Palmer H. RIMES and Patricia A. Rimes, Plaintiffs-Respondents, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant-Appellant.
No. 81-387
Supreme Court of Wisconsin
Argued November 30, 1981. — Decided March 2, 1982.
Motion for reconsideration denied, with costs, on May 3, 1982.
106 Wis. 2d 263 | 316 N.W.2d 348
HEFFERNAN, J. CECI, J., took no part.
For the respondents there was a brief by Edward Grutzner and Grutzner, Byron & Holland, S.C., of Beloit, and oral argument by Edward Grutzner.
The court found, after a post-settlement trial to the court, that Palmer and Patricia Rimes sustained damages in the amount of $300,433.54 and that the settlement
“In this case the plaintiff [s] settled their claims for $125,000.00. The Court has found that their damages far exceeded this sum. The settlement did not make the plaintiffs whole . . . .
“Since the plaintiffs have not been made whole by the settlement, the insurer may not share in the amount recovered through settlement from the tort-feasors.”
The exact facts of the underlying automobile accident are of no particular importance at this stage of the proceedings. Suffice it to say that Palmer Rimes, who was traveling alone in his vehicle, insured with State Farm Mutual, came upon the scene of an accident in which a car driven by Peggy L. Stiles had rear-ended a vehicle driven by Roy A. Langdon. Because Rimes thought there might be injured persons in the vehicles in need of assistance, he was examining the Stiles vehicle when a car driven by Leonard A. Switzer struck the Stiles vehicle, causing severe injuries to Rimes.
The injured Rimes and his wife commenced an action in the circuit court for Rock County against the drivers of the three other vehicles involved in the accident and their insurers. Switzer was insured by Travelers Indemnity for the sum of $300,000. Stiles was insured by American Family Insurance Company in the amount of $50,000, as was Langdon. State Farm, Rimes’ own liability insurance company, was joined as a defendant because of its possible subrogation rights as the result of payments under the medical-pay provisions of two separate automobile policies, one issued to Rimes and one
“Upon payment . . . the company shall be subrogated to the extent of such payment to the proceeds of any settlement or judgment that may result from the exercise of any rights of recovery which the injured person . . . may have against any person . . . and such person shall execute and deliver instruments and papers and do whatever else is necessary to secure such rights. Such person shall do nothing after loss to prejudice such rights.”
Upon payment under the medical-pay provisions, Palmer H. Rimes signed subrogation receipts covering the payment of $9,649.90. The receipts provided:
“It is further warranted that no settlement has been made by the undersigned with any person or corporation against whom a claim may lie, and no release has been given to any one responsible for the loss, and that no such settlement will be made nor release given by the undersigned without the written consent of the said insurer, and the undersigned covenants and agrees to cooperate fully with said insurer in the prosecution of such claims and to procure and furnish all papers and documents necessary in such proceedings and to attend court and testify if the insurer deems such to be necessary.”
State Farm attempted to enter into stipulations with the alleged tortfeasor-defendants to protect its subrogation rights but was unsuccessful in that attempt, and it filed an answer alleging its subrogation rights and participated in the case.
Immediately prior to the commencement of trial to a jury on January 21, 1980, the defendant Langdon and his insurance company, American Family, were dismissed with prejudice by a stipulation of all parties. On
“That the defendant, State Farm Mutual Automobile Insurance Company, has a subrogation interest in recovery of those medical bills and expenses as a result of the payments made under the medical pay provisions of certain insurance policies . . . .”
The stipulation further provided:
“That should a judgment be rendered or a settlement be agreed upon between the parties which grants recovery of those medical bills and expenses, that the defendant, State Farm Mutual Automobile Insurance Company, shall recover the amounts paid under the medical pay provisions of its insurance policies as evidenced by the subrogation receipts . . . to the extent that such amounts are recovered by the plaintiff, Palmer A. Rimes.”
