman made a motion for summary judgment, relying on the pleadings in the case and the deposition of Alexander. Vigilant responded to the motion for summary judgment, relying on unanswered requests for admission of fact and documents, the pleadings, and answers to interrogatories propounded to defendant Bowman. The trial Judge sustained defendants' motion for summary judgment and the plaintiff appeals. Held :