PUBLISHED OPINION
Case No.: 94-0160
Complete
Title
of
Case:CLIFFORD MUCHOW,
INDIVIDUALLY AND AS PERSONAL REPRESENTATIVE OF THE SUSAN B. MUCHOW ESTATE, AND
CAROL MUCHOW,
Plaintiffs-Appellants,
ELECTRONIC DATA SYSTEMS CORPORATION,
Subrogated Party-Plaintiff-
Appellant,
v.
RICHARD GODING,
AND UNITED SECURITY INSURANCE COMPANY,
AND AMERICAN FAMILY MUTUAL INSURANCE
COMPANY,
Defendants-Respondents.
Submitted
on Briefs: September 14, 1994
COURT COURT OF
APPEALS OF WISCONSIN
Opinion
Released: December 7, 1995
Opinion
Filed: December
7, 1995
Source
of APPEAL Appeal from a judgment
Full
Name JUDGE COURT: Circuit
Lower
Court. COUNTY: Rock
(If
"Special" JUDGE: John
H. Lussow
so
indicate)
JUDGES: Eich,
C.J., Gartzke, P.J., and Dykman, J.
Concurred:
Dissented:
Appellant
ATTORNEYSFor the plaintiffs-appellants the
cause was submitted on the brief of Richard R. Grant of Consigny,
Andrews, Hemming & Grant, S.C. of Janesville.
Respondent
ATTORNEYSFor the defendants-respondents,
Richard Goding and United Security Insurance Company, the cause was submitted
on the brief of Francis J. Slattery of Hughes, Mathewson, Carns &
Slattery of Oshkosh.
For the defendant-respondent, American Family Mutual Insurance
Company, the cause was submitted on the brief of Mark A. Schulz of Hunsader
& Schulz, S.C. of Janesville.
COURT OF APPEALS DECISION DATED AND RELEASED December
7, 1995 |
NOTICE |
A party may file with the Supreme Court a petition to review an
adverse decision by the Court of Appeals.
See § 808.10 and Rule 809.62,
Stats. |
This opinion is subject to further editing. If published, the official version will appear in the bound
volume of the Official Reports. |
No. 94-0160
STATE OF WISCONSIN IN
COURT OF APPEALS
CLIFFORD
MUCHOW, INDIVIDUALLY AND AS PERSONAL
REPRESENTATIVE
OF THE SUSAN B. MUCHOW ESTATE,
AND
CAROL MUCHOW,
Plaintiffs-Appellants,
ELECTRONIC
DATA SYSTEMS CORPORATION,
Subrogated Party-Plaintiff-Appellant,
v.
RICHARD
GODING,
AND
UNITED SECURITY INSURANCE COMPANY,
AND
AMERICAN FAMILY MUTUAL INSURANCE COMPANY,
Defendants-Respondents.
APPEAL
from a judgment of the circuit court for Rock County: JOHN H. LUSSOW, Judge. Affirmed
in part; reversed in part and cause remanded.
Before
Eich, C.J., Gartzke, P.J., and Dykman, J.
GARTZKE,
P.J. Clifford Muchow, individually and
as the personal representative of the Susan B. Muchow estate, and Carol Muchow,
appeal from a summary judgment entered by the Rock County circuit court
dismissing their complaint against Richard Goding, American Family Mutual Insurance
Company (American Family) and United Security Insurance Company (USIC). Electronic Data Systems Corporation (EDS), a
subrogated party-plaintiff, appeals from the same order. We affirm in part and reverse in part and
remand for further proceedings.
1. BACKGROUND AND ISSUES
The
Muchows are Susan's parents. She died
several days after an automobile accident in Dodge County in September 1988,
survived by her parents and leaving no spouse or children. Susan was a passenger in an automobile
operated by Michael Lentz and insured by Dairyland Insurance Company
(Dairyland) with limits of $25,000/$50,000.
Lentz died in the accident.
American Family had issued an underinsured motorist (UIM) policy with
$50,000/$100,000 limits to Susan. EDS
was Susan's health insurer. EDS paid
$44,930.34 for Susan's medical expenses, and it asserts a subrogation claim for
that amount. Richard Goding operated
the automobile which collided with the Lentz automobile. Richard's wife, Patricia, was injured while
a passenger in the vehicle. USIC
insured the Goding vehicle, and its liability limits are $250,000 for bodily
injuries to each person and $500,000 for each accident.
