APPEAL from the Circuit Court of Ford County; the Hon. CHARLES
E. GLENNON, Judge, presiding.
JUSTICE TRAPP DELIVERED THE OPINION OF THE COURT:
Two issues are presented: (1) Whether an insurer can be subrogated to the rights of its insured to the proceeds of a wrongful death action, where the insurer paid a claim to the insured under an uninsured motorist provision of an insurance policy; and (2) whether a settlement agreement between the parties is final prior to its execution. We conclude that the insurer is entitled to subrogation and that the settlement was final.
The decedent, Anne Thatcher, died as a result of injuries she received in a collision which occurred on August 17, 1975, between the motorcycle on which she was a passenger and a truck. The motorcycle was driven by defendant, Gary Eichelberger, and the truck was driven by defendant, Larry Tribbey. Plaintiff, Gloria Thatcher, decedent's mother, was appointed administrator of decedent's estate. Gloria Thatcher subsequently commenced this wrongful death action against defendants, alleging that their negligence caused Anne Thatcher's death. Because defendant Eichelberger was uninsured, prior to filing the wrongful death action, a claim was made to State Farm Fire and Casualty Company (State Farm), intervenor-appellant, under the uninsured motorist provision of the insurance policy previously issued by State Farm to plaintiff. After negotiations, State Farm paid $9,000 to plaintiff as administrator of her daughter's estate. Plaintiff signed a release and trust agreement on February 20, 1976, which provided in part:
"For the consideration aforesaid, and to the extent of any payment made hereunder, the undersigned agrees to hold in trust for the benefit of the Company all rights of recovery which he shall have against any person or organization legally liable for such bodily injuries, and assigns to the Company the proceeds of any settlement with or judgment against such person or organization."
On February 24, 1976, plaintiff obtained an order from probate court authorizing both the insurance settlement, and the assignment to State Farm of rights of recovery against third parties on account of Anne Thatcher's injuries and death to the extent of the amount received from State Farm, including the language:
"[U]pon receiving that sum, the administrator execute and deliver to the company a discharge from liability under the policy with an assignment of rights of recovery against third persons on account of decedent's injuries and death to the extent of the amount paid."
Plaintiff subsequently filed this action for wrongful death, and State Farm filed an application to be made a party, asserting its rights under the trust agreement. The court allowed State Farm's application.
At a pretrial conference on February 7, 1980, a settlement was agreed upon by the parties. The docket entry by the court on that date indicated that counsel for all parties were present, and further stated:
"Parties stipulate that upon payment of $2,500 from defendant Eichelberger and $2,500 from defendant Tribbey (total $5000.00) to plaintiff; State Farm shall be reimbursed $3000.00 whereupon the cause shall be dismissed. Payments are to be made within 14 days. On joint motion of all parties, cause removed from 2/25/80 jury calendar and continued generally pending settlement."
On June 4, 1980, the defendants filed a joint petition, alleging plaintiff had refused to abide by the settlement terms and execute the necessary releases, despite the fact that the consideration for the settlement had been tendered to her. The petition requested that the court order the plaintiff to conclude the settlement agreed upon at the pretrial conference. At the hearing on the petition on September 16, 1980, plaintiff's attorney argued that due to recent case law, State Farm could not recover any part of the wrongful death proceeds. Plaintiff subsequently filed a motion to dismiss State Farm as a party, alleging that the trust agreement that plaintiff signed when she received the payment from State Farm was "void and contrary to public policy" under the Wrongful Death Act (Ill. Rev. Stat. 1979, ch. 70, par. 1 et seq.) and should not be enforced. State Farm filed an objection to plaintiff's motion, and the court allowed the motion based upon the precedent of In re Estate of Schmidt (1979), 79 Ill. App.3d 456, 398 N.E.2d 589, and National Bank v. Podgorski (1978), 57 Ill. App.3d 265, 373 N.E.2d 82. The written order dismissing State Farm as a party entered by the court included a finding under Supreme Court Rule 304 (Ill. Rev. Stat. 1979, ch. 110A, par. 304) that there was no just reason to delay appeal, from which order State Farm has appealed.
• 1 The statutory basis for the claim that insurance companies should not be allowed subrogation rights in wrongful death actions is section 2 of the Wrongful Death Act (Ill. Rev. Stat. 1979, ch. 70, par. 2), which provides:
"Every such action shall be brought by and in the names of the personal representatives of such deceased person, and, except as otherwise hereinafter provided, the amount recovered in every such action shall be for the exclusive benefit of the surviving spouse and next of kin of such deceased person and in every such action the jury may give such damages as they shall deem a fair and just compensation with reference to the pecuniary injuries resulting from such death, to the surviving spouse and next of kin of such deceased person." (Emphasis added.)
Based upon this provision this court, in Podgorski, held that an insurance company was properly denied subrogation in a wrongful death action settlement. The insurance company had made and, in the future, would be required to make, payments to the widow of the decedent pursuant to a survivor's benefit provision of an auto insurance policy it had issued to decedent. The court noted that the insurance company was making payments to the widow to compensate her for loss of support, while recovery under the Wrongful Death Act is for both loss of support and for losses occasioned in addition to support. Further, there was no formula available to the court to determine what portion of the wrongful death award was indemnifying the widow for her loss of support. The court found that the above quoted language from the Wrongful Death Act indicated a public policy to prohibit subrogation rights from attaching to Wrongful Death Act proceeds.
However, with regard to payment under the uninsured motorist provision of an insurance policy, it is noted that section 143a of the Insurance Code (Ill. Rev. Stat. 1979, ch. 73, par. 755a) requires that uninsured motorist ...