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Morateck v. Milwaukee Automobile Mutual Insurance
Citations: 34 Wis. 2d 95; 148 N.W.2d 704; 1967 Wisc. LEXIS 1066
Court: Wisconsin Supreme Court; February 28, 1967; Wisconsin; State Supreme Court
The Supreme Court of Wisconsin ruled on the case involving Morateck (appellants) and Milwaukee Automobile Mutual Insurance Company (respondent) regarding subrogation rights. Milwaukee Auto claimed entitlement to full subrogation based on its insurance policy; however, the court determined that the policy's terms were irrelevant to the case at hand. The focus was on an earlier arbitration order, which stated that Milwaukee Auto succeeded to the rights of the Moratecks against Superior Mutual Automobile Insurance Company and associated parties for up to $10,000, in exchange for a judgment against Milwaukee Auto. Consequently, the Moratecks relinquished any claims against the tort-feasors up to that amount. Milwaukee Auto's payment of $10,000 to the Moratecks was not augmented by subsequent collections from Superior, which paid Milwaukee Auto $4,800 as partial reimbursement, rather than additional compensation for the Moratecks. The plaintiffs' attorney acknowledged that they could not claim any part of the $4,800 due to the arbitration judgment. The attorney was entitled only to fees from the $10,000 and his lien on any further recovery was limited to amounts collected beyond that, which had proven uncollectible. The record did not clarify the payment terms from Superior, leaving uncertainty about the release of its insured, Wilson. Proceedings leading to the assignment on October 10th were initiated by Silverstein, who approved the settlement with Superior. Before arbitration, the Moratecks and their attorney had several options, including suing Robert Wilson and his insurer, as well as Wojciechowski. They could argue that Milwaukee Auto was obligated to insure up to $10,000 and that Superior was liable for negligent injuries caused by Wilson, but this approach faced significant challenges due to Superior's insolvency and Milwaukee Auto's firm position that its "uninsured" clause did not apply. Ultimately, the decision to pursue only the claim against the financially stable Milwaukee Auto was deemed wise and reasonable, as there was no guarantee of recovery from Superior. The choice to secure a certain $10,000 instead of risking an uncertain $28,000 judgment was justified. Although the settlement may not have yielded the best possible outcome, it was a deliberate decision made under the circumstances, and no additional attorney's fees are warranted. The Court affirmed the judgment, with Judge Hanley not participating.