Before
stating the issues, we review the procedural history. That history involves prior actions in Fond du Lac County and the
action in Rock County which resulted in these appeals.
The
Godings brought the prior actions in 1989.
Patricia Goding commenced her action in Fond du Lac County against
Michael Lentz's insurer, Dairyland, and Richard Goding's insurer, USIC. Richard Goding commenced his actions in that
county against Dairyland. The two
actions were consolidated, and we refer to them as the prior or Fond du Lac
action.
In
early 1990, Dairyland filed a third-party complaint against the estate of Susan
Muchow in the prior action. The
third-party complaint alleged that the estate had claimed entitlement to
payment from Dairyland, the total value of all claims against Dairyland
exceeded its $25,000/$50,000 policy limits, and Dairyland was in doubt as to
which parties were entitled to the policy proceeds. Dairyland paid the $50,000 into court and prayed, among other things,
that "all other parties be required to interplead and settle among
themselves their rights" to the policy proceeds.
Attorney
Grant wrote to counsel for Dairyland, thanking him for an extension to answer
Dairyland's third-party complaint against the estate. Grant wrote,
My clients, Susan Muchow's parents and her estate, are
limited to the $25,000 single person claim limit, which would still leave
$25,000 available to the Goding family.
I am contacting the attorneys for each of the Godings to see if we can
agree and pay out that part of the case immediately.
No
other persons were made parties to the prior action. In April, all parties to the action entered a stipulation which
included a release. On April 26, 1990,
attorney Grant signed the stipulation on behalf of the estate. The trial court entered an order on the
stipulation "for Distribution of Settlement and Partial Dismissal."[1]
Nothing
in the stipulation, release or order describes whose claims (other than the
estate's) are covered by Dairyland's $25,000 payment to Susan's estate. The documents make no reference to Susan's
parents, to her health insurer, EDS, or to American Family, the UIM carrier. The estate reserved no rights. In accordance with the stipulation,
Dairyland paid $25,000 to the Muchow estate and the remaining $25,000 on its
policy limit to Patricia and Richard Goding.
How the Muchow estate disbursed its $25,000 is not of record.
In
1991 Clifford Muchow, individually and as personal representative of the
estate, Carol Muchow, and EDS, as a subrogated plaintiff, commenced this action
in Rock County against Richard Goding and USIC, his insurer, and against
American Family, the UIM carrier on the policy issued to Susan. Attorney Grant signed the complaint as
attorney for the plaintiffs. The
complaint alleges that EDS, as Susan's health insurer, is subrogated to her
rights arising out of the $44,930.34 in benefits it paid for her. Her parents alleged that they have lost her
society and companionship, she probably would have contributed to their
support, and they have suffered a pecuniary loss. They also allege they paid her funeral and related expenses, and
medical expenses.
Defendants
moved to change venue to Fond du Lac County.
The trial court denied the motion.
Defendants later moved for summary judgment dismissing the Rock County
action. When granting summary judgment
dismissing the complaint as to all defendants, the court said that all claims
should have been consolidated in the Fond du Lac action under § 895.04(3),
Stats. The court added, without further analysis, that the issues are
for the court of appeals to resolve.
This appeal followed entry of judgment dismissing the complaint.
We
deem the issues to be: (1) whether the
Fond du Lac County order bars the Rock County action because of res judicata or
collateral estoppel; (2) whether § 895.04(3), Stats., obligated the personal representative of the Susan
Muchow estate to assert in the prior action all claims arising out of her
death, including claims not belonging to the estate; (3) whether
§ 803.03(2)(a), Stats.,
obligated the personal representative in the prior action to join the parents,
EDS and American Family; (4) whether the Rock County court should have
consolidated this action with the Fond du Lac action and changed venue to Fond
du Lac County; (5) whether the release and order entered in the Fond du Lac
County action released the estate, the claims of the Muchow parents, and the
EDS claim against Godings, USIC and American Family; (6) whether factual issues
exist which must be tried between the Muchow parents, the estate and EDS, on
one hand, and American Family, on the other hand, regarding the UIM notice required
by Vogt v. Schroeder, 129 Wis.2d 3, 383 N.W.2d 876 (1986).
