ILLINOIS OFFICIAL REPORTS
Appellate Court
Wajnberg v. Wunglueck, 2011 IL App (2d) 110190
Appellate Court AL WAJNBERG, Plaintiff and Movant-Appellee, v. DAYNA L.
Caption WUNGLUECK, Defendant-Appellee (Erie Insurance Company,
Respondent-Appellant).
District & No. Second District
Docket No. 2-11-0190
Filed December 29, 2011
Held In an action arising from an automobile accident where plaintiff’s insurer
(Note: This syllabus paid plaintiff’s medical expenses and then sought reimbursement from
constitutes no part of defendant’s insurer through intercompany arbitration while plaintiff filed
the opinion of the court an action against defendant, settled for an amount including the medical
but has been prepared payments made by plaintiff’s insurer, and then moved to adjudicate the
by the Reporter of insurer’s lien, the trial court properly granted plaintiff’s motion and,
Decisions for the pursuant to the common fund doctrine, reduced the insurer’s lien by one-
convenience of the third, since plaintiff’s insurer never gave plaintiff, his attorneys or
reader.)
defendant’s insurer notice that it intended to collect its subrogation claim
on its own, that it did not want the assistance of plaintiff’s counsel, and
that its claim should not be included in any settlement.
Decision Under Appeal from the Circuit Court of Kane County, No. 09-L-614; the Hon.
Review Robert B. Spence, Judge, presiding.
Judgment Affirmed.
Counsel on James P. Newman and Brianne M. Connell, both of James P. Newman &
Appeal Associates, LLC, of St. Charles, for appellant.
Patrick D. Flanagan, of Brittain & Ketcham, P.C., of Elgin, for appellee
Al Wajnberg.
Edward M. Quimet, of Abramson, Murtaugh & Coghlan, of Aurora, for
appellee Dayna L. Wunglueck.
Panel PRESIDING JUSTICE JORGENSEN delivered the judgment of the
court, with opinion.
Justices Bowman and Zenoff concurred in the judgment and opinion.
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.
¶2 I. BACKGROUND
¶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
-2-
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.)
¶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 order to dismiss the suit in light
of settlement, but it retained jurisdiction to enforce the settlement and to adjudicate any liens.
¶9 On October 5, 2010, plaintiff moved to adjudicate Erie’s lien, requesting that the court
adjudicate the lien to zero or, alternatively, reduce it by one-third pursuant to the common
fund doctrine. Plaintiff alleged that the parties settled the matter arising out of the vehicle
accident for $40,000 and that Erie claimed a $10,000 lien against the suit’s proceeds (as
evidence of the lien, plaintiff attached a copy of Erie’s April 13, 2009, letter to Farmers in
which Erie requested $10,000 and asked Farmers to protect its interest at settlement).
Plaintiff further alleged that the settlement created a common fund and that Erie’s only
-3-
participation in the matter was sending a lien letter to Farmers. Plaintiff argued that Erie will
benefit from the common fund, which was created by the settlement achieved by his
attorneys, and he demanded proof of the lien claims. In an affidavit attached to plaintiff’s
motion, plaintiff’s attorney Patrick Flanagan stated that he never received any written
correspondence from Erie relating to this case; that attorneys at his firm became aware of
Erie’s lien “when they inquired during settlement negotiations with [Farmers]”; that Erie did
not participate in any aspect of the case (including the pleading and discovery phases and the
settlement negotiations); and that Erie “will benefit from this fund[, i.e., the $40,000
settlement,] by receiving a portion of the amount [it] paid under [its] Med Pay provisions.”
¶ 10 On October 12, 2010, the trial court granted plaintiff’s motion and adjudicated the
$10,000 lien to zero dollars. (Erie did not appear in court.)
¶ 11 On October 21, 2010, Erie filed an emergency motion to vacate the court’s order and
responded to plaintiff’s motion to adjudicate the lien, arguing that the trial court had no
jurisdiction over Erie (as it was not a party to the action; had asserted its claims in another
forum; and was not provided notice of plaintiff’s claim for relief) and that Erie had never
asserted any lien against plaintiff’s recovery (because it filed its own independent claim
against Farmers with Arbitration Forums). Erie further alleged that both it and Farmers are
signatories of an intercompany arbitration agreement that requires all subrogation matters to
be adjudicated through arbitration and, therefore, it has no need to assert any lien against
plaintiff’s recovery. Erie also argued that the trial court lacked subject matter jurisdiction.
It asserted that its right to recover from defendant (the tortfeasor) was contractual and not in
the nature of a lien. Finally, Erie argued that plaintiff could not ask the court to determine
Erie’s contractual rights by way of a motion, but rather should have filed an amended
complaint seeking declaratory relief and served Erie with notice.
¶ 12 On October 25, 2010, the trial court granted Erie’s motion and vacated its October 12,
2010, order. The court found that Erie had not asserted any lien against plaintiff’s recovery;
that Erie had an independent claim for relief filed with Arbitration Forums