B-169469, MAY 5, 1970, 49 COMP. GEN. 758

B-169469, MAY 5, 1970, 49 COMP. GEN. 758

TORTS -- CLAIMS UNDER FEDERAL TORT CLAIMS ACT -- PRIVATE PROPERTY DAMAGE, ETC. -- SETTLEMENT THE PERSONAL INJURIES AND PROPERTY DAMAGE CLAIMS OF A PRIVATE INSURANCE POLICY HOLDER AND HIS SUBROGEE INSURER THAT AROSE IN CONNECTION WITH A TORT--A COLLISION WITH A GOVERNMENT VEHICLE OPERATED BY A FOREIGN SERVICE EMPLOYEE--ALTHOUGH PRESENTED SEPARATELY ARE NOT SEPARATE AND DISTINCT CLAIMS, AS A SUBROGEE'S RIGHTS GROW OUT OF THE RIGHTS AND THE CAUSE OF ACTION OF HIS SUBROGOR AND, THEREFORE, THE CLAIMS TOTALING IN EXCESS OF $2,500, THE LIMIT PRESCRIBED BY THE FEDERAL TORT CLAIMS ACT (28 U.S.C. 2672) FOR PAYMENT BY AN ADMINISTRATIVE AGENCY, PAYMENT OF THE CLAIMS MAY NOT BE MADE BY THE DEPARTMENT OF AGRICULTURE FROM ITS APPROPRIATED FUNDS, BUT ARE FOR PAYMENT BY THE UNITED STATES GENERAL ACCOUNTING OFFICE FROM THE APPROPRIATION MADE BY 31 U.S.C. 724A FOR PAYMENT OF JUDGMENTS AND COMPROMISE SETTLEMENTS.

TO LOUIS B. ANDERSON, DEPARTMENT OF AGRICULTURE, MAY 5, 1970:

YOUR LETTER OF MARCH 31, 1970, REQUESTS A DECISION AS TO WHETHER YOU MAY CERTIFY FOR PAYMENT TWO VOUCHERS COVERING THE TORT CLAIM OF A PRIVATE PARTY AND HIS INSURER SUBROGEE. THE TWO VOUCHERS COMBINED INVOLVE A TOTAL AMOUNT IN EXCESS OF $2,500 BUT LESS THAN $100,000, AND A QUESTION ARISES AS TO WHETHER UNDER THE FEDERAL TORT CLAIMS ACT, 28 U.S.C. 2672, PAYMENT SHOULD BE MADE BY THE FOREIGN SERVICE FROM ITS APPROPRIATIONS OR BY THIS OFFICE FROM THE APPROPRIATION MADE BY 31 U.S.C. 724A.

THE RECORD DISCLOSES THAT AS A RESULT OF A COLLISION WITH A GOVERNMENT VEHICLE OPERATED BY A FOREST SERVICE EMPLOYEE, HAROLD WACASTER, AS CLAIMANT, AND MARYLAND CASUALTY COMPANY, AS SUBROGEE OF MR. WACASTER, FILED SEPARATE CLAIMS WITH YOUR DEPARTMENT UNDER THE FEDERAL TORT CLAIMS ACT, 28 U.S.C. 2672, FOR PERSONAL INJURIES AND PROPERTY DAMAGE IN THE AMOUNT OF $54,143.48. ON OCTOBER 23, 1969, SETTLEMENT WAS APPROVED BY YOUR OFFICE OF GENERAL COUNSEL IN THE AMOUNT OF $2,000 TO MR. WACASTER, AND $893.48 TO MARYLAND CASUALTY COMPANY, AS SUBROGEE, FOR A TOTAL OF $2,893.48. HOWEVER, IN APPROVING THE SETTLEMENT, MR. KAYE, ACTING ASSISTANT GENERAL COUNSEL, TOOK THE POSITION THAT THE CLAIMS OF MR. WACASTER AND HIS SUBROGEE ARE ONE CLAIM, AND THAT SINCE THE TOTAL AWARD EXCEEDS THE $2,500 LIMIT ON AMOUNTS WHICH CAN BE PAID BY ADMINISTRATIVE AGENCIES UNDER 28 U.S.C. 2672, PAYMENT CANNOT BE MADE BY YOUR DEPARTMENT BUT RATHER MUST BE MADE BY THE GENERAL ACCOUNTING OFFICE FROM THE APPROPRIATION MADE BY 31 U.S.C. 724A.

