                  This opinion is subject to revision before final
                       publication in the Pacific Reporter

                                    2017 UT 69


                                     IN THE
        SUPREME COURT OF THE STATE OF UTAH

              EVERETT P. WILSON JR. and DARLA WILSON,
                            Respondents,
                                        v.
            EDUCATORS MUTUAL INSURANCE ASSOCIATION,
                          Petitioner.


                              No. 20160227
                        Filed September 28, 2017


              On Certiorari to the Utah Court of Appeals

                       Fourth District, Provo
                  The Honorable Samuel D. McVey
                          No. 110400083

                                  Attorneys:
 Randall R. Smart, Jeffrey A. Callister, Chad P. Curtis, Salt Lake City,
                             for petitioner
      Jack C. Helgesen, Craig Helgesen, Layton, for respondents
     Thomas M. Regan, Leslie A. Hulburt, San Diego, California,
                        for amicus curiae

  ASSOCIATE CHIEF JUSTICE LEE authored the opinion of the Court, in
  which CHIEF JUSTICE DURRANT, JUSTICE DURHAM, JUSTICE HIMONAS,
                     and JUSTICE PEARCE joined.


   ASSOCIATE CHIEF JUSTICE LEE, opinion of the Court:
  ¶ 1 In this case we consider a subrogation action filed by
Educators Mutual Insurance Association (EMIA) against a tortfeasor in
                            WILSON v. EMIA
                          Opinion of the Court
a personal injury case. The court of appeals dismissed for lack of
standing. It held that an insurer may sue for subrogation only in the
name of its insured, not in its own name. We reverse on the basis of the
terms of the insurance policy in question, which expressly recognize
EMIA’s authority “to pursue its own right of Subrogation against a
third party” without regard to whether the insured “is made whole by
any recovery.”
                                    I
   ¶ 2 This case arises out of a tragic accident. On September 19,
2010, Jessica Wilson was hit by a car while crossing the street. She died
within hours of the accident, after incurring more than $100,000 in
medical expenses. Her insurance provider, EMIA, covered $78,692.34 of
those expenses.
    ¶ 3 Four months later Wilson’s parents brought a wrongful death
claim against the driver. The parties agreed to settle the case. The
Wilsons agreed to dismiss their claims against the driver in exchange
for payment of his insurance policy limits ($100,000).
    ¶ 4 Before the settlement became final, EMIA brought a separate
subrogation suit in its own name against the driver for the medical
expenses it paid on the decedent’s behalf. Recognizing the competing
claims in the two cases, all parties agreed to consolidate them. The
driver’s insurer subsequently interpleaded the $100,000 policy limits.
But EMIA and the Wilsons disputed how to allocate the funds.
   ¶ 5 Following a hearing on that issue, the district court awarded
$24,182.31 of the interpleaded funds to EMIA and the remaining
$75,817.69 to the Wilsons. Both parties appealed the allocation. The
Wilsons claimed that EMIA was not entitled to any of the interpleaded
funds. EMIA countered that it was entitled to a full reimbursement of
the coverage it provided for the decedent.
   ¶ 6 The court of appeals dismissed EMIA’s case on standing
grounds. It found no basis in the Utah code or in our case law for an
“independent right . . . for an insurer to seek subrogated damages in its
own name.” Wilson v. Educators Mut. Ins. Ass’n, 2016 UT App 38, ¶ 8,
368 P.3d 471. First, it noted that Utah Code section 31A-21-108 provides
only that “[s]ubrogation actions may be brought by the insurer in the
name of its insured.” Id. Second, it cited our decision in Johanson v.
Cudahy Packing Co., 152 P.2d 98 (Utah 1944), for the proposition that “‘it
has been generally held that a suit at law to enforce [a] right of
subrogation must, at common law, be brought in the name of the


