B-54299, JANUARY 24, 1946, 25 COMP. GEN. 558

B-54299: Jan 24, 1946

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ARISING OUT OF DAMAGE TO PRIVATE PROPERTY CAUSED BY THE NEGLIGENCE OF GOVERNMENT EMPLOYEES WAS FILED SEPARATELY AND INDEPENDENTLY OF THE CLAIM OF THE INSURED. - BUT WAS NOT FILED WITHIN THE ONE-YEAR LIMITATION PERIOD FIXED BY SAID ACT. I NOW HAVE BEFORE ME A CASE WHERE A CITIZEN SUSTAINING PROPERTY DAMAGE IN A MAIL TRUCK ACCIDENT ON SEPTEMBER 14. IN FILING SUCH CLAIM HE STATED THAT THE DAMAGE WAS COVERED IN PART BY INSURANCE. NO ACTION WAS TAKEN WITH REFERENCE TO THE INSURANCE COMPANY PENDING THE RECEIPT OF A CLAIM FROM SUCH COMPANY. WAS RECEIVED FROM THE INSURANCE COMPANY MAKING INQUIRY WITH REGARD TO THE STATUS OF THE ORIGINAL CLAIM. IT IS EVIDENT FROM THAT LETTER THAT THE INSURANCE COMPANY EXPECTS TO BE COMPENSATED FOR THAT PORTION OF THE LOSS WHICH IT BORE.

B-54299, JANUARY 24, 1946, 25 COMP. GEN. 558

SUBROGATED DAMAGE CLAIMS ARISING FROM EMPLOYEES' NEGLIGENCE - STATUTORY PERIOD OF LIMITATIONS WHERE THE SUBROGATED CLAIM OF AN INSURANCE COMPANY UNDER THE ACT OF DECEMBER 28, 1922, ARISING OUT OF DAMAGE TO PRIVATE PROPERTY CAUSED BY THE NEGLIGENCE OF GOVERNMENT EMPLOYEES WAS FILED SEPARATELY AND INDEPENDENTLY OF THE CLAIM OF THE INSURED--- WHICH LATTER CLAIM HAD BEEN FINALLY ADJUDICATED AND DETERMINED PURSUANT TO THE ACT--- BUT WAS NOT FILED WITHIN THE ONE-YEAR LIMITATION PERIOD FIXED BY SAID ACT, SUCH LIMITATION PERIOD OPERATES AS A BAR TO CONSIDERATION OF THE INSURANCE COMPANY'S CLAIM AS SUBROGEE.

COMPTROLLER GENERAL WARREN TO THE POSTMASTER GENERAL, JANUARY 24, 1946:

CONSIDERATION HAS BEEN GIVEN TO YOUR LETTER OF DECEMBER 3, 1945, AS FOLLOWS:

THE LEGISLATION UNDER WHICH THE DEPARTMENT ADJUDICATES CLAIMS FOR DAMAGE TO PRIVATE PROPERTY (31 U.S.C. 215) CONTAINS THE FOLLOWING PROVISO:

"PROVIDED THAT NO CLAIM SHALL BE CONSIDERED BY A DEPARTMENT OR OTHER INDEPENDENT ESTABLISHMENT UNLESS PRESENTED TO IT WITHIN ONE YEAR FROM THE DATE OF ACCRUAL OF SAID CLAIM.'

CONGRESS HAS GIVEN RECOGNITION TO THE RIGHT OF AN INSURANCE COMPANY TO FILE CLAIM AS SUBROGEE WHEN IT HAS BEEN REQUIRED TO BEAR EITHER THE WHOLE OR A PORTION OF THE LOSS IN SUCH A CASE. THE DEPARTMENT HAS BEEN CERTIFYING TO YOUR OFFICE FOR PAYMENT SUBROGATION CLAIMS OF THIS CHARACTER WHERE THE INSURANCE COMPANY HAS TAKEN THE MATTER UP WITH A VIEW OF FILING CLAIM WITHIN THE STATUTORY PERIOD.

