Appeal from the Circuit Court of St. Clair County. No. 91-L-567. Honorable Roger M. Scrivner, Judge, presiding.
Goldenhersh, Rarick, Maag
The opinion of the court was delivered by: Goldenhersh
JUSTICE GOLDENHERSH delivered the opinion of the court:
Subrogee, American Standard of Wisconsin, Inc. (hereinafter American), appeals from an order of the circuit court of St. Clair County granting the motion for adjudication of lien with award of attorney fees and a pro rata share of expenses of plaintiffs, Lorna McGee and Louella McGee. American contends that the trial court erred in granting said motion in that plaintiffs' personal-injury attorney is not entitled to recover any portion of the medical payments made by American under plaintiffs' policy, as American participated in the creation of the settlement fund and notified plaintiffs' attorney of its intention to represent its own interests before settlement of plaintiffs' underlying personal-injury action. We affirm.
The facts of this case are not in dispute. On April 4, 1991, Louella McGee was driving her car in which Lorna McGee was a passenger. Also in the car were Lorna's children, Linda Williams and Monique Williams, both minors, and Louella's son, Walter Smith, a minor. On that date, they were struck by a car negligently driven by defendant, Robert Wayne Oldham. Prior to the accident, defendant had been drinking at Pop's Saloon, owned by the other defendant, Mississippi Ave., Inc. At the time of the accident, Louella McGee was insured with American. Her policy carried medical-payments coverage of up to $2,000 per person. Oldham was insured under a policy issued by Safeco Insurance Company (hereinafter Safeco).
On April 19, 1991, plaintiffs retained the law firm of Heiligenstein & Badgley, P.C., to represent them against defendants Oldham and Mississippi Ave., Inc. Suit was filed against defendants on May 13, 1991. At some point, and without the assistance of legal counsel, plaintiffs filed claims with American on behalf of themselves and their children. American made the following medical payments:
On September 17, 1991, American notified Safeco of its medical-payment subrogation claim. Safeco acknowledged the letter through a reply letter dated September 27, 1991. The American adjuster assigned to the case sent out letters requesting status updates to Safeco on November 27, 1991, March 5, 1992, and May 4, 1992. The letters asked Safeco whether it expected the matter to be settled soon. All letters asked Safeco to notify American when the lawsuit was settled so that the American adjuster could then forward medical bills to Safeco. On May 21, 1992, the Safeco adjuster sent American a letter which stated: "The file still remains in litigation and we are no closer to settling this claim than we were previously. Please diary your file ahead six months, and upon settlement of this, your lien will be protected." The American adjuster signed an affidavit which stated that she first learned the identity of plaintiffs' personal-injury attorney through a conversation with the Safeco adjuster on June 24, 1992.
On July 9, 1992, the American adjuster wrote to C. E. Heiligenstein and advised him of American's medical-expense liens on plaintiffs and their children and that American did not want Heiligenstein to represent American in this matter, but rather American intended to represent its own interests. Heiligenstein replied on July 28, 1992, that suit was filed on September 9, 1991, that the matter was already prepared, and that settlement demands, including American's subrogation interest, were already submitted. Heiligenstein advised ...