VAN DYNE v. William Gerald Dunn, Defendant, Cross-Complainant, Cross-Defendant, Appellant and Cross-Respondent. (1985)

Plaintiff suffered a knee injury in a pedestrian automobile accident caused by defendants.   Defendant Dunn appeals from the judgment finding him negligent, and plaintiff cross-appeals from the order reducing her damage award by the amount she received from her uninsured motorist's coverage.   We shall affirm the finding of negligence on the part of Dunn, but reverse the set-off order.

Plaintiff and her husband were standing by a snowbank on the north side of the road west of the intersection of highways 89 and 28 in Tahoe City, waiting for a ride to the ski areas.   East of the intersection, highway 89 has four lanes, two left turn only lanes and two through lanes.   West of the intersection the two through lanes merge into one.   As traffic stopped for a red light, defendant Dunn was in the second left turn only lane (lane # 2).   Although the road markings were covered by sand, an overhead sign clearly delineated the turn lanes.   An unidentified red vehicle occupied the through lane to the right of Dunn (lane # 3), and defendant McCarty was in the far right lane (lane ### 4).   As the light changed, defendant McCarty proceeded through the intersection in the far through lane (lane # 4);  defendant Dunn did not turn left, but instead proceeded through the intersection and shifted to the right toward the red vehicle.   The unidentified red vehicle veered to the right toward the McCarty vehicle, causing McCarty's vehicle to swerve to the right and strike plaintiff.

Dunn, McCarty, and Tana McDonald, owner of the vehicle driven by McCarty, were named in plaintiff's complaint as defendants.   A default judgment was taken against McDonald.   The red vehicle did not stop after the accident, and its owner was not identified.   The jury returned a verdict in favor of plaintiff against Dunn and McCarty for $50,000.   In a special verdict, the jury found plaintiff had been contributorily negligent in the amount of 5 percent and reduced the judgment accordingly to $47,500.   Dunn and McCarty were each found to be 45 percent negligent.¹  Upon the request of the defendants, the judgment was further reduced by $15,000, the amount plaintiff received prior to trial from her uninsured motorist insurance policy.

I 2

II

On her cross-appeal, plaintiff contends the trial court erred in reducing her judgment by $15,000 she received from her insurance carrier under the uninsured motorist clause.   We agree.

Plaintiff is insured by California State Automobile Association (hereafter CSAA).   Under the uninsured motorist provision included in her policy, CSAA paid plaintiff $15,000 prior to the trial because of the uninsured status of Dunn and Tana McDonald, the owner of the vehicle driven by McCarty.   At the time the judgment was reduced by this amount on motion of the defendants, the statute of limitations had not run on the time in which CSAA could bring an action against defendants under its subrogation rights.  (Ins.Code, § 1580.2, subd. (g).)  That time has now expired, and CSAA has failed to bring such an action against defendants.   However, plaintiff remains potentially liable to CSAA for reimbursement under the terms of her policy.

More importantly, the motion to reduce the judgment was made in reliance upon Waite v. Godfrey (1980) 106 Cal.App.3d 760, 163 Cal.Rptr. 881.   In Waite, the plaintiff received injuries as the result of a chain reaction accident.   The vehicle which made the first impact fled the scene and was not joined as a defendant.   The plaintiff received $12,000 from her insurance company under the uninsured motorist clause, because she successfully proved to the carrier the hit-and-run driver had caused her injuries.  (Id., at p. 764, 163 Cal.Rptr. 881.)   The defendants were the driver of the vehicle hit by the phantom driver and the person he hit, who in turn struck the plaintiff.   Prior to trial, the court granted the defendants' motion to set off any judgment obtained by the $12,000 settlement.   After the jury returned a verdict in favor of the plaintiff for $20,000, the trial court reversed its prior order and declined to allow a setoff.  (Id., at p. 765, 163 Cal.Rptr. 881.)

The appellate court reversed, taking great pains to emphasize that its decision was based on the fact the uninsured motorist settlement was paid because of the concurrent negligence of the hit-and-run driver, not because of the negligence of the named defendants.   The court stated, “In short, the settlement of $12,000 received by plaintiff is in no conceivable sense traceable to any act of the defendants.  [¶] ․ In the case before us, we repeat, the uninsured motorist coverage settlement was paid to plaintiff only because of the concurrent negligence attributable to the Jaguar driver and not because of any negligence of the defendants.  [Emphasis in original.] ․ [¶]  In terms of the relationships of the parties here, including the absent Jaguar driver, we reiterate that the uninsured motorist settlement received by plaintiff represented only a payment made on the occasion of damage inflicted by another joint tortfeasor, i.e., another wrongdoer besides defendants, regardless of what carrier was the source of the payment.”  (Id., at p. 772, 163 Cal.Rptr. 881.)   The court correctly noted that a plaintiff is entitled to only one satisfaction, and if partial payment is received from one tortfeasor, the obligation to pay on the part of the others shall be reduced accordingly.   (Laurenzi v. Vranizan (1945) 25 Cal.2d 806, 813, 155 P.2d 633;  Code Civ.Proc., § 877.)

