*1 SCOTT, JR., (Sund In re ESTATE OF WILLIAM W. a Disabled Person strand-Sauer, Scott, Jr., Petitioner-Appellee, Re v. Estate William W.
spondent-Appellant). Second District No. 2 — 90—0322 8, 1991. Opinion February filed REINHARD, P.J., concurring. specially Perrecone, Lawrence J. Fero- A. both of and Frank
Lawrence J. Ferolie Rockford, Associates, Ltd., appellant. for lie & Boswell, Culbertson, Rockford,
Thomas H. of Hinshaw & and D. Griffith, Swofford, Carmen, Kendall Stephen R. and Bruce L. all of Hin- Culbertson, Chicago, shaw & for appellee.
George Elsener, Assosciates, George Chicago, M. M. Elsener & amicus curiae. *2 P.C., Beckmire, Garrity, Yogt, guard-
John G. of Garrity Freeport, & of ian ad litem.
JUSTICE GEIGER opinion delivered the of the court: The respondent Scott, estate (the estate) of William W. Jr. (Billy), from the appeals trial court’s order the claimant awarding Sundstrand-Sauer (Sundstrand or the company) judgment on the provision its Health and Disability Group Insurance Plan (the Plan). We affirm.
In March Billy, age who was was seriously injured while a riding as on passenger a He motorcycle. was later declared a disabled adult and his estate brought suit based acci- dent. Billy’s employer, father’s paid approximately $200,000 for Billy’s injuries pursuant to the terms of the Sund- strand health plan. The Plan includes a subrogation clause which states:
“Subrogation, Assignment and Lien. On of bene- fits hereunder as a Illness, result of Injury Fund shall be subrogated, to the extent of benefits made or to be made Plan, under This to all the rights a Covered Individual against any person, firm or organization out arising of such Injury or Illness and the Covered Individual shall execute and deliver instruments and documents and do whatever is neces- sary to secure rights such to the Fund. The Covered Individ- ual shall nothing do to prejudice such rights. Each Covered Employee hereby assigns to the Trustees of the Fund out of any amounts received or to be received Covered Indi- vidual as a result of Injury or Illness for which the Covered Individual has a against any person, firm or organiza- tion to the extent of benefits made or to made be under This addition, Plan. In the Covered Individual hereby grants a lien to the Trustees of the Fund out amounts any received or to be received by the Covered Individual as a result of Injury or Illness for which the Covered Individual has a claim against any person, firm or organization to the extent of ben- made Plan.”
efits made or to be under This In the court an order es- January signed approving tate’s settlement the motorist who had struck motorcy- $121,000 pol- cle. That was for the motorist’s settlement fees, limit. After there remained icy payment court-approved 1990, after $82,000 in In approximately February estate assets. written hearing receipt arguments regarding finding claim for the court entered its order subrogation, clause, to the re- company the Plan’s entitled The the settlement. mainder the estate’s assets from brought this appeal. argument
The first on that either Sund- appeal only or it should be strand’s claim should be denied allowed rata basis pro not receive full compensation because did It the trial court observed that dam- injuries.
Rights subrogation they in originated equity, may to law, (See in through now arise statute or contract. common Tempel (1959), Dworak v. 181, Medical 190-92.) subroga 17 Ill. 2d enforceable; tion clauses in insurance contracts are fur generally enforceable, if it is thermore, clause is not common-law con such a Spirek of the contract terms that control. See subrogation but cepts Insurance 65 v. State Farm Mutual Automobile Co. Ill. (1978), 440, 3d 449. App. case,
In this is clear in the that it fashion plan a his father’s health dependant named as covered Sundstrand, their intent to confer third- the manifested parties him that he was a direct contract upon status so party beneficiary 44, v. Altevogt Brinkoetter (See (1981), 54-55.) 85 Ill. 2d
beneficiary. extended coverage, It is also clear that based on that Sundstrand $200,000 and the Billy’s in on account of accident payments some obligated The insurance contract that Sund resulting disability. to subro right included clear expenses to cover also strand would be sub It that the fund gation, provided company’s extended, received to all amounts to the extent of benefits rogated, a claim creating of an injury individual because or due covered by 849 following injury under the Plan. insurance settlement the by was for a lesser amount than the benefits extended Sun- already that injury. dstrand on account of same
We trial was correct analysis find the court’s careful that the to the This company was entitled full ordered. not is a case based in terms. Fur equity, but rather contractual thermore, recognized courts have the insurers equity subrogating their to had an in rights against insureds’ tort-feasors who caused 181, (See surance claim. Dworak 17 Ill. Tempel (1959), v. 2d 190- Further, 92.) we note that it that the subroga determinative extent, tion order To if depletes any, the estate’s assets. the accurately estate, estate’s settlement did not compensate note, also, that, not at fault. We extent the estate’s resources are than less made by the company disadvantaged is also by small settlement.