                                    2
                            Cite as: 2017 UT 69
                           Opinion of the Court
insured, rather than by the insurance company in its own name and
right.’” 2016 UT App 38, ¶ 10 (quoting Johanson, 152 P.2d at 104)).
    ¶ 7 We agreed to hear the case on EMIA’s petition for writ of
certiorari. And we review the court of appeals’ decision de novo. State v.
Ramirez, 2012 UT 59, ¶ 7, 289 P.3d 444.
                                     II
    ¶ 8 The parties have briefed a range of issues addressed to the
two principal grounds for the court of appeals’ decision. They offer
differing views of the inference to be drawn from Utah Code section
31A-21-108, and opposing constructions of our opinion in Johanson.
They also disagree about the scope and applicability of the “made-
whole” doctrine—a principle at least sometimes requiring an insurer to
make an insured “whole” before asserting a right of subrogation
against a third party, and thus protecting against claim-splitting. See
Johanson, 152 P.2d at 104; Nat’l Union Fire Ins. Co. v. Denver & R.G.R. Co.,
137 P. 653, 656 (Utah 1913).
   ¶ 9 EMIA also advances an alternative basis for its standing to sue
for subrogation in its own name: the express terms of its insurance
policy. In EMIA’s view the terms of the policy obviate many of the
other issues presented in the case. EMIA notes that the policy
recognizes an express right of subrogation regardless of whether the
insured “is made whole by any recovery.” And it accordingly asserts
that it has standing to sue for subrogation as a matter of contract—and
separate and apart from the existence of a right of equitable
subrogation under our case law.
    ¶ 10 We agree and reverse on that basis. First we clarify the
relationship between a right of subrogation set forth expressly in the
terms of a contract and a right of “equitable subrogation.” Then we
explain the basis for our decision that EMIA has standing to assert a
subrogation claim under the express terms of the insurance policy in
question.
                        A. Equitable Subrogation
    ¶ 11 Equitable subrogation is a creature of the common law. The
case law in this field identifies circumstances in which we deem it fair
or equitable to “allow[] a person or entity [that] pays the loss or satisfies
the claim of another under a legally cognizable obligation or interest to
step into the shoes of the other person and assert that person’s rights.”


                                     3
                              WILSON v. EMIA
                           Opinion of the Court
State Farm Mut. Auto. Ins. Co. v. Nw. Nat’l Ins. Co., 912 P.2d 983, 985
(Utah 1996) (citation omitted).
    ¶ 12 The law of equitable subrogation has long been extended to
the field of insurance. Our cases recognize the right of an insurer to step
into its insured’s shoes and assert the insured’s rights when the insurer
satisfies a claim on the insured’s behalf. See Bd. of Ed. of Jordan Sch. Dist.
v. Hales, 566 P.2d 1246, 1247 (Utah 1977). A common application of that
principle of equitable subrogation is in the circumstance at issue here.
When an insurer pays medical expenses arising from an accident
covered by an insurance policy the insurer may seek recovery of those
expenses from a third-party tortfeasor—by stepping into the covered
person’s shoes and asserting a claim against the tortfeasor. See Educators
Mut. Ins. Ass’n v. Allied Prop. & Cas. Ins. Co., 890 P.2d 1029, 1031 (Utah
1995). In Utah that principle is also reaffirmed by statute—in Utah
Code section 31A-21-108, which states that “[s]ubrogation actions may
be brought by the insurer in the name of its insured.”
    ¶ 13 The law of equitable subrogation places limits or conditions
on the insurer’s right of subrogation. One of those conditions is the
“made-whole” principle, which states that an insurer is at least
sometimes required to fully compensate its insured for any losses
before it asserts a claim for subrogation. Hill v. State Farm Mut. Auto.
Ins. Co., 765 P.2d 864, 866 (Utah 1988), overruled on other grounds by
Sharon Steel Corp. v. Aetna Cas. & Sur. Co., 931 P.2d 127 (Utah 1997). That
principle is aimed at advancing a number of policies, including the goal
of avoiding “claim-splitting.” See Johanson, 152 P.2d at 103–04.
           B. Subrogation by the Express Terms of a Contract
    ¶ 14 The Wilsons cite the above principles in support of the
dismissal of EMIA’s subrogation claim on standing grounds. They find
a negative implication in Utah Code section 31A-21-108—a notion that
subrogation actions may be brought only in the name of an insured.
And they claim that EMIA’s subrogation action runs afoul of the
“made-whole” doctrine in light of their allegation that they have not
yet been compensated fully for their losses. Lastly, the Wilsons, like the
court of appeals, contend that the Johanson case forecloses EMIA’s
subrogation action in the dictum that “‘it has been generally held that a
suit at law to enforce [a] right of subrogation must, at common law, be
brought in the name of the insured, rather than by the insurance
company in its own name and right.’” Johanson, 152 P.2d at 104.
   ¶ 15 The Wilsons’ statutory argument overreads section 31A-21-
108. This provision, in context, reinforces a general principle of

