Curtis L. Lovelien and Timothy D. Kroening, Plaintiffs-Appellants,
Austin Mutual Insurance Company, Defendant-Respondent, State of Wisconsin - Department of Health Services, Candi L. Lewallen and Artisan and Truckers Casualty Company, Involuntary-Plaintiffs, Group Health Cooperative of Eau Claire, Defendant,Greg Roskos and Estate of Patricia Hamerski, Joinder-Defendants.
from an order of the circuit court for Trempealeau County No.
2015CV31 JOHN A. DAMON, Judge. Affirmed.
Stark, P. J., Hruz and Seidl, JJ.
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
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.
Curtis Lovelien and Timothy Kroening were injured in an
automobile accident on Highway 95 outside of Arcadia,
Wisconsin. At the time, they were employed by Donald
Lewallen's (Donald) drywall installation business, D.
Lewallen Construction, Inc. On the morning of the accident,
Donald was driving his work van on the way to a job site.
Curtis Lovelien, Timothy Kroening, and Donald's
fourteen-year-old stepson, Austin LeMon, were passengers in
the van. Before reaching the work site, Donald's van
collided with a vehicle driven by Patricia Hamerski. Donald,
LeMon and Patricia Hamerski died at the scene of the
collision, and Curtis Lovelien and Timothy Kroening sustained
Lovelien filed a negligence suit against Austin Mutual, the
commercial automobile insurance carrier for Donald and D.
Lewallen Construction. Candi Lewallen (Lewallen),
Donald's wife and LeMon's mother, intervened to bring
a claim for the wrongful death of her son. Patricia
Hamerski's estate, her adult son, Greg Roskos
(collectively, Hamerski), and her underinsured motorist
carrier, Artisan and Truckers Casualty Company (Artisan),
were joined as defendants.
Austin Mutual represented on various occasions to the circuit
court that it was ready and willing to pay the full policy
limits of $500,000 to the claimants. Thereafter, Hamerski settled
with Artisan and assigned their claims to Artisan. After
attempting to reach a global settlement, Austin Mutual
settled with Lewallen for $185,000 and Artisan for $60,000.
Austin Mutual then moved for the court to approve the
settlements, for payment of the remainder of the policy
limits into the court, and for its dismissal from the case.
Curtis Lovelien and Timothy Kroening objected to the
settlements and dismissal of Austin Mutual on the basis that
they would be deprived of their pro rata shares of the policy
limits. The court approved the settlements and denied
Lovelien's subsequent motion for reconsideration.
Austin Mutual deposited the remaining $255,000 in policy
limits with the clerk of circuit court to be distributed
between Curtis Lovelien and Timothy Kroening. The circuit
court then dismissed Austin Mutual, Artisan, Hamerski and
Lewallen from the lawsuit. The court ordered Lovelien's
attorney to file a proposed distribution of the remaining
funds. Ultimately, the court ordered that $225,000 of the
deposited policy limits be distributed to Curtis Lovelien and
the remaining $30,000 paid to Timothy Kroening. The remaining
parties, Curtis Lovelien and Timothy Kroening, now appeal the
circuit court's dismissal of the settling parties.
Accord and satisfaction
Austin Mutual argues this appeal is moot because Lovelien
accepted the funds it offered, establishing an accord and
satisfaction. An accord and satisfaction is an agreement to
discharge an existing disputed claim and constitutes a
defense to an action to enforce the claim. Flambeau
Prods. Corp. v. Honeywell Info. Sys., Inc., 116 Wis. 2d
95, 112, 341 N.W.2d 655 (1984). "The interests of
fairness dictate that a creditor who cashes a check offered
in full payment should be bound by the terms of the
offer." Id. After receiving an offer, the
creditor's cashing of the full payment check constitutes
an accord and satisfaction which discharges the entire debt.
Id. at 101. Like other contracts, an accord and
satisfaction requires an offer, an acceptance, and
Here, Austin Mutual moved the circuit court for an order
allowing it to deposit its remaining policy limits with the
court, and for dismissal. Curtis Lovelien and Timothy
Kroening opposed Austin Mutual's motion, arguing that
this payment would deprive them of their respective pro rata
shares of the policy limits. The court granted Austin
Mutual's motion, and Austin Mutual deposited its
remaining policy limits pursuant to the court's order
along with a letter to the clerk of court stating the
following: "Pursuant to the Court's Order dated May
31, 2016, enclosed please find The Main Street America
Group's check no.  payable to Clerk of Courts in the
amount of $255,000.00 presenting the settlement being paid
out in the above-noted matter. Please distribute
accordingly." Austin Mutual contends its letter, coupled
with the payment, constitutes a legally binding ...