I NOW HAVE BEFORE ME A CASE WHERE A CITIZEN SUSTAINING PROPERTY DAMAGE IN A MAIL TRUCK ACCIDENT ON SEPTEMBER 14, 1944, FILED CLAIM FOR THE ENTIRE AMOUNT OF SUCH DAMAGE, VIZ., $59.44, A FEW MONTHS AFTER THE ACCIDENT HAPPENED. IN FILING SUCH CLAIM HE STATED THAT THE DAMAGE WAS COVERED IN PART BY INSURANCE. IN ADJUDICATING THIS CLAIM, THE DEPARTMENT ALLOWED $25 --- THE UNINSURED PORTION OF THE CLAIMANT'S LOSS. NO ACTION WAS TAKEN WITH REFERENCE TO THE INSURANCE COMPANY PENDING THE RECEIPT OF A CLAIM FROM SUCH COMPANY. HOWEVER, ON OCTOBER 30, 1945, A LETTER DATED OCTOBER 26, 1945, WAS RECEIVED FROM THE INSURANCE COMPANY MAKING INQUIRY WITH REGARD TO THE STATUS OF THE ORIGINAL CLAIM. IT IS EVIDENT FROM THAT LETTER THAT THE INSURANCE COMPANY EXPECTS TO BE COMPENSATED FOR THAT PORTION OF THE LOSS WHICH IT BORE.

YOUR DECISION IS REQUESTED WHETHER THE FILING OF CLAIM BY THE OWNER OF THE DAMAGED VEHICLE WITHIN THE STATUTORY PERIOD INURES TO THE BENEFIT OF HIS INSURER SO THAT IF A CLAIM SHOULD BE FILED BY THE LATTER SUBSEQUENT TO THE EXPIRATION OF THE STATUTORY PERIOD, IT MIGHT NEVERTHELESS BE TAKEN UP FOR CONSIDERATION AT THAT TIME.

IT IS A WELL-ESTABLISHED RULE THAT, UPON PAYMENT OF A LOSS, AN INSURER IS ENTITLED TO BE SUBROGATED PRO TANTO TO ANY RIGHT OF ACTION WHICH THE INSURED MAY HAVE AGAINST A THIRD PERSON WHOSE NEGLIGENCE OR WRONGFUL ACT CAUSED THE LOSS. STANDARD MARINE INS. CO. V. SCOTTISH METROPOLITAN ASSURANCE CO., 283 U.S. 284; HARTFORD F. INS. CO. V. CHICAGO M. AND ST. P.R. CO., 175 U.S. 91. THE INSURER'S RIGHT OF SUBROGATION AGAINST THIRD PERSONS CAUSING THE LOSS PAID BY THE INSURER TO THE INSURED DOES NOT REST UPON ANY RELATION OF CONTRACT OR PRIVITY BETWEEN THE INSURER AND SUCH THIRD PERSON, BUT ARISES OUT OF THE CONTRACT OF INSURANCE AND IS DERIVED FROM THE INSURED ALONE; CONSEQUENTLY, THE INSURER CAN TAKE NOTHING BY SUBROGATION BUT THE RIGHTS OF THE INSURED, AND IS SUBROGATED ONLY TO SUCH RIGHTS AS THE INSURED POSSESSED. HARTFORD F. INS. CO. V. CHICAGO, M. AND ST. P.R. CO., SUPRA; WAGNER V. PROVIDENCE INS. CO., 150 U.S. 99. HENCE, IT FOLLOWS THAT THE CONSIDERATION OF A CLAIM OF A SUBROGEE FILED UNDER THE ACT OF DECEMBER 28, 1922, 42 STAT. 1066, 31 U.S.C. 215, IS SUBJECT TO THE PROVISION THEREIN ESTABLISHING THE PERIOD OF ONE YEAR WITHIN WHICH CLAIMS MUST BE PRESENTED.