                                      4
                           Cite as: 2017 UT 69
                          Opinion of the Court
equitable subrogation. It states that “[s]ubrogation actions may be
brought by the insurer in the name of its insured.” UTAH CODE § 31A-
21-108. That statement is significant because it reverses the general
presumption that a person or entity has a right to sue only in its own
name. Shelledy v. Lore, 836 P.2d 786, 789 (Utah 1992) (“The general rule
is that a litigant ‘must assert his own legal rights and interests, and
cannot rest his claim to relief on the legal rights or interests of third
parties.’” (quoting Warth v. Seldin, 422 U.S. 490, 499 (1975))). Yet the
converse point would not be necessary. We don’t need a statute to tell
us that an insurance company has a right to sue in its own name. And
such a right, if it exists as a matter of the law of subrogation, should not
be deemed eliminated by the recognition of a right of the insurer to sue
in the name of the insured.
    ¶ 16 The court of appeals accepted this reading for the sake of
argument. It assumed “that the statute’s use of the permissive ‘may’
allows for the possibility that bringing an action in the name of the
insured is not the exclusive manner for an insurer to pursue a
subrogation claim.” Wilson v. Educators Mut. Ins. Ass’n, 2016 UT App 38,
¶ 8, 368 P.3d 471. But it then stated that “there must be some legal
basis” for an “insurer to bring the action in its own name” and
ultimately concluded that “no independent right exists” in the law of
equitable subrogation. Id. This holding was rooted in our case law—in
the above-cited notion that “‘it has been generally held that a suit at law
to enforce [a] right of subrogation must, at common law, be brought in
the name of the insured,’” “with the possible exception of an insurer
who has fully indemnified the insured for all damages for which the
wrongdoer could be held liable.” 2016 UT App 38, ¶¶ 8, 10 (quoting
Johanson, 152 P.2d at 104).
    ¶ 17 This overreads our opinion in the Johanson case. The quoted
language, at most, is dicta describing common law standards in other
states. See Johanson, 152 P.2d at 104 (quoting A.L.R. annotation referring
to case law in twenty-four other jurisdictions). Our Johanson opinion
did not establish a legal prohibition against an insurer filing a
subrogation action in its own name. The right at issue in Johanson was
the right of the insured’s dependents to bring a claim against the
tortfeasor after the insurance company refused to bring its claim. See id.
(“When the insurance carrier declined to bring its action and executed a
waiver thereof, the dependents were not compelled to forego suit. They
have an interest in the recovery and can bring suit to enforce it.”). So


                                     5
                             WILSON v. EMIA
                           Opinion of the Court
we were in no position in that case to establish a legal prohibition of the
sort embraced by the court of appeals.
    ¶ 18 In Johanson and elsewhere, our cases do make reference to the
“made-whole” principle—and the related rule against claim-splitting.
See id.; Hill, 765 P.2d at 866; State Farm Mut. Auto. Ins. Co. v. Green, 2003
UT 48, ¶ 34, 89 P.3d 97. As the court of appeals indicated, we have long
referred generally to a defendant’s common-law right not to “be sued
twice for the same wrong.” Johanson, 152 P.2d at 104. But the court of
appeals’ application of these principles here misses the important
distinction between an equitable right of subrogation established by case
law and a private right of subrogation established by contract. The made-
whole principle—and the claim-splitting corollary—arise as a matter of
our common law of equitable subrogation. Yet we have long held that
these principles “can be modified by contract.” Hill, 765 P.2d at 866.
              C. EMIA’s Standing to Sue in its Own Name
    ¶ 19 An insurer and an insured may agree to contract away the
requirements of the common law of equitable subrogation. They may
provide in an insurance policy that the insured need not be made
whole before the insurer may sue for subrogation, or in other words
that the claim may be split by a subrogation claim being asserted before
the insured is fully compensated. And that is precisely what the policy
in question here provided. It recognized EMIA’s authority “to pursue
its own right of Subrogation against a third party” without regard to
whether the insured “is made whole by any recovery.” It is difficult to
imagine a clearer statement of EMIA’s authority to sue for subrogation
in its own name and without regard to full “make-whole”
compensation for the Wilsons.
   ¶ 20 We are not unsympathetic of the Wilsons’ concerns about the
inefficiencies of claim-splitting. But EMIA reserved the right to sue for
subrogation in its own name, even in a circumstance in which the
Wilsons have not been made whole. And that right preserved the
prospect of separate suits against the tortfeasor (the driver of the car
that killed the Wilsons’ daughter).
    ¶ 21 Yet the Wilsons (and the driver) are not without recourse for
this inefficiency. Our rules of procedure embrace principles of joinder
and consolidation. See UTAH R. CIV. P. 19, 20, & 42. So if the driver had
been subject to two separate suits—one by EMIA and one by the
Wilsons—then the answer to the claim-splitting problem presumably
would have been the consolidation of the two cases under rule 42. And
that is effectively what has happened here. EMIA was not formally

                                     6
                          Cite as: 2017 UT 69
                          Opinion of the Court
joined in the initial action by the Wilsons against the driver; instead it
filed a separate suit. But the two cases were consolidated, so the typical
downsides of claim-splitting are simply not presented here.
                                   III
    ¶ 22 We uphold EMIA’s standing to sue for subrogation in its own
name under the terms of the insurance policy. In so doing we do not
reach other matters briefed but not decided by the court of appeals,
such as whether EMIA’s claim is somehow barred by Utah Code
section 78B-3-107, and whether the district court erred in its allocation
of the interpleaded funds.
   ¶ 23 And we remand the case to the court of appeals for further
proceedings consistent with this opinion. In so doing we leave it to the
parties and the court of appeals to identify any issues that remain for
decision after our resolution of the matters presented for our review.




                                    7
