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Al Wajnberg v. Dayna L. Wunglueck

December 29, 2011


Appeal from the Circuit Court of Kane County. No. 09-L-614 Honorable Robert B. Spence, Judge, Presiding.

The opinion of the court was delivered by: Presiding Justice Jorgensen

PRESIDING JUSTICE JORGENSEN delivered the judgment of the court, with opinion. Justices Bowman and Zenoff concurred in the judgment and opinion.


¶ 1 Following an automobile accident in which plaintiff, Al Wajnberg, was injured by defendant, Dayna L. Wunglueck, respondent, Erie Insurance Company, plaintiff's insurer, paid plaintiff's medical expenses and then sought through arbitration reimbursement from defendant's insurer, Farmers Insurance Company. Plaintiff filed a personal injury suit against defendant, and the parties settled for an amount that included Erie's medical payments subrogation claim. Plaintiff moved to adjudicate Erie's lien, and the trial court, pursuant to the common fund doctrine, granted the motion, reducing the lien by one-third. Erie appeals, arguing that the trial court erred in applying the common fund doctrine; that Erie never asserted a lien against plaintiff's recovery; and that, even if it asserted a lien, the trial court lacked both subject matter jurisdiction over the subrogation claim (because it is pending in arbitration) and personal jurisdiction over Erie (because Erie was not a party to the trial court action, it asserted its claim in an arbitration forum, and it was not provided due notice of plaintiff's claim for relief). For the following reasons, we affirm.


¶ 3 On October 3, 2007, in Gilberts, plaintiff was injured in a motor vehicle accident with defendant (the at-fault driver). In April or May 2009, Erie made its final payment for medical services on plaintiff's behalf. Specifically, Erie paid $10,000 of plaintiff's $13,084.50 total medical expenses. On April 13, 2009, Erie sent a letter to Farmers, stating:

"Our investigation has revealed that your insured[, i.e., defendant,] is responsible for the medical expenses resulting from the above accident.

We are enclosing the proof necessary to support our subrogation claim. Please send your check in the amount of $10,000.00.

Please protect the interest of Erie Insurance at the time of settlement with our insured [, i.e., plaintiff]." (Emphasis added.)

¶ 4 On June 5, 2009, Erie filed with Arbitration Forums, Inc., a claim for damages against Farmers. As noted on its claim form, Erie filed its claim to satisfy the statute of limitations and preserve its right to medical payments reimbursement from Farmers. Arbitration Forums, of which both Erie and Farmers are members, permits its members to adjudicate disputes without having to pay attorney fees. It also requires that all subrogation disputes between members be adjudicated in the arbitration forum. Erie submitted proofs necessary for adjudication of its claim.

¶ 5 On October 2, 2009 (four months after Erie filed its claim with Arbitration Forums), plaintiff filed in Kane County a complaint against defendant, alleging that defendant's negligent driving caused the October 3, 2007, motor vehicle accident in which plaintiff was injured.

¶ 6 Farmers subsequently filed its response to Erie's arbitration claim, seeking a deferment because plaintiff's lawsuit had been filed and was pending. On February 17, 2010, Erie sent a letter to (only) Arbitration Forums challenging Farmers' deferment request. It claimed that it did not receive a copy of the deferment request and that it was unaware if a lawsuit had ever been filed by any of the parties. Further, Erie claimed that, if a lawsuit had been filed, its claim was protected under the arbitration agreement. Erie stated: "We would request the attorney not include our recovery in his suit and request that [Farmers] pay us directly for our medical payments which were for treatment and paid policy limits." On February 25, 2010, Farmers sent to Erie a copy of its deferment request, along with its acknowledgment that it would protect Erie's medical payments subrogation rights at the time of settlement.

¶ 7 On April 3, 2010, Arbitration Forums granted Farmers' request for a deferment and scheduled a hearing for June 14, 2011. In the letter, Arbitration Forums stated that the matter was being "deferred for one year due to companion claims and/or suits pending." (The hearing has again been deferred pending the outcome of this appeal.)

ΒΆ 8 Plaintiff and defendant subsequently entered into settlement negotiations. During negotiations, plaintiff's attorneys became aware of Erie's request to Farmers to protect Erie's interest at the time of settlement (Farmers provided plaintiff's attorneys with a copy of Erie's April 13, 2009, letter). Plaintiff and defendant subsequently settled their dispute for $40,000 (which they understood as including Erie's medical payments subrogation claim), and, on September 29, 2010, the trial court entered a stipulation and ...

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