SUBSEQUENTLY, OUR CLAIMS DIVISION DECLINED TO MAKE PAYMENT AND RETURNED THE CLAIMS TO YOUR DEPARTMENT FOR PAYMENT. THE CLAIMS DIVISION CITED 40 COMP. GEN. 307 (1960) IN SUPPORT OF ITS ACTION, AND STATED THAT SINCE THE TOTAL AMOUNT OF THE SETTLEMENT IN THIS CASE IS COMPRISED OF INDIVIDUAL AWARDS, EACH FOR LESS THAN $2,500, WHICH HAVE BEEN COMBINED IN ONE SETTLEMENT AGREEMENT, THE CLAIMS WERE FOR PAYMENT BY THE DEPARTMENT OF AGRICULTURE FROM ITS APPROPRIATIONS.

SECTION 2672, TITLE 28, U.S.C. PROVIDES, IN PERTINENT PART, AS FOLLOWS:

ANY AWARD, COMPROMISE, OR SETTLEMENT IN AN AMOUNT OF $2,500 OR LESS MADE PURSUANT TO THIS SECTION SHALL BE PAID BY THE HEAD OF THE FEDERAL AGENCY CONCERNED OUT OF APPROPRIATIONS AVAILABLE TO THAT AGENCY. PAYMENT OF ANY AWARD, COMPROMISE, OR SETTLEMENT IN AN AMOUNT IN EXCESS OF $2,500 MADE PURSUANT TO THIS SECTION OR MADE BY THE ATTORNEY GENERAL IN ANY AMOUNT PURSUANT TO SECTION 2677 OF THIS TITLE SHALL BE PAID IN A MANNER SIMILAR TO JUDGMENTS AND COMPROMISES IN LIKE CAUSES AND APPROPRIATIONS OR FUNDS AVAILABLE FOR THE PAYMENT OF SUCH JUDGMENTS AND COMPROMISES ARE HEREBY MADE AVAILABLE FOR THE PAYMENT OF AWARDS, COMPROMISES, OR SETTLEMENTS UNDER THIS CHAPTER.

WE AGREE WITH YOUR OFFICE OF GENERAL COUNSEL THAT, FOR PURPOSES OF DETERMINING WHETHER A TORT CLAIM SHOULD BE PAID BY THE FEDERAL AGENCY INVOLVED OR BY THIS OFFICE, THE CLAIMS OF AN INSURANCE POLICY HOLDER AND HIS INSURER SUBROGEE SHOULD BE CONSIDERED ONE CLAIM, AND THAT WHERE THE TOTAL AMOUNT AWARDED IN SUCH CASES EXCEEDS $2,500 PAYMENT MAY NOT BE MADE BY THE ADMINISTRATIVE AGENCY. IN 41 OP. ATTY. GEN. 70 (1950) THE ATTORNEY GENERAL RULED THAT THE INTERESTS OF A SUBROGOR AND SUBROGEE ARE ONLY INTERESTS IN THE SAME SINGLE CLAIM, AND THAT THEREFORE IT WOULD BE UNWARRANTED TO PERMIT ADMINISTRATIVE SETTLEMENT OF A LOSS EXCEEDING THE JURISDICTIONAL AMOUNT PROVIDED FOR IN 28 U.S.C. 2672 MERELY BECAUSE A SUBROGEE FILES A CLAIM SEPARATELY FOR ITS SHARE OF THE CLAIM.

NOTHING IN 40 COMP. GEN. 307, REQUIRES A CONTRARY VIEW. IN THAT CASE, WE HELD ONLY THAT INDIVIDUAL AWARDS UNDER $100,000 EACH, BUT AGGREGATING MORE THAN $100,000, RENDERED TO SEVERAL PLAINTIFFS JOINED IN ONE ACTION, WERE SEPARATE JUDGMENTS, AND WERE THEREFORE PAYABLE BY THIS OFFICE UNDER 31 U.S.C. 724A, WHICH PROVIDES FOR PAYMENT OF JUDGMENTS "NOT IN EXCESS OF $100,000 IN ANY ONE CASE." WE OBSERVED THAT THE JOINING OF SEVERAL PARTIES IN ONE ACTION IS MERELY FOR CONVENIENCE, EACH HAVING A SEPARATE CAUSE OF ACTION, AND VIEWED THE STATUTORY PHRASE "IN ANY ONE CASE" AS RELATING TO THE AMOUNT OF THE JUDGMENT DUE EACH PARTY AND NOT TO THE TOTAL OF ALL INDIVIDUAL JUDGMENTS INVOLVED IN A SINGLE COURT CASE.