We are not persuaded the estate’s by foreign authority (see Rimes v. State Farm Mutual (1982), Automobile Co. Insurance 106 263, 275, 2d 348, Wis. 353), N.W.2d where the court held that an insurer may not subrogated be unless the insured has been made Illinois, also, whole for his loss. In doctrine of will applied or not to the applied, according good dictates equity, conscience, and public policy (Reich considerations. v. Tharp (1987), 167 Ill. App. 501.) However, 3d its use is encouraged appro priate (See circumstances. In re Estate Schmidt (1979), Ill. App. 3d are 458.) We not aware has that Illinois ever made a statement analogous to that of the Rimes court.
As out, Sundstrand points this case is from distinct the wrong ful death which There, cases the estate partially relies. courts noted a public against policy subrogation in the case wrongful (See death. In re (1979), 456, 458; Estate Schmidt 79 Ill. App. 3d Podgorski National Bank v. (1978), 57 Ill. App. 3d In Hard ware Dealers Mutual Fire Insurance Co. v. Ross 129 Ill. also a App. wrongful case, death full court found no re covery injured insured and no by the plaintiff insurer. The absence full in recovery by injured *4 sured, however, There, was not determinative in Ross. importantly, the claim, insurer had to the sought avoid for insured’s liability and only after the insured had received a third-party insurance settle stipulated ment had it to its coverage.
Here, where Sundstrand’s insurance contract with Billy through his father included an unambiguous subrogation clause, applicable
850 it
and made all which apparently where Sundstrand has contract, reason obligated to make under that we find no to to Furthermore, Illinois deny subrogation. authority sup- we find no the estate’s that Sundstrand should re- port argument alternative rata share of settlement pro only ceive proceeds. also that inter argues
The estate tort, assignment est an of a is void as personal amounts to which estate, against public According to the enforcement of policy. Sundstrand, to had when not been made Billy settlement, assignment of all Bil by operate whole would as an rights. Billy compensated As a would for ly’s consequence, lost injuries, disability, pain earnings. his and and suffering, has agree improperly We with Sundstrand that the estate char “assignment.” as acterized the claim an for rights neither nor to make full claims his sought received Rather, it and to re injury. merely sought was awarded the had to the which recovered coup payments advanced been Inc. Midway Liquors, Remsen v. (See from source. third-party 132, assertion, (1961), 30 Ill. to App. Contrary not call does for language subrogation provision Plan’s but, rather, mere reim the full of the insured’s assignment rights of amounts Plan. by bursement forwarded that concluding argument The estate’s allowance Sund I, 12, of the Illinois Constitution strand’s claim would violate article section (Il I, 1970, §12), process a denial of due Const. art. or be l. I, 12, provides section United States Constitution. Article in for remedy that shall find a the laws all “[ejvery person certain He person he his ***. shall injuries wrongs which receives to law, Ill. Const. justice freely, completely, promptly.” obtain I, art. §12. merit response that there is no to agree We with Sundstrand’s after a argument. subrogation only this Sundstrand was awarded find no fully in We basis hearing participated. full which the estate Eldridge Mathews v. U.S. for a due claim. process (See 893.) Also, we reiterate L. Ed. 2d 96 S. Ct. damages beyond for his compensated extent that was not fully a result of the limited settlement which expenses, medical a valid to recovery which has agreed; the estate behalf, responsible is not expenses of its agreement. above, need not consider Sund- Based our conclusions we In- Employee Retirement (Federal ERISA argument strand’s *5 limitations Illinois preempt any Security Act) provisions come right subrogation. Sundstrand’s of the circuit court affirm the
Accordingly, judgment we Stephenson County.
Affirmed.
McLAREN, J., concurs. REINHARD, concurring: specially
PRESIDING JUSTICE the en- court, agree trial I do not I would affirm the but majority opinion. tire of the analysis us, principles the estate asks
In its contention principal con or restrict Sundstrand’s deny to either equity public policy, of its medical ex to the full amount recoup up tractual responds from the settlement. Sundstrand pense payments (29 Act of 1974 (ERISA) Retirement Income Employee Security limi seq. (1988) et judicial statutory U.S.C. State preempts §1001 benefit subrogation provisions employee tations on self-insured Although acknowledges authority the estate there is plans. Blue (see, e.g., Reilly v. Blue Cross & Shield position
United 1988), 416), rely 846 F.2d the estate asks us to (7th Cir. v. authority (see, e.g., Corp. Holliday FMC (3d 1989), Cir. contrary 79). 885 F.2d conflicting these deci Supreme recently
The Court addressed not restrict contrac may sions on this issue and ruled that States employee contained in self-insured bene subrogation provisions tual v. U.S. _, plans. (FMC Corp. Holliday fit 112 L. Ed. The concedes in its brief reply 111 S. Ct. are “then all state laws provisions applied, if ERISA’s preemption are equity pre Illinois common law of including in Holliday preempts Thus, Court’s decision empted.” Supreme The subrogation provision. modification of the contractual judicial subrogation provision of the of the un majority’s analysis validity in it. I concur partake and I do not unnecessary, der Illinois law the other issues regarding of the majority opinion in the balance raised. his notes and that settlement did ages could be worth million $3 $5 him argument’s not make whole. The focus is that award, assets, inequitable. the estate's by depleting es- responds argument by asserting this tate, of the through third-party beneficiary is an Billy, intended Plan and that Sundstrand’s contractual should rights clear overridden by inapplicable equitable analysis.