 Waite is factually inapposite to the present proceedings and does not support the order of reduction for three reasons.   First, the present case involves an uninsured motorist payment made because of the uninsured status of defendants,³ not because of the action of the unidentified red vehicle, a potential joint tortfeasor.   Plaintiff could not have made a claim under her uninsured motorist coverage for the actions of the red car as there was no physical contact between it and her.  (Ins.Code, § 11580.2, subd. (b)(1);  Boyd v. Inter-insurance Exchange (1982) 136 Cal.App.3d 761, 764, 186 Cal.Rptr. 443.)

 The “collateral source” rule is an exception to the general rule of mitigation of damages.   Where a plaintiff receives compensation from a source wholly independent of the tortfeasor, his or her recovery is not reduced.  (Anheuser-Busch, Inc. v. Starley (1946) 28 Cal.2d 347, 349, 170 P.2d 448.)   That is precisely what occurred here.   Uninsured motorist coverage is intended to protect persons lawfully using the highways who are injured through no fault of their own by an uninsured driver.  (Fireman's Fund etc. Co. v. Ind. Acc. Com. (1964) 226 Cal.App.2d 676, 677–678, 38 Cal.Rptr. 336.)   The provisions of Insurance Code section 11580.2 are not for the benefit of the uninsured driver;  the insurer does not stand in the shoes of the tortfeasor.  (Ibid.;  Johnson v. Oliver (1968) 266 Cal.App.2d 178, 181, 72 Cal.Rptr. 137.)   By reducing plaintiff's judgment, the trial court has allowed defendants to benefit from plaintiff's prudence in having insurance, a result the collateral source rule was designed to prevent.  (Helfend v. Southern Cal. Rapid Transit Dist. (1970) 2 Cal.3d 1, 9–10, 84 Cal.Rptr. 173, 465 P.2d 61.)   The payment made to plaintiff by CSAA is directly traceable to the acts of defendants (cf. Waite v. Godfrey, supra, 106 Cal.App.3d at pp. 771–772, 163 Cal.Rptr. 881), and stems from a source wholly independent from them.

 Second, the Waite court was concerned with the possibility the defendants would be doubly liable if the plaintiff's insurer brought an action against them under its subrogation rights.   If that occurred, the defendants would be required to pay a total of $32,000 for an injury the jury determined was worth $20,000.   At the time Waite was published, the plaintiff's insurer still had time in which to bring such an action.  (106 Cal.App.3d at p. 775, 163 Cal.Rptr. 881.)   Here, CSAA has failed to bring a subrogation action against defendants within the three-year statute of limitations set forth in section 11580.2, subdivision (g) of the Insurance Code.   There is no danger of double liability.   To the contrary, defendants would receive a windfall if the setoff was allowed to stand;  they would be liable for only $32,500, when the jury found them liable for $47,500.

 Finally, the Waite decision failed to consider the liability of a plaintiff to reimburse his or her insurer.   Under the terms of her policy, where plaintiff has received a payment for her injury, CSAA is “entitled to the extent of such payment to the proceeds of any settlement or judgment that may result from the exercise of any rights of recovery of such person against any person or organization legally responsible for the bodily injury because of which such payment is made;  ․”   If CSAA chooses to seek reimbursement from plaintiff, it will result in a net recovery by plaintiff of $32,500 for an injury deemed by the jury to be worth $47,500.   It is possible CSAA will not seek reimbursement and plaintiff will recover a net award of $62,500.   We do not find that possibility to be repugnant to public policy, for as the Helfend court noted, a plaintiff rarely receives full compensation for his injuries because of attorney fees and costs.   Allowing plaintiff to retain both the $47,500 judgment and the settlement from CSAA will not give her a double recovery but will actually result in a close approximation of full compensation after costs and fees are deducted.  (2 Cal.3d at p. 13, 84 Cal.Rptr. 173, 465 P.2d 61.)

The judgment finding defendant Dunn negligent is affirmed.   The order reducing plaintiff's recovery by $15,000 is reversed;  the trial court is ordered to reinstate the full verdict of $47,500.   Plaintiff shall recover her costs on appeal.

FOOTNOTES

1.   The jury allocated 5 percent of the total negligence to “other persons.”

2.   See footnote *, ante.

3.   McCarty argues the payment made on behalf of McDonald and Dunn constitutes payment on behalf of joint tortfeasors.   The argument is not persuasive.   McDonald was named as a defendant, and was liable because of the negligence of McCarty.  (Veh.Code, § 17150;  Mooren v. King (1960) 182 Cal.App.2d 546, 552, 6 Cal.Rptr. 362.)   Thus, the payment stems directly from the acts of McCarty.

EVANS, Acting Presiding Justice.

BLEASE and CARR, JJ., concur.