We
conclude that res judicata and collateral estoppel do not protect the
defendants in the Rock County action, the personal representative had no duty
to assert in the prior action all claims arising out of Susan's death, failure
to change venue and order consolidation was not error, and the estate has
abandoned its claims against Goding for Susan's conscious pain and suffering
and wage loss and its UIM claim against American Family. Whether the release and order in the prior
action discharged the parents' claims depends on the intended scope of the
release, a factual issue for the trial court.
The release does not affect EDS's claim against Goding and his
insurer. The Muchow parents never acquired
a UIM claim against American Family.
EDS's UIM claim remains intact against American Family. We therefore affirm in part and reverse in
part and remand for further proceedings.
We
issue caveats. Like the parties, we
refer interchangeably to the Muchow estate and the personal representative of
the estate. It is sometimes convenient
to refer to one or the other. We
confine our discussion to the issues directly related to the stipulation and
release and to the order dismissing the complaint. For example, we have not touched conflict of interest issues.
2. SCOPE OF REVIEW
When,
as here, the trial court rendered a summary judgment, our review is de
novo. Summary judgment must be granted
if there is no genuine issue as to any material fact and the moving party is
entitled to judgment as a matter of law.
Section 802.08(2), Stats.
3. RES JUDICATA AND COLLATERAL ESTOPPEL
Defendants
assert that the Fond du Lac order dismissing the Muchow estate's claim against
Dairyland bars this action by the parents of Susan Muchow, the personal
representative of her estate and EDS against Richard Goding and his liability
insurer, USIC, and against American Family.
Defendants assert res judicata and collateral estoppel as defenses. Whether res judicata and collateral estoppel
apply to a given set of facts is a question of law which we review de
novo. A.B.C.G. Enterprises v.
First Bank Southeast, 184 Wis.2d 465, 472, 515 N.W.2d 904, 906
(1994).
The
doctrine of res judicata makes a final judgment conclusive in all subsequent
actions between the same parties as to all matters which were or which might
have been litigated in former proceedings.
A.B.C.G. Enterprises, 184 Wis.2d at 472-73, 515 N.W.2d at
906. Res judicata applies not only to
the parties but their privies. Universal
Die & Stamping v. Justus, 174 Wis.2d 556, 562, 497 N.W.2d 797, 800
(Ct. App. 1993).
However,
Richard Goding, USIC, Goding's insurer, and American Family were not privy to
any of the plaintiffs or Dairyland.
Dairyland had no connection whatever with any of the defendants. Dairyland was the liability insurer on the
Lentz vehicle. Because the order
dismissed the claims of the Muchow estate against Dairyland, the order may be
res judicata as to the Lentz estate, but neither Dairyland nor the Lentz estate
is a party to the Rock County action.
It
is immaterial that the various defendants in the Rock County action could have
been brought into the prior action. The
fact is they were not. And because
defendants were not parties in the prior action or privy to parties in that
action, it is immaterial that various matters pertinent to defendants might
have been litigated in that proceeding, had they been made parties to it.
Collateral
estoppel may be used offensively or defensively. Offensive collateral estoppel occurs when the plaintiff seeks to
foreclose a defendant from litigating an issue the defendant has previously
litigated unsuccessfully in an action with another party. Defensive use occurs when a defendant seeks
to prevent a plaintiff from asserting a claim that the plaintiff has previously
litigated and lost against another defendant.
Michelle T. v. Crozier, 173 Wis.2d 681, 684 n.1, 495
N.W.2d 327, 328 (1993). The defendants
seek to use collateral estoppel defensively.
Defensive
collateral estoppel cannot be used here.
None of the plaintiffs has unsuccessfully litigated a claim against any
of the defendants. Even assuming that
settlement of the claims of the Muchow estate against Dairyland in the prior
action was the functional equivalent of litigation, it cannot be said that the
estate lost that litigation.
We
conclude that neither res judicata nor collateral estoppel protects the
defendants in this action.
4. DUTY TO ASSERT CLAIMS UNDER
§ 895.04(3),
Stats.
American
Family argues that § 895.04(3), Stats.,
required the personal representative of the Susan Muchow estate to assert in
the prior action all claims arising from her death, including claims not owned
by the estate. We disagree.