THE INSTANT SITUATION, WHILE SIMILAR, DIFFERS FUNDAMENTALLY FROM THAT PRESENTED IN THE ABOVE-CITED CASE IN THAT ONE OF THE TWO PARTIES PRESENTING A CLAIM IS DOING SO AS SUBROGEE OF THE OTHER PARTY. SUBROGEE'S RIGHTS ARE NOT BASED ON A SEPARATE AND DISTINCT CAUSE OF ACTION FROM THAT OF HIS SUBROGOR, BUT RATHER GROW OUT OF THE RIGHTS AND THE CAUSE OF ACTION OF THE LATTER. SUBROGATION PLACES THE PARTY SUBROGATED IN THE SHOES OF THE CREDITOR, AND CONSTITUTES A SUBSTITUTION OF THE SUBROGEE FOR THE SUBROGOR. RECONSTRUCTION FINANCE CORPORATION V TETER, 117 F. 2D 716, 729 (1941); MARYLAND CASUALTY CO. V LINCOLN BANK & TRUST CO., 18 F. SUPP. 375, 377 (1937). A SUBROGEE OCCUPIES EXACTLY THE SAME POSITION AS THE PARTY FOR WHOM HE IS SUBSTITUTED, AND ACQUIRES NO GREATER RIGHTS THAN THOSE HELD BY THE SUBROGOR. HARTFORD ACC. & I. INSURANCE CO. V FIRST NATIONAL BANK AND TRUST CO., OF TULSA, OKLA., 287 F. 2D 69, 72 (1961); MARYLAND CASUALTY CO., SUPRA. MOREOVER, THE RIGHTS AND CLAIMS TO WHICH HE SUCCEEDS ARE TAKEN SUBJECT TO THE LIMITATIONS AND BURDENS INCIDENT TO THEM IN THE HANDS OF THE SUBROGOR. HARTFORD ACC. & I. INS. CO., SUPRA; UNITED STATES FIDELITY & GUARANTY CO. V UNITED STATES, 164 F. SUPP. 703, 706 (1958). IN OTHER WORDS, IF THE SUBROGOR HAS NO RIGHTS, THE SUBROGEE CAN HAVE NONE. RUD. DEGERMARK A.-B. V MONARCH SILK CO., INC., 85 F. SUPP. 535 (1949).

IN VIEW OF THE FOREGOING, THE RULING OF THE ATTORNEY GENERAL, SUPRA, WOULD APPEAR SOUND. IN OUR JUDGEMENT, THE CLAIMS--ARISING IN CONNECTION WITH A TORT--OF A PRIVATE INSURANCE POLICY HOLDER AND HIS SUBROGEE INSURER, THOUGH PRESENTED SEPARATELY, MAY NOT BE CONSIDERED AS SEPARATE AND DISTINCT CLAIMS, BUT RATHER MUST BE REGARDED AS INTERESTS IN ONE AND THE SAME CLAIM FOR PURPOSES OF DETERMINING WHETHER THE ADMINISTRATIVE AGENCY INVOLVED MAY MAKE PAYMENT UNDER THE FEDERAL TORT CLAIMS ACT FROM ITS APPROPRIATIONS.

ACCORDINGLY, THE RATIONALE OF 40 COMP. GEN. 307 IS NOT APPLICABLE TO THE INSTANT SITUATION. IN THE PRESENT CASE SINCE ONLY ONE DISTINCT CLAIM IS INVOLVED AND THE TOTAL AWARD EXCEEDS $2,500, YOU MAY NOT CERTIFY THE VOUCHERS FOR PAYMENT BY YOUR DEPARTMENT UNDER AUTHORITY OF 28 U.S.C. 2672; RATHER THE AWARDS IN QUESTION ARE FOR PAYMENT BY THIS OFFICE FROM THE APPROPRIATION MADE BY 31 U.S.C. 724A. THEREFORE, THE VOUCHERS TRANSMITTED WITH YOUR LETTER ARE BEING SENT TODAY TO OUR CLAIMS DIVISION WITH INSTRUCTIONS TO MAKE PAYMENT OF THE CLAIMS OF HAROLD WACASTER AND HIS SUBROGEE, MARYLAND CASUALTY COMPANY, IN ACCORDANCE WITH THE FOREGOING.