IT APPEARS FROM YOUR LETTER THAT THE ORIGINAL CLAIM FILED WITH YOUR DEPARTMENT BY THE INDIVIDUAL WHOSE PROPERTY WAS DAMAGED WAS ON HIS OWN BEHALF AND THAT THE INSURANCE COMPANY WAS NOT A PARTY CLAIMANT AT THE TIME. IT APPEARS FURTHER THAT SAID CLAIM WAS FINALLY ADJUDICATED AND DETERMINED BY YOUR DEPARTMENT BEFORE ANY CLAIM WAS RECEIVED BY THE INSURANCE COMPANY AS SUBROGEE. AS THE CLAIM OF THE PERSON WHOSE PROPERTY WAS DAMAGED WAS NOT PENDING BEFORE YOUR DEPARTMENT AT THE TIME A CLAIM WAS ASSERTED BY THE INSURANCE COMPANY, THE LATTER'S CLAIM NECESSARILY IS SEPARATE AND INDEPENDENT FROM THAT ORIGINALLY FILED BY THE INSURED AND, AS THE COMPANY'S CLAIM WAS NOT ASSERTED WITHIN THE ONE YEAR PERIOD PRESCRIBED BY THE STATUTE, THE CONSIDERATION THEREOF BY YOUR DEPARTMENT WOULD NOT APPEAR TO BE CONTEMPLATED BY THE TERMS OF THE STATUTE.

SUPPORT FOR SUCH VIEW IS FOUND IN COURT DECISIONS INVOLVING THE SOMEWHAT ANALOGOUS QUESTION AS TO WHETHER SUBROGEES OR BENEFICIARIES HAVE THE RIGHT TO FILE SUITS AFTER THE STATUTORY PERIOD OF LIMITATIONS HAS EXPIRED BUT WHERE A SEPARATE SUIT WAS FILED BY OTHER SUBROGEES OR BENEFICIARIES AND WAS FINALLY ADJUDICATED. IN SUCH CONNECTION, NO DECISION HAS COME TO ATTENTION IN WHICH IT WAS HELD THAT ONE WHOSE CLAIM IS DERIVED FROM ANOTHER WHO HAS TIMELY FILED A SUIT AND HAD IT FINALLY DETERMINED COULD INSTITUTE A SEPARATE AND INDEPENDENT ACTION AFTER THE STATUTORY PERIOD HAS EXPIRED. THERE IS JUDICIAL PRECEDENT TO THE CONTRARY. IN THE CASE OF GUNNELL'S ADM-RS. V. DIXON'S ADM-R., 43 S.E. 340, THE PLAINTIFF URGED THAT THE STATUTE OF LIMITATIONS INVOLVED HAD BEEN SUSPENDED AS TO HIS CAUSE OF ACTION BY REASON OF THE TIMELY FILING OF A GENERAL CREDITOR'S SUIT IN WHICH THERE HAD BEEN A FINAL ADJUDICATION, BUT TO WHICH THE PLAINTIFF WAS NOT A PARTY. THIS CONTENTION WAS REJECTED, THE COURT STATING AS FOLLOWS:

* * * EVEN IF IT WERE A GENERAL CREDITORS' SUIT, IT MAY WELL BE DOUBTED WHETHER, UNDER THE PROVISIONS OF SECTION 3573 OF THE CODE, THE DOCTRINE INVOKED, WHICH IS NOT FOUNDED UPON LEGISLATIVE ENACTMENT, BUT IS A MERE RULE OF COURTS OF EQUITY, FOR THE MORE CONVENIENT ADMINISTRATION OF THE DEBTOR'S ESTATE, AND TO AVOID A MULTIPLICITY OF SUITS ( CALL AWAY'S ADM-R V. SAUNDERS, 99 VA. 350, 352, 38 S.E. 182), COULD SUSPEND THE RUNNING OF THE STATUTE OF LIMITATIONS, OR PREVENT ITS BEING RELIED ON AS A DEFENSE, WHEN IT IS SOUGHT TO ENFORCE THE JUDGMENTS IN ANY PROCEEDING OTHER THAN THE GENERAL CREDITOR'S SUIT IN WHICH THE JUDGMENTS HAD BEEN ASSERTED; THE GENERAL RULE BEING THAT THE PENDENCY OF A SUIT OPERATES TO SUSPEND THE STATUTE AS TO PARTIES THERETO SO FAR AS THE SUBJECT MATTER OF THAT SUIT IS CONCERNED. BUT THE SUSPENSION ONLY EXISTS AS TO THAT PARTICULAR SUIT, AND NOT AS TO THE CAUSE OF ACTION INVOLVED THEREIN. DABNEY V. SHELTON, 82 VA. 349, 351, 4 S.E. 605; STRAUS V. BODEKER'S EX-R. 86 VA. 543, 547, 10 S.E. 570. (ITALICS SUPPLIED.) AND, IN THE CASE OF MARSH V. UNITED STATES, 97 F.2D 327, INVOLVING THE QUESTION AS TO WHETHER THE FILING OF SUIT WITHIN THE PERIOD OF LIMITATIONS BY ONE BENEFICIARY UNDER A POLICY OF WAR RISK INSURANCE SAVES THE RUNNING OF THE STATUTE IN RESPECT TO OTHER BENEFICIARIES SUBSEQUENTLY JOINING IN THE PENDING SUIT, THE COURT STATED:

* * * WHERE SUIT IS PROPERLY INSTITUTED BY THE PERSON WHOSE CLAIM IS DENIED, OR BY ONE WHO HAS SUCCEEDED TO THE RIGHTS OF SUCH PERSON, IT INURES TO THE BENEFIT OF ALL WHO CLAIM UNDER THE POLICY AND ARE PROPERLY MADE PARTIES TO SUCH SUIT UNDER THE STATUTE. THIS DOES NOT MEAN, OF COURSE, THAT AN INDEPENDENT SUIT MAY BE INSTITUTED BY A BENEFICIARY WHO HAS FILED NO CLAIM OR THAT THE FILING OF SUIT BY ONE BENEFICIARY WOULD PREVENT THE BAR OF THE STATUTE IN AN INDEPENDENT SUIT FILED BY ANOTHER. IT MEANS MERELY THAT THE STATUTE IS TOLLED BY THE INSTITUTION OF THE SUIT AS TO ALL WHO ARE MADE PARTIES TO THAT SUIT FOR THE PURPOSE OF SHARING IN THE RECOVERY UNDER THE POLICY. * * * ( ITALICS SUPPLIED.)

APPLYING TO THE PRESENT MATTER THE RATIONALE OF THE AFORESAID DECISIONS AND HAVING REGARD FOR THE FACT THAT THE INSURER'S CLAIM WAS NOT FILED UNTIL AFTER FINAL ADJUDICATION OF THE CLAIM OF THE INSURED, THE CONCLUSION IS WARRANTED THAT THE LIMITATION PERIOD FIXED BY THE STATUTE IN QUESTION OPERATES AS A BAR TO CONSIDERATION OF THE COMPANY'S CLAIM AT THIS TIME. TO VIEW THE STATUTE OTHERWISE WOULD BE TO RECOGNIZE THAT, UNDER SUCH CIRCUMSTANCES, THE PRESCRIBED LIMITATION PERIOD IS SUSPENDED INDEFINITELY AND THUS WOULD PERMIT THE CONSIDERATION OF SUBROGATED CLAIMS PRESENTED FIVE, TEN OR FIFTY YEARS SUBSEQUENT TO THE FINAL ADJUDICATION OF THE ORIGINAL CLAIM BY YOUR DEPARTMENT. SUCH A RESULT WOULD APPEAR TO BE CONTRARY TO THE LAW AND TO SOUND REASON.

ACCORDINGLY, THE QUESTION PRESENTED IN THE ULTIMATE PARAGRAPH OF YOUR LATTER IS ANSWERED IN THE NEGATIVE ON THE BASIS OF THE SPECIFIC FACTS RELATED.