Section
895.04(3), Stats., provides:
If separate actions are brought for the same wrongful
death, they shall be consolidated on motion of any party. Unless such consolidation is so effected
that a single judgment may be entered protecting all defendants and so that
satisfaction of such judgment shall extinguish all liability for the wrongful
death, no action shall be permitted to proceed except that of the personal
representative.
The
application of a statute is a question of law which we resolve de novo. Kania v. Airborne Freight Corp.,
99 Wis.2d 746, 758, 300 N.W.2d 63, 68 (1981).
The "wrongful death" referred to § 895.04(3), Stats., is the statutory action in a
wrongful death which belongs to the beneficiaries designated in
§ 895.04(2).[2]
Either
the personal representative of a deceased person or the person or persons to
whom the amount recovered belongs may bring an action for the wrongful death of
that person. Section 895.04(1), Stats.
Had the personal representative of the estate of Susan Muchow brought
that action, and had other actions been brought for the same wrongful death,
§ 895.04(3) would have required consolidation of the separate
actions. However, even assuming that
Dairyland's third-party complaint against the estate should be treated as an
action brought by the personal representative for the wrongful death of Susan,
because no other actions for her wrongful death were brought, § 895.04(3)
does not apply.
Nothing
in § 895.04(3), Stats.,
requires consolidation of actions other than separate actions brought for
wrongful death. For that reason,
§ 895.04(3) does not compel a personal representative to bring actions on
claims belonging to others arising out of the death of a deceased person.
5. JOINDER UNDER § 803.03(2)(a), Stats.
Section
803.03(2)(a), Stats., provides in
pertinent part:
A party asserting a claim for affirmative relief shall
join as parties to the action all persons who at the commencement of the action
have claims based upon subrogation to the rights of the party asserting the
principal claim, derivation from the principal claim, or assignment of part of
the principal claim.
It
is difficult to describe the estate as a "party asserting a claim for
affirmative relief" in the prior action.
The estate did not commence an action.
It was made an involuntary party to the Fond du Lac County action by
Dairyland's third-party complaint.
Assuming,
however, that § 803.03(2)(a), Stats.,
compelled the estate to comply within the prior action, Susan had incurred
medical expenses, and her claim for her expenses passed to the estate by virtue
of the survival statute, § 895.01, Stats. But when EDS paid Susan's medical expenses
it became subrogated to her claim to the extent EDS paid her expenses. Consequently, assuming that
§ 803.03(2)(a) imposed an obligation on the estate in the prior action to
join as parties all persons subrogated to the rights of Susan which passed to
the estate, it should have named EDS as a party.
The
estate did not do so, and the question is whether that leaves the defendants
with a just complaint. We conclude it
does not. EDS does not object that it
was not joined. The defendants have
shown no present harm to them from failure to join EDS.
American
Family does not yet have a subrogation claim.
Payment is the sine qua non for subrogation. See Vogt v. Schroeder,
129 Wis.2d at 17 n.6, 19, 22 n.9, 383 N.W.2d at 882, 882, 883. As the Vogt court said, if a
UIM insurer "wishes to protect its right of subrogation, it must make
payment to the insured of its obligation under the policy in respect to
underinsurance, and ... make payment of the underinsurance coverage
under the policy." Id.
at 26, 383 N.W.2d at 885. (Emphasis
added.) Having paid nothing on its UIM
coverage, American Family presently holds nothing by way of subrogation, and
joinder of that company was unnecessary under § 803.03(2)(a), Stats.
The
Muchow parents have an independent claim based upon the wrongful death of their
daughter. Their claim is separate and
distinct from the claims of the estate to which Susan's claims have passed
under the survival statute, § 895.01, Stats. Weiss v. Regent Properties, Ltd.,
118 Wis.2d 225, 233, 346 N.W.2d 766, 770 (1984). Therefore, the parents' wrongful death claim does not require
their joinder under § 803.03(2)(a), Stats. Section 803.03(2)(a) does not require the
parents' joinder because their other claims are for medical expenses EDS did
not pay and for funeral expenses and claims which are not derived from the
principal claim of the estate.
We
conclude that summary judgment dismissing the complaint cannot be predicated on
failure to join parties in the prior action under § 803.03(2)(a), Stats.
