Morris v. Standard Oil Co.

KNIGHT, J.

The appellant herein, the Ocean Accident & Guarantee Corporation, hereinafter referred to as petitioner, has appealed from an adverse order made in a proceeding instituted by it under section 26 of the Workmen’s Compensation Act of 1917, as amended in 1919 (Stats. 1919, p. 920), to establish a lien against a judgment for damages theretofore recovered by plaintiff Milton Morris against the defendant Standard Oil Company as a result of personal injuries sustained by plaintiff through the negligent acts of one of the defendant’s employees. The lien sought was founded upon certain payments previously made by petitioner as insurance carrier for medical treatment of plaintiff.

The following facts are not disputed: In September, 1920, plaintiff, who was then thirteen years of age, while performing duties as an employee of a newspaper publishing company in Calexico, California, was struck and injured by one of defendant’s trucks. The petitioner was the eom

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pensation carrier for the publishing company and also the insurance carrier for defendant, and as compensation carrier for the publishing company furnished plaintiff with the necessary medical, surgical, and hospital treatment and paid him compensation. In January of the following year plaintiff’s attorney notified petitioner by letter of plaintiff’s intention to commence a damage suit against defendant, and asking petitioner whether it desired to have included in the demand for damages the expenditures incurred by petitioner in caring for plaintiff, amounting, as said attorney stated he had been informed, to $1,200 or $1,500. Petitioner replied that as insurer for defendant it intended to “take up the defense” of the proposed action against defendant, and as compensation carrier for the publishing company would be entitled to reimbursement under section 26 of the act above mentioned for all expenses incurred in connection with plaintiff’s injuries. Petitioner further stated that in its opinion the driver of defendant’s truck had not been negligent. About ten days after the receipt of that letter plaintiff’s attorney again wrote to petitioner stating that he was familiar with the section of the act mentioned by petitioner, and that as soon as the defendant appeared in the action he would amend his complaint so as to include as additional elements of damages the expenditures incurred by the petitioner in caring for plaintiff, and he requested that petitioner advise him at once of the amount of those expenditures. He further stated that inasmuch as petitioner would be liable for any judgment obtained against defendant, the situation regarding said expenditures would be simplified if plaintiff were released from any liability to his employer for such expenditures and that thereby the issues which would be tried by the jury would be confined to the questions of negligence and the amount of damages “for physical suffering and mental anguish”; but that if petitioner was not inclined to execute such release, to “please furnish the figures asked for,” so that the same might be included in the proposed amended complaint. Petitioner ignored this letter, and on April 5, 1921, said attorney again wrote as follows: “On Jan. 2d, 1921, I made demand on you for expenses incurred or to be incurred in this matter that the same might be included in the pleadings, but you ignored the demand. The case is set for trial on April