On the second day of the trial, Rimes and his wife settled all of their claims with the remaining defendants for the sum of $125,000. American Family paid $50,000, its policy limits, on behalf of Stiles; and Travelers paid $75,000 of its $300,000 policy limit on behalf of Switzer. The stipulation provided that of the $75,000 paid by Travelers, $65,350.10 was paid directly to the plaintiffs and their attorneys, and $9,649.90 was paid into court to be held in escrow pending the outcome of a “trial” to the court concerning State Farm‘s claimed subrogation rights for the medical payments theretofore made on behalf of Rimes. The stipulation and order was signed by all parties, including State Farm. Included in its recitations was the provision:
“This action is fully settled as to all claims for relief and all cross claims by all parties, except as specifically otherwise provided by this order.”
The stipulation and the order entered by the court contained the further provision:
“This action shall remain pending only insofar as a dispute exists between the plaintiffs, Palmer H. Rimes and Patricia A. Rimes, and defendant, State Farm Automobile Insurance Company, regarding the claims of State Farm Automobile Insurance Company and Palmer H. Rimes and Patricia A. Rimes to the sum of Nine Thousand, Six Hundred Forty-nine dollars and Ninety Cents ($9,649.90) to be paid into the court by Travelers Indemnity Company.”
Subsequently, pursuant to the stipulation, the plaintiffs executed general releases of the defendants. By agreement of the remaining parties, the plaintiffs Rimes and State Farm, a two-day trial to the court was held. It was State Farm‘s position that the only issue to be determined was the amount that State Farm should recover under its subrogation rights and the only factual issue that needed to be determined was the percentage of negligence, if any, that was to be attributed to its insured, Rimes. The plaintiffs took the position that the principal issue was whether or not they had been made whole by the settlement for the injuries and damages sustained in the accident. The position of Rimes was that State Farm was to be allowed no subrogation recovery whatsoever if the court found that the damages in fact sustained by the plaintiffs exceeded the total of the settlement.
The trial court took testimony for two days in respect to the damages sustained as the result of injuries to Palmer Rimes and in respect to the negligence aspects of the accident. It concluded that Rimes and Langdon, both of whose vehicles had been rear-ended, were not negligent at all, that Stiles was 70 percent causally negligent, and Switzer was 30 percent causally negligent. In its findings of damages, it concluded that past medical and hospital expenses were in the amount stipulated by the parties — $26,560.70, that the plaintiff‘s past loss of earnings was in the amount of $65,855.34, that the damages
The trial court, relying upon Garrity, supra, concluded that, under this state of the record, only the amount of damages as found in the trial to the court would have been sufficient to make the plaintiffs whole and that, because the settlement fell short by over $175,000, the insurance company had no right of subrogation. Accordingly, it denied any subrogation payments to State Farm and ordered the escrowed amount of $9,649.90 delivered to the plaintiffs.
Appeal was taken by State Farm to the Court of Appeals. The Court of Appeals requested that this court accept the appeal on certification pursuant to
Although the facts in Garrity are not on all fours with those presented in the instant case, we conclude that the principles set forth therein are applicable and are decisive. Accordingly, we affirm.
In Garrity, the property owners were insured under a fire insurance policy with Rural Mutual Insurance Company. They suffered a fire loss to their barn and dairy when a negligently operated truck belonging to a feed mill burst into flames and caused the loss to the Garrity‘s property. The alleged fire loss exceeded the sum of the amount recovered under their fire policy and the policy limits on the vehicle driven by the negligent tortfeasor.1 The fire insurance company claimed, however, that it had a right of priority in any recovery of monies from the third-party tortfeasor up to the amount that it, the fire insurer, had paid on the fire loss. The subrogation agreement in Garrity provided that:
“This Company may require from the insured an assignment of all right of recovery against any party for loss to the extent that payment therefor is made by this Company.” P. 540.
