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Nodak Mutual Insurance Co. v. McDowell

June 30, 2010

NODAK MUTUAL INSURANCE COMPANY, PLAINTIFF AND APPELLANT,
v.
NICHOLE MCDOWELL AND KEVIN DUNN, DEFENDANTS AND APPELLEES.



APPEAL FROM THE CIRCUIT COURT OF THE FIFTH JUDICIAL CIRCUIT BROWN COUNTY, SOUTH DAKOTA HONORABLE TONY L. PORTRA Judge.

The opinion of the court was delivered by: Severson, Justice

CONSIDERED ON BRIEFS ON MAY 24, 2010

[¶1.] Nodak Mutual Insurance Company (Nodak) paid basic no-fault benefits to its insured, Nichole McDowell, a North Dakota resident, as a result of an automobile accident in South Dakota caused by Kevin Dunn, a South Dakota resident. McDowell then brought a negligence action against Dunn, which the parties settled without notifying Nodak. When McDowell and Dunn refused to reimburse Nodak for the benefits it paid McDowell, Nodak initiated this lawsuit to pursue its right of subrogation. The trial court granted summary judgment in McDowell and Dunn's favor, concluding that Nodak did not have a right of subrogation under North Dakota law because Dunn was a "secured person." Nodak appeals. We reverse and remand.

BACKGROUND

[¶2.] The relevant facts of this case are undisputed. Nodak provided basic no-fault insurance coverage to McDowell and her husband Charles, both residents of Ellendale, North Dakota. On December 17, 2005, McDowell was a passenger in a vehicle driven by Charles. The McDowells were traveling north on North Roosevelt Street in Aberdeen, South Dakota, and stopped at a stoplight at the intersection of North Roosevelt Street and Northeast Eighth Avenue. Dunn, a South Dakota resident who was also traveling north on North Roosevelt Street, struck the rear of the McDowell vehicle.

[¶3.] The McDowells sustained injuries as a result of the accident. Consequently, Nodak paid Charles, its insured, $1,816.33 in no-fault benefits. Dunn's insurer, Progressive Insurance, reimbursed Nodak in that amount. Nodak also paid McDowell $5,008.41 in no-fault benefits. A letter dated May 8, 2007, informed Progressive Insurance that its "investigation of this accident indicate[d] that liability rest[ed] with [Dunn]." Nodak requested "reimbursement under the provisions of the North Dakota Auto Accident Reparations Act for benefits and expenses incurred."

[¶4.] McDowell later brought a negligence action against Dunn to recover damages for the injuries she sustained in the accident. McDowell and Dunn settled the lawsuit for $20,000 without notifying Nodak. As part of the settlement agreement, McDowell released her claims against Dunn and Progressive Insurance. Nodak sought reimbursement from the settlement proceeds for the no-fault benefits it paid McDowell. McDowell and Dunn refused to reimburse Nodak.

[¶5.] On March 5, 2008, Nodak initiated the present action to pursue its right of subrogation against McDowell and Dunn. On October 5, 2009, McDowell and Dunn filed a motion for summary judgment, arguing that Nodak did not have a right to subrogation under North Dakota law because Dunn was a "secured person."*fn1 On October 16, 2009, Nodak filed a cross-motion for summary judgment. The trial court granted summary judgment in McDowell and Dunn's favor. Nodak appeals.

STANDARD OF REVIEW

[¶6.] This Court's standard of review for a grant or denial of a motion for summary judgment is well settled. "In reviewing a grant or a denial of summary judgment under SDCL 15-6-56(c), we determine whether the moving party has demonstrated the absence of any genuine issue of material fact and showed entitlement to judgment on the merits as a matter of law." Janis v. Nash Finch Co., 2010 SD 27, ¶6, 780 NW2d 497, 500 (quoting Dykstra v. Page Holding Co., 2009 SD 38, ¶23, 766 NW2d 491, 496). Because the facts of this case are undisputed, the only issue here is whether the trial court committed a legal error. In considering the trial court's grant of McDowell and Dunn's motion for summary judgment, this Court "will affirm only if all legal questions have been decided correctly[.]" Gerhts v. Batteen, 2001 SD 10, ¶4, 620 NW2d 775, 777 (citing Holzer v. Dakota Speedway, Inc., 2000 SD 65, ¶8, 610 NW2d 787, 791).

ANALYSIS AND DECISION

[¶7.] Nodak argues that it has a right of subrogation against McDowell and Dunn because Dunn was not a "secured person" under North Dakota law:

A basic no-fault insurer which has paid or may become obligated to pay basic no-fault benefits under this chapter is subrogated to the extent of its obligations to all of the rights of the injured person against any person other than a secured person.

NDCC 26.1-41-16. The issue in this case, therefore, is the meaning of the term "secured person." Under either South Dakota or North Dakota law, "[s]tatutory interpretation is a question of law, reviewed de novo[,]" and "[w]ords and phrases in a statute must be given their plain meaning and effect." In re Guardianship of S.M.N., T.D.N., and T.L.N., 2010 SD 31, ΒΆ9, 781 NW2d ...


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