6. CONSOLIDATION AND CHANGE OF VENUE
The
Rock County court denied the defendants' motion to consolidate this action with
the action in Fond du Lac County and to change venue to that county. The court said it was not satisfied that the
change of venue and consolidation were necessary in the interest of justice or
for the convenience of the parties or witnesses pursuant to § 801.52, Stats., or that it would be conducive
to expedition or economy or furtherance of convenience or to avoid prejudice
under § 805.05(2), Stats.,
"particularly in light of defense counsel informing the court that the
Fond du Lac County action has now been settled and resolved."
Section
801.52, Stats., provides that the
court may change the venue to any county in the interest of justice or for the
convenience of the parties or witnesses.
Section 805.05(1), Stats.,
provides in substance that the court may consolidate actions. Both statutes vest the trial court with
discretion. We review a discretionary
ruling to determine whether the court exercised its discretion on the basis of
facts of record and employed a reasonable rationale in accordance with the
law. Hartung v. Hartung,
102 Wis.2d 58, 66, 306 N.W.2d 16, 20 (1981).
The
prior action had been dismissed long before the defendants moved for
consolidation. When a trial court
declines to consolidate an action with another which no longer exists, surely
the court properly exercises its discretion.
Because the Muchow parents reside in Rock County, the Godings reside in
Fond du Lac County, the accident happened in Rock County, the deceased was
hospitalized and died in Dane County and her estate is administered in Rock
County, whether to retain venue in Rock County or change it to Fond du Lac
County is a toss up. The trial court
did not erroneously exercise its discretion when it declined to change venue to
Fond du Lac County.
7. RELEASE AND ORDER
The
defendants assert that the release and order in the Fond du Lac action released
the claims of the Muchow estate, the Muchow parents and EDS against the
Godings, USIC and American Family. We
agree in part.
A. General Principles
The
effect of a release of a claim against a particular person is a question of
law. Before addressing that question,
however, a court must determine the intended scope of the release and
instruments related to it. Brown
v. Hammermill Paper Co., 88 Wis.2d 224, 237, 276 N.W.2d 709, 715
(1979). The stipulation contains the
release, and because the order dismissing the claim of the Muchow estate
against Dairyland implements the release, resolving the intended scope of the
release resolves the scope of the order.
Intent
is a fact seldom determinable on summary judgment. Lecus v. American Mut. Ins. Co. of Boston, 81
Wis.2d 183, 190, 260 N.W.2d 241, 244 (1977).
When a party's intent is the issue, "summary judgment is generally
inappropriate." State v.
Better Brite Plating Inc., 160 Wis.2d 809, 824, 466 N.W.2d 239, 247
(Ct. App. 1991). The Brown
court affirmed the trial court's order denying summary judgment because factual
findings were required involving the intended scope of the release. Brown, 88 Wis.2d at 238, 276
N.W.2d at 715.
At
common law, the unqualified release of one joint tortfeasor releases all joint
tortfeasors. Brown, 88
Wis.2d at 232, 276 N.W.2d at 712.
Notwithstanding the common law rule, the intended scope of the release
is a factual issue which must be resolved, even if the release given to one
joint tortfeasor fails to reserve rights against other joint tortfeasors. Brown, 88 Wis.2d at 237, 276
N.W.2d at 715. That intent must be
resolved by the fact-finder. Id.
at 238, 276 N.W.2d at 715.
B. Estate's Claims Against
Goding, USIC
and American Family
So
far as is material to this appeal, the stipulation recited that the parties to
it "are attempting to arrive at a settlement with respect to the claims of
... the estate of Susan B. Muchow against Dairyland ...." It recited that upon payment of $25,000 to
the Muchow estate and attorney Grant, and upon payment of $25,000 to Patricia
and Richard Goding and their attorneys,
[T]he said parties receiving payment hereby release
Dairyland Insurance Company and/or the estate of Michael S. Lentz from any
claims in the above-captioned matter ... and that the Court may enter an order
approving the stipulation and dismissing as parties to this action Dairyland
Insurance Company and the estate of Susan B. Muchow....