The trial court in Garrity interpreted that subrogation agreement literally and, accordingly, permitted recovery by Rural Mutual up to the amount it paid on the fire loss. The subrogation agreement in the instant case between Rimes and State Farm is not significantly dissimilar and if literally interpreted would permit recovery by State Farm in the amount of medical payments made on behalf of Rimes. This court in Garrity, however, pointed out that the effect of “conventional subrogation” was the
“‘[In equitable subrogation] no right of subrogation against the insured exists upon the part of the insurer where the insured‘s actual loss exceeds the amount recovered from both the insurer and the wrongdoer, after deducting costs and expenses. In other words, the insurer has no right as against the insured where the compensation received by the insured is less than his loss.‘” P. 543.
Wisconsin has long held, as pointed out in Garrity, 77 Wis. 2d at 544, that the same rule applies to an insurer claiming subrogation under contract and that such insurer is to be allowed no share in the recovery from the tortfeasor if the total amount recovered by the insured from the insurer and the wrongdoer does not cover his entire loss. As Garrity points out, the entire law of subrogation is based upon equitable principles; and relying upon Williston, in Garrity, 77 Wis. 2d at 542, we stated:
“‘A partial payment of the debt, even though it may be the full amount for which the surety has bound himself, will not entitle him to subrogation to the creditor‘s rights and securities.‘”
Thus, even though an insured has recovered from a tortfeasor a sum more than sufficient to equal the sub
In the instant case, State Farm argues that Garrity is inapplicable because Garrity involved a property-damage fire case, where the total amount of damages is more easily determinable than the amount of damages sustained by plaintiff in a personal-injury action. While that is undoubtedly true, we see it as a distinction without a difference. The law of damages in personal-injury cases is premised upon the fact that the damages are reasonably ascertainable. The trial of a personal-injury action is based on that proposition, and we find the alleged difficulty of ascertainment of actual damages to be irrelevant to the merits of this case. Particularly, it is irrelevant when, in fact, the procedures adopted by the trial court were designed to determine with exactitude the actual damages sustained by Rimes. Whether the mini-trial procedure to the court which was utilized is appropriate to this purpose will be discussed further in this opinion.
It appears clear that, under Wisconsin law as recapitulated in Garrity, one who claims subrogation rights, whether under the aegis of either legal or conventional subrogation, is barred from any recovery unless the insured is made whole.
State Farm argues, however, that the fact that the plaintiffs gave a general release to the tortfeasors is “an affirmation by them that they have been made whole as required by law.”
We think this overstates the characteristics of a release and settlement of a claim, particularly in a personal-injury case, where both the questions of liability and of damages prior to trial are to some degree in doubt. A pre-trial release in settlement is in fact usually appropriate only when such doubts exist. A release is merely the giving up of a right or claim, and it may or may not be for full consideration and may or may not make the grantor of the release whole. Moreover, a settlement is defined in Webster‘s Third New International Dictionary as “the satisfaction of a claim by agreement often with less than full payment.”
Thus, it is apparent that the legal import urged by State Farm to be given to the settlement in this case is inappropriate. The most that can be said is that the plaintiffs gave up the right of action against the tortfeasors for consideration that may or may not have been sufficient to make them whole. No recital in any of the stipulations in this case evidences an acknowledgment by the plaintiffs that the settlement made them whole, and the very nature of settlements of personal-injury claims precludes a hypothesis that the grantor necessarily acknowledges full reimbursement for the wrong done.
