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Click here for the full text of this decision FACTS:Shannon Perkins and her children were injured in an accident with Eddie Mike Cooper Jr., who was driving Harold Oaks’ dump truck. Perkins had auto insurance with State Farm Mutual Automobile Insurance, which included uninsured/underinsured motorist benefits, but Cooper did not have any insurance. State Farm thus paid Perkins $25,000 under the UM benefits portion of her policy. Perkins then sued Cooper and Oaks, alleging that Cooper was intoxicated at the time of the accident and that Oaks had been negligent in not preventing Cooper from driving. Perkins could not serve Cooper, but her case against Oaks, who was also insured by State Farm, proceeded. State Farm intervened, seeking reimbursement for the $25,000 it paid Perkins. Perkins filed a motion to strike With the agreement of the parties, the trial court delayed consideration of the motion until after trial. A jury found Oaks negligent and awarded Perkins $53,000 in damages, plus $1,100 to Perkins’ kids, all covered by the main provisions of Oaks’ policy. The trial court then heard Perkins’ motion to strike State Farm’s subrogation claim involving the UM benefits it paid to Perkins. The trial court struck State Farm’s claim, though it did not specify whether it was doing so on procedural or substantive reasons. On appeal State Farm argues that it has contractual and statutory subrogation rights for the UM benefits it paid Perkins, and it could have brought suit against Oaks in its own right. Its intervention did not complicate matters, State Farm continued, and it hadn’t intervened, it would have been required to pay the judgment in full prior to a determination of its subrogation rights. In response, Perkins argues that an insurance company may not recover against its own insured in a subrogation action; therefore, State Farm had no right of subrogation against Oaks. HOLDING:Reversed and remanded. The court formulates the following question as central to the appeal, noting that no other Texas court has addressed the issue: “[W]hether an insurer that has paid UM benefits to an insured under one policy may seek subrogation or reimbursement for the payment of those benefits from another of its insureds under a different policy.” In the first step of its analysis, the court confirms that the clear language of Perkins’ policy provided State Farm with contractual rights of subrogation and reimbursement. Furthermore, State Farm has a general statutory right of subrogation for UM benefits paid to Perkins under Insurance Code Art. 5.06-1(6). The court then turns to decide whether those rights of subrogation can be asserted against its own insured, that is, Oaks. The court reviews the antisubrogation rule established in Stafford Metal Works Inc. v. Cook Paint and Varnish Co., 418 F.Supp. 1318 (S.D. Tex. 1996), noting the five basic reasons behind the rule: 1. An insurer who seeks subrogation stands in the shoes of the insured and can take nothing by subrogation but the rights of the insured; 2. The insurer that has accepted premiums to cover certain risks should not be allowed to pass the same risks back to its insured in a subrogation action; 3. The relationship between an insurer and its insured are fraught with conflicting interests; 4. The possibility that, if insurers were permitted to sue their insureds for subrogation, the insurers would be able to obtain information from their insureds under the guise of policy provisions for later use in a subrogation action; and 5. An insurer’s right to sue its insured could be interpreted by the insurer as a judicial sanction to breach the insurance policy. The court says the rule makes sense in the context of cases involving only one policy. The rule does not make as much sense when there are two different insureds covered by two separate and distinct policies. The five policy concerns are not present in these cases. “[A] subrogation action does not pass the risk of loss back to Oaks or create a conflict of interest between State Farm and Oaks. Further, State Farm did nothing to breach its insurance policy with Oaks. Perkins initiated the suit against Oaks, and State Farm merely attempted to intervene to protect its subrogation interests. The antisubrogation rule should not apply under these circumstances.” Furthermore, Perkins sued Oaks, whose policy covered the dump truck. The dump truck was not an uninsured/uninsured vehicle as Perkins’ policy defined that term. The risk that Perkins’ policy covered did not occur, and State Farm did not have to pay the UM benefits. Allowing it to recover the payment it did make will not result in an avoidance of coverage under Perkins’ policy. The court next considers whether the trial court based its ruling on the made-whole and common-fund doctrines. Perkins asserts that the $53,000 awarded by the jury did not fully compensate her for her injuries, so the trial court could have rejected State Farm’s subrogation claims so as to make Perkins whole. The court finds no case law to support such a theory, noting instead that a jury verdict constitutes a full recovery for purposes of the made-whole doctrine. This doctrine does not, therefore, preclude State Farm from recovering in subrogation, either. OPINION:McCall, J.; Wright, C.J, and McCall and Strange, J.J.

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