The
stipulation failed to specify the nature of the "claim" or
"claims" of the Muchow estate against Dairyland. However, the claims for Susan's conscious
pain and suffering[3] and her wage
loss belong to her estate by virtue of the survival statute, § 895.01, Stats.
Weiss, 118 Wis.2d 233, 346 N.W.2d at 770.
Shortly
before the scheduled trial date and before the order granting summary judgment
dismissing the complaint in the Rock County action, attorney Grant wrote to the
trial court:
One of the claims made by the Plaintiffs in this action
is recovery for the estate of Susan B. Muchow.
We have determined that we made a sufficient and appropriate recovery
for the estate in the Fond du Lac County case and thus we will not, in the Rock
County case, be pursuing any further claim on behalf of the estate.
Although
the record contains no order dismissing the estate on the basis of Grant's
letter, the only reasonable construction of the letter is that the Muchow
estate has abandoned its claims in the Rock County action against Goding and
his insurer. Because the letter advises
the court that the estate had made a sufficient and appropriate recovery in the
Fond du Lac action, the estate concedes that it has no UIM claim against
American Family.
We
affirm dismissal of the estate's complaint against Goding, USIC and American
Family.
C. Parents' Claims Against
Goding and USIC
The
wrongful death claim belongs to the Muchow parents as the appropriate beneficiaries
specified in § 895.04(2), Stats. An action for wrongful death belonging to
the beneficiaries "is separate and distinct from the survival action"
under § 895.01, Stats.,
belonging to the estate. Weiss,
118 Wis.2d at 233, 346 N.W.2d at 770.
The
personal representative could have brought an action for Susan's wrongful death
under § 895.04(1), Stats.,
and had it done so, it would have acted as agent for the parents. Weiss, 118 Wis.2d at 230-31,
346 N.W.2d at 768-69. But nothing in
the stipulation, release or order tells us such is the case. As we have said, the settlement documents
fail even to refer to the Muchow parents.
Whether the personal representative intended to settle the wrongful
death action as agent for the Muchow parents, and they intended that he act as
agent, and whether the intended scope of the release bars the parents' action
against Goding as a joint tortfeasor, are issues of fact for the trial court to
resolve on remand.[4]
The
Muchow parents seek damages not only for loss of Susan's society and
companionship but also for their pecuniary loss caused by her death. The personal representative could have
brought an action for those damages.
Section 895.04(1) and (4), Stats. Had he done so, because the claim for
pecuniary loss belongs to the parents rather than the estate, the personal
representative would have acted as agent for them. Weiss, 118 Wis.2d at 232-33, 346 N.W.2d at 769
(estate cannot recover on its own behalf damages for pecuniary loss). Again, nothing in the stipulation or release
shows that the personal representative acted as agent for the Muchow parents to
assert the pecuniary loss claim, and whether that was the intent is for the
trial court to determine on remand.
The
Muchow parents allege they paid medical expenses on behalf of Susan and her
funeral bill. They own the claim for
those expenses. Section 895.04(5), Stats., authorizes the personal
representative of Susan's estate to recover the reasonable cost of medical expenses
and her funeral on behalf of the parents.
But whether the personal representative intended to settle the claim for
those expenses is a factual issue for the trial court. The values of those claims may be facts for
the court to consider when determining that intent.
We
conclude that the trial court erred when it dismissed the complaint of Susan's
parents against Goding and USIC, his insurer.
D. EDS Subrogation Claim
Against Goding and USIC
We
turn to the defendants' argument that the release bars the subrogation claims
of EDS. We conclude it does not.
Because an insured and a subrogated insurer each own
separately part of the claim against the tortfeasor, a settlement or recovery
by the insured operates only to satisfy a part of the claim owned by the
insured. Because only the part of the
claim owned by the insured is satisfied, the part of the claim owned by the
subrogated insurer remains unsettled and may be sued upon by the subrogated
insurer.
Blue Cross v. Fireman's Fund, 140 Wis.2d 544, 549, 411 N.W.2d 133, 134-35 (1987).
The
supreme court modified Blue Cross in Schulte v. Frazin,
176 Wis.2d 622, 637, 500 N.W.2d 305, 310-11 (1993). However, Blue Cross "still applies when a
plaintiff and tortfeasor settle without involving the subrogated insurer and
without submitting the issue of the subrogated insurer's rights to the circuit
court." Schulte, 176
Wis.2d at 635, 500 N.W.2d at 310. The
Muchow estate and Dairyland settled without involving EDS and without
submitting the issue of EDS's rights to the Fond du Lac County court. Consequently, Blue Cross
applies, and the estate's settlement with Dairyland does not affect EDS's
subrogation rights.
We
conclude that the trial court erred by dismissing EDS's subrogation claim
against Goding and USIC.
E. American Family UIM
Coverage
American
Family asserts that it had no knowledge and did not consent to the settlement
in the prior action, and therefore the plaintiffs have forfeited its UIM
coverage. The Vogt court
held that an insured's acceptance of policy limits from an insurer and the
insured's release of the tortfeasor which invalidates a UIM carrier's
subrogation against the tortfeasor will cause the insured to lose its UIM
coverage. 129 Wis.2d at 25, 383 N.W.2d
at 885. The Vogt court
outlined a procedure to protect the UIM carrier's subrogation rights and yet
permit partial settlements so that the injured person may receive at least some
compensation at an early stage. The
procedure includes notice to the UIM insurer of a proposed settlement and
giving the insurer the opportunity to protect its potential subrogation rights when
it pays UIM benefits before the insured releases the tortfeasor. Id. at 20-21, 383 N.W.2d at
883.
We
need not review the notice issue. The
estate has abandoned its claims, including its UIM claim. Susan's parents have no UIM rights against
American Family. Susan's UIM right
arose from her contract with American Family.
Her UIM rights passed to her estate and not to her parents. EDS's subrogation claim is unaffected by the
settlement in the prior action, as we have explained. It follows that if the Vogt procedure was not
followed, that does not affect the subrogation rights of EDS against American
Family on the latter's UIM coverage.
We
conclude that the trial court properly dismissed the complaint by the estate
and the Muchow parents against American Family. It erred when it dismissed the complaint against American Family
by EDS.
8. CONCLUSION
To
recapitulate our disposition, the trial court properly dismissed the complaint
of the Muchow estate. It erred by
dismissing the complaint of the Muchow parents against Goding and his
insurer. Whether the complaint should
ultimately be dismissed as the parents' complaint against those defendants will
turn on the court's factual findings on the intent of the personal
representative and the parents regarding settlement of the parents' claims.
The
trial court properly dismissed the complaint of the estate against American
Family, the estate having abandoned its claims. It properly dismissed the complaint of the Muchow parents against
American Family, since they have no UIM rights. The trial court should not have dismissed the EDS claims against
American Family, because the claims of EDS are unaffected by the settlement in
the prior action.
By
the Court.—Judgment affirmed
in part, reversed in part and cause remanded for further proceedings.
[T]he Clerk of Courts shall distribute the $50,000.00
held by its office as set forth herein, and all claims of relief and causes of
action on the part of any party against Dairyland Insurance Company and/or the
Estate of Michael S. Lentz and the claims of third party plaintiffs Dairyland
Insurance Company against third party defendant, Estate of Susan B. Muchow are
hereby dismissed on the merits, without further notice or cost to any party
without prejudice to any claims of Patricia A. Goding and/or Richard Goding
against United Security Insurance Company with respect to the accident of September
25, 1988, under the liability coverage provisions and/or the underinsured
motorist policy provisions of the United Security Insurance Company policy
insuring the Goding automobile on the date of the accident of September 25,
1988.
[2] See Truesdill v. Roach,
11 Wis.2d 492, 497-98, 105 N.W.2d 871, 874 (1960) (Section 331.04(3), Stats., 1959 [now § 895.04(3), Stats.] must be read with
§ 331.04(1), Stats., 1959
[now § 895.04(1)], which refers to the "person to whom the amount
recovered belongs" and that person or persons are designated in
§ 331.04(2), Stats., 1959,
[now § 895.04(2)]).
[3] Counsel for American Family submitted his
affidavit incorporating a letter by a physician. The letter states, "There is no reason to believe that Susan
suffered from conscious pain or suffering during her hospitalization
...." Section 802.08(3), Stats., provides that affidavits
supporting a motion for summary judgment "shall set forth such evidentiary
facts as would be admissible in evidence." The physician's letter is hearsay evidence and is inadmissible in
evidence. We disregard it.