It is particularly apparent in this case that the release by the plaintiffs was not an affirmation that they were made whole, because the very escrow agreement arose out of the contention by the plaintiffs that they were entitled to the $9,649.90 as a portion of the sum for which they would settle. By the escrow agreement contained in the stipulation it is apparent that the plaintiffs, even if we were to assume that they were acknowledging that the payment of $125,000 would be sufficient to make
Moreover, neither the plaintiffs nor State Farm released the other in respect to the claim for the sum equal to the medical payments. This was the crux of the further litigation between them. Properly interpreted, we believe that the terms of the release and settlement and escrow agreement was a specific affirmation that the plaintiffs believed they were not made whole.3
State Farm also argues that, had the case gone to a verdict before the jury and had the total damages returned been $125,000, which sum included the $9,649.90 for medical expenses incurred in the first year after the accident, State Farm would clearly have been entitled to recover the latter amount as its claim in subrogation. While that is undoubtedly true, that fact is irrelevant, because, had such been the result of the trial, we would be obliged to conclude that the damages found by the jury made the plaintiff whole. Rimes, unless he paid over the amount of State Farm‘s claim, would have reaped a double recovery. The medical payments were made long before trial; and were Rimes to keep all the proceeds of the judgment plus the medical payments, he
Under Wisconsin law the test of wholeness depends upon whether the insured has been completely compensated for all the elements of damages, not merely those damages for which the insurer has indemnified the insured. Thus the mere fact that the settlement figure of $125,000 exceeded the insurer‘s claim for subrogation is immaterial. The injured or aggrieved party is not made whole unless all his damages arising out of the tort have been fully compensated.
We pointed out in Garrity that the cause of action against a tortfeasor is indivisible. Accordingly, it is only when there has been full compensation for all the damage elements of the entire cause of action that the insured is made whole. Thus only where an injured party has received an award by judgment or otherwise which pays all of his elements of damages, including those for which he has already been indemnified by an insurer, is there any occasion for subrogation. As we said in Garrity:
“[W]here either the insurer or the insured must to some extent go unpaid, the loss should be borne by the insurer for that is a risk the insured has paid it to assume.” P. 542.
Only if the insured‘s tort damages make him whole is he required to disgorge the amounts by which he has been indemnified, i.e., the insured cannot collect once in indemnity from the indemnitor and again in damages from the tortfeasor without being compelled to respond in subrogation. It is clear, in accordance with the general principles of subrogation accepted by this court and stated in Garrity, that the settlement in this case did not make the plaintiffs whole and that only compensation in the sum of $300,433.54 would have been sufficient. It was that sum, and nothing less, that would have sufficed to make the plaintiffs whole for the injuries.
The question remains, however, whether the method used by the trial court and acquiesced in by the parties was an appropriate one to determine the sum that would have made the plaintiffs whole. We confess that at first blush it appears to be awkward and inappropriate to proceed with a lawsuit which has been settled for the purpose of determining the damages that would have ensued had the settlement not have taken place. To some degree, the methodology adopted by the trial court defeats the very purpose of a settlement of a lawsuit — the avoidance of further litigation and the consequent saving of the resources of the parties and of the judicial system. It is unfortunate that the parties hereto, having settled the most serious questions of liability and damages amicably, could not have reached a compromise which could have avoided further litigation. Particularly, we find it diffi
Be that as it may, the trial judge was confronted with a problem that required judicial resolution. As unnecessary as the procedure adopted should have been, we conclude that the methodology utilized was appropriate. The assumption on which the trial judge proceeded was that, under the circumstances, only a trial in which the various items of damages would be ascertained could determine what sum would have made the plaintiffs whole. Regrettable as we consider the necessity of having any trial at this tag end of a complicated lawsuit, we conclude the trial judge proceeded appropriately.
The question was how best to determine the probable outcome of a lawsuit which had already been settled.
A precedent, in a somewhat analogous situation, exists where a client sues an attorney for malpractice because
That conclusion is appropriate in respect to the methodology used by the trial court in this case in determining what sum would have made the plaintiffs whole. In this case, the trial judge was able to conduct the trial
While State Farm felt that the only issue that needed to be litigated was the question of its own insured‘s negligence, it is apparent that the determination of what sum would have made the plaintiffs whole — the damages sustained by the plaintiffs — was properly afforded primacy. Clearly, if the damages, as properly found by the trial to the court, exceeded those received in the settlement, the insured was not made whole. That was the result here, and the trial court correctly concluded that State Farm was not entitled to any of the proceeds of the settlement.
By the Court. — Judgment affirmed.
