Insurance – Direct Action Violation

Listen to this article

WI Court of Appeals – District III

Case Name: Curtis L. Lovelien, et al. v. Austin Mutual Insurance Company

Case No.: 2016AP1679

Officials: Stark, P.J., Hruz and Seidl, JJ.

Focus: Insurance – Direct Action Violation

Curtis Lovelien and Timothy Kroening (collectively, Lovelien) appeal an order dismissing Austin Mutual Insurance Company and the other claimants from this personal injury action after Austin Mutual settled with some of the claimants and forwarded its remaining policy limits to the circuit court for allocation between Curtis Lovelien and Timothy Kroening. Lovelien argues Austin Mutual’s payment of the remaining policy limits after the partial settlement violates Wisconsin’s direct action statute, WIS. STAT. § 632.24 (2015-16), because the funds were not distributed on a pro rata basis according to the damages each claimant sustained. Austin Mutual contends this appeal is moot based upon a claimed accord and satisfaction between Austin Mutual and Lovelien.

We conclude Austin Mutual’s payment of its remaining policy limits to the circuit court does not constitute an accord and satisfaction between Austin Mutual and Lovelien and, therefore, this appeal is not moot. We also conclude the direct action statute does not require distribution of an insurer’s funds to claimants on a pro rata basis. We therefore affirm the circuit court’s order of dismissal.

Recommended for Publication

Full Text

Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.