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Farmers Insurance Co. v. Vanwinkle

Court of Appeals of Oklahoma, Division II

April 13, 2018

FARMERS INSURANCE COMPANY and CAROL LYNCH, Plaintiffs/Appellees,
v.
CHARMIN VANWINKLE and EAGLEMED LLC, Defendants/Appellees, and CHOCTAW EMS, Defendant, and PARKLAND HEALTH & HOSPITAL SYSTEM, Defendant/Appellant.

          Mandate Issued: 05/09/2018

          APPEAL FROM THE DISTRICT COURT OF PUSHMATAHA COUNTY, OKLAHOMA HONORABLE JANA WALLACE, TRIAL JUDGE.

          Shena E. Burgess, SMILING, SMILING & BURGESS, Tulsa, Oklahoma, for Plaintiffs/Appellees.

          Gerald C. Dennis, Antlers, Oklahoma, for Defendant/Appellee Charmin VanWinkle.

          Douglas Turek, THE TUREK LAW FIRM, PC, The Woodlands, Texas, for Defendant/Appellant.

          P. THOMAS THORNBRUGH, CHIEF JUDGE

         ¶1 Parkland Health & Hospital System (Parkland) appeals a decision of the district court apportioning pro rata the proceeds of an insurance settlement between injured party Charmin VanWinkle [1] and lienholder Parkland. On review, we reverse the decision of the district court and remand with directions.

         BACKGROUND

         ¶2 This appeal has its roots in an automobile accident between VanWinkle and Carol Lynch in Hugo, Oklahoma. VanWinkle sustained injuries, and was transported to Parkland Hospital in Dallas. Parkland filed a Texas hospital lien (the Parkland lien) of $191, 922 for treatment. VanWinkle alleged some $200, 000 in damages. Lynch carried $25, 000 in liability insurance with Farmers Insurance Company (Farmers). Farmers and Lynch filed an interpleader action in district court, seeking to interplead the $25, 000 and have the court distribute it. Parkland argued that, as a medical lien claimant, it has a statutory priority of payment over VanWinkle. The court split the $25, 000 over the objection of Parkland as follows: $11, 666 to VanWinkle; $11, 194 to Parkland; and $2, 139 to the ambulance provider, EagleMed LLC. The claim and award of funds to the ambulance provider is not disputed.

         STANDARD OF REVIEW

         ¶3 An interpleader proceeding is essentially equitable in nature. "[W]here the request for interpleader is approved, the questions to be considered are equitable in nature." Welch v. Montgomery, 1949 OK 80, ¶ 11, 205 P.2d 288. Equitable decisions are reviewed for abuse of discretion. "An abuse of discretion occurs when a decision is based on an erroneous conclusion of law or where there is no rational basis in evidence for the ruling." Spencer v. Oklahoma Gas & Elec. Co., 2007 OK 76, ¶ 13, 171 P.3d 890 (emphasis omitted). Here, our review may encompass both claims of legal error and claims of the lack of an evidentiary basis for the court's decision. We review the district court's conclusions of law de novo. Nat'l Diversified Bus. Servs., Inc. v. Corporate Fin. Opportunities, Inc., 1997 OK 36, n. 18, 946 P.2d 662.

         ANALYSIS

         ¶4 An initial oddity that presents itself is that Farmers' motion appears to be some form of "conditional interpleader" made on behalf of more than one party. In a traditional interpleader action, the plaintiff is a mere disinterested stakeholder, and the contest is strictly between the claimants to the fund. Magnolia Petroleum Co. v. Ouart, 1947 OK 117, 192 P.2d 698. The plaintiff has no interest in the relative merits of the parties or the disposition, and merely seeks to avoid liability for distributing the funds to the wrong party or the expense of participating in the litigation of such claims. [2] In this petition, however, the same counsel was apparently representing both Farmers Insurance and tortfeasor Carol Lynch, and both were listed as plaintiffs. Because of this, the petition sought not to simply implead the funds, but stated that Farmers was only prepared to implead provided that both the injured party and the medical lienholders would release tortfeasor Lynch from any further liability resulting from the collision.

         ¶5 The petition appears to meet none of the traditional requirements of interpleader because the interpleader was not disinterested, there had been no settlement, and there had been no adjudication of liability. Although the record indicates that VanWinkle did settle with Lynch more than three months after the interpleader was filed, we think it quite clear that the proper procedure is to first obtain a settlement, and then ...


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