COFFEY, J. (dissenting). I dissent because I believe that the case at bar is not controlled by the rule set forth in Garrity v. Rural Mutual Insurance Company, 77 Wis. 2d 537, 253 N.W.2d 512 (1977). Further, I believe that the majority‘s decision will not have a significant effect on the actual recoveries of injured plaintiffs while it will compel full-scale trials in cases where the plaintiff has already settled his principal claim and, thus, the decision is contrary to the policy interest in judicial economy. Finally, I dissent because the majority opinion places insurers in the embarrassing position of having to dispute the extent and validity of its own insured‘s case in order to exercise its statutorily permitted1 right to subrogation where the insured settles its case.
Under the majority‘s decision, the insurer is barred from recovering any part of the monies it paid from either the wrongdoer or the insureds, although it is obvious that some portion of settlement is intended to compensate the insureds for the damages for which they were indemnified by the insurer. The majority justifies this result by stating that the insureds must receive full compensation for all their damages before they are made whole as their damages are indivisible. But, in actuality, doesn‘t an insured impliedly concede that he is being made whole by accepting a payment in settlement of his claim, especially where the payment is less than the total monies available under the insurance contracts? In a personal injury case, both the valuation of compensatory damages and the determination of relative fault are inexact and always open to dispute. In light of that fact, I believe it is fair and reasonable to assume that a party is made whole by the amount for which he voluntarily settles his entire claim. Further, the majority‘s conclusion that the settling of insureds’ damages is indivisible ignores the fact that in reality the injured parties’ actual medical expenses are the most readily determined and often serve as a measuring stick for
This court has described subrogation as putting one to whom a legal right did not originally belong in the position of the legal owner of the right, and that the original right measures the extent of the new right.
“Subrogation has also been described as putting one to whom a particular right does not legally belong in the position of the legal owner of the right. Insofar as a new right is created in favor of the subrogee, ‘the original right measures the extent of the new right.’ 4 Williston, Contracts sec. 1265, p. 844 (Third ed 1967).” Id. at 541.
In this case, however, the majority allows the insureds to eliminate the right of action created by the doctrine of subrogation in the insurer by means of a settlement of their claims. This abuse of the rights of the insurer raises questions as to the applicability of the tort of bad faith recognized by this court in Anderson v. Continental Insurance Co., 85 Wis. 2d 675, 271 N.W.2d 368 (1978). Although in Anderson, we were concerned with allegations of bad faith on the part of the insurer, we recognized that the principle underlying the tort of bad faith was a duty of good faith and fair dealing on the part of each party to the contract.
“That such a duty [of good faith] arises out of the relationship between the contracting parties themselves cannot be doubted. As black letter law, Restatement, Law of Contracts 2d, sec. 231 (Tentative Drafts Nos. 1-7, Rev. and Edited, 1973), provides: ‘Every contract imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement.‘” Id. at 688-89.
Thus, it is clear that there is a duty of good faith imposed on the insured as well as the insurer. I believe that this duty of good faith applies to the right of subrogation which the insurer acquired through his good faith
Because the majority‘s application of the equitable doctrine of subrogation in this case reaches the wholly unfair result of barring the insurer from exercising its subrogation rights even though the insureds voluntarily settled their claim, I believe the decision is erroneous. I dissent from the majority opinion for the additional reason that the opinion both sanctions and necessitates another trial between the insurer and insured, even though the insured has settled his claim with the actual tortfeasors. Such mini-trials are contrary to the interest of judicial economy and in fact they undermine the very benefit supposedly gained in the settlement of a claim. The error in sanctioning such mini-trials is compounded when it is realized that such trials would be unnecessary were this court to determine that whenever an insured settles his claim with the responsible tortfeasors the subrogated insurer is entitled to recover for its payments to a proportionate amount equated with the insured‘s percentage recovery of his actual loss.
The error in the majority‘s sanctioning of “mini-trials” is further highlighted when one realizes that in reality, the majority decision will not result in a greater recovery for a plaintiff-insured. This is because knowledgeable counsel will be aware that medical-pay coverage payments will not be recoverable by the subrogated insurer and, thus, they will view those payments as an offset in determining the settlement value of the case when the plaintiff-insured has received such payments.
Finally, I believe that the majority‘s decision is in error because it places the insurer in the untenable and
None of the detrimental results of the majority opinion discussed above would be necessary if they were to adopt the more equitable rule of allowing the subrogated insurer to recover its payments from a settling insured and for this reason, I dissent.
STEINMETZ, J. (dissenting.) I disagree with the result and reasoning of the majority and therefore dissent.
The majority‘s statement of issue is:
“The question presented is whether an automobile insurer, State Farm Mutual Automobile Insurance Company, which, under a subrogation agreement signed by its insured, Palmer H. Rimes, has made payment under the medical-pay provisions of its policy, has the right to recover those payments out of the monies received by its insured in a settlement with negligent third-party tort-feasors and their liability insurers, when, according to
the findings and judgment of the circuit court, the settlement figure was less than the total damages sustained by the insured as the result of an automobile accident.” Supra at 264.
That is an inappropriate statement of issue, since once the plaintiffs’ case was settled in full with the other tortfeasors, there were no longer any “findings and judgment” the court could render regarding the damages sustained by the plaintiff. All the court could do was render an advisory opinion which it did, and I find that inappropriate and beyond the trial court‘s jurisdiction. The trial court did this to obtain a result of the value of plaintiffs’ claim in order to determine whether the plaintiffs were made whole when they settled with all tortfeasors in the case. There was no requirement that plaintiffs settle and, as it turns out, if one accepts the majority view, the plaintiffs should have gone to completion of the issues. Of course, there is no way of knowing what a jury verdict would have been with all interested and potentially liable parties participating in the trial. As events occurred here, the plaintiffs accepted in full and complete settlement $125,000 from the potential tort-feasors, and the trial judge opined that the plaintiffs’ total case was worth $300,000 with no negligence by the plaintiff driver.
The majority uses two cases for precedential value. I do not believe either case is appropriate.
In Garrity v. Rural Mut. Ins. Co., 77 Wis. 2d 537, 253 N.W.2d 512 (1977), the facts were that the parties stipulated that the Garritys had not been made whole for the loss they suffered. Garrity does not in any way lend support for a trial court conducting a mini-trial. The Garrity trial court ruled pursuant to the authority of
“Subrogation is recognized or denied upon equitable principles, without differentiation between ‘legal subrogation,’ arising by application of equity, or ‘conventional subrogation,’ arising from contracts or acts of the parties.”
In Garrity, supra, at 546-47, the court also stated:
“We hold that because the contract here contains no language to the contrary, the normal rule of subrogation applies and the subrogee has no right to share in the fund recovered from the tort-feasor until the subrogor is made whole.”
It would appear that due to the second holding of Garrity, the language of the contract could influence the equitable principles applied. However, the majority in the instant case makes short shrift of this possibility by stating:
“The subrogation agreement in the instant case between Rimes and State Farm is not significantly dissimilar and if literally interpreted would permit recovery by State Farm in the amount of medical payments made on behalf of Rimes.” Supra at 270.
This statement means that the subrogation agreement in Garrity and the present case are not different to any consequential degree. A comparison of the two
In Garrity, supra, at 540, the subrogation clause read:
“’Subrogation. This Company may require from the insured an assignment of all right of recovery against any party for loss to the extent that payment therefor is made by this Company.‘” (Emphasis added.)
In the instant case the subrogation clause reads:
“Upon payment . . . the company shall be subrogated to the extent such payment to the proceeds of any settlement or judgment that may result from the exercise of any rights of recovery which the injured person . . . may have against any person . . . and such person shall execute and deliver instruments and papers and do whatever else is necessary to secure such rights. Such person shall do nothing after loss to prejudice such rights.” (Emphasis added.)
There is a distinction in the two clauses; in Garrity the right of recovery of the insured governs, and in the present case the proceeds of any settlement are pledged for payment. The plaintiffs are presumed to know the language of their contract and should be bound by it, and, at least equitable determinations should not ignore the language of the contract.
The subrogation receipts in the two cases are also substantially different. In Garrity, supra, at 544-45, the receipt stated:
“‘In consideration of and to the extent of said payment, the undersigned hereby subrogates said insurance company to all the rights, claims and interest which the undersigned may have against any person or corporation liable for the loss mentioned above, and authorizes the said insurance company to sue, compromise or settle, in the insured‘s name or otherwise, all such claims, and to execute and sign releases and acquittances and endorse checks or drafts given in settlement of such claims in the name of the undersigned with the same force and effect as if the undersigned executed or endorsed them.‘”
The subrogation receipt in the instant case differs and reads:
“It is further warranted that no settlement has been made by the undersigned with any person or corporation against whom a claim may lie, and no release has been given to any one responsible for the loss, and that no such settlement will be made nor release given by the undersigned without the written consent of the said insurer, and the undersigned covenants and agrees to cooperate fully with said insurer in the prosecution of such claims and to procure and furnish all papers and documents necessary in such proceedings and to attend court and testify if the insurer deems such to be necessary.” (Emphasis added.)
In this case, the receipt clearly made the interest of the company paramount in any money paid, pursuant to the coverage, to the insured.
However, all these distinctions in the contracts are ignored when applying equitable principles in the present case.
The stipulation between the parties at settlement released all claims and tort-feasors and resolved all issues except the subrogation issue between the Rimes and their insurance company regarding the subrogated interest in the settlement. There were no real parties in interest left after the settlement except State Farm and the Rimes regarding their agreement. The judge went beyond this and tried the issue of plaintiffs’ sustained damages which had already been settled, as well as the apportionment of negligence. The plaintiffs’ settlement was based on possible recovery considering contributory negligence and damages when they accepted the $125,000. The need for the extra hearing after settlement was only to determine the amount State Farm was en
The only adversaries left after the settlement were the insureds and their insurance company on whether a settlement made one whole under all the circumstances or whether a new technique had to be developed to determine wholeness. In accepting the latter course, this court puts its imprimatur on the mini-trial (two days) to the court. There is no reason why State Farm and a company in a similar situation could not demand more than a mini-trial but rather a complete jury trial, since its recovery is affected by not only its insureds’ negligence but damages as finally determined by a trier of fact. Therefore, I do not believe the result of this case to be an assistance in moving cases through the courts. The majority‘s criticism of the insurance company‘s failure to give up its claimed rights at settlement is neither valid nor appropriate.
The other case the majority relies on is Lewandowski v. Continental Casualty Co., 88 Wis. 2d 271, 276 N.W.2d 284 (1979). I find that relying on that case as authority for the mini-trial in this case is not correct. In Lewandowski, the court held the very issue that had to be determined in a legal malpractice case was what loss was caused by the attorney‘s failure. The court held the issue to be tried was the value and merit of the original claim and stated: “[T]he ultimate goal should be to determine what the outcome should have been if the issue had been properly presented in the first instance.” Lewandowski, supra, at 281.
In Lewandowski the primary action for an automobile case had been barred by the attorney‘s causal negligence and the only way to discover the loss to the client therefore was to try the value of the original action. That is not by any stretch of the imagination a mini or extra proceeding. It is the heart of the matter, the whole is
A specter arises from the court‘s ruling that the insured must be made whole before a subrogor has any right of recovery. The issue becomes when is the insured made whole? Is it when the jury makes an award? I would assume so. The majority implies that never in a settlement is a person made whole since it is recognized purely as a compromise and is not the equivalent of being made whole. Therefore, all settlements in the future must determine within them an admission of wholeness or be subject to additional mini-trials.
I dissent and hold under the circumstances of this case that the settlement made the plaintiffs whole and the mini-trial was an advisory opinion which determined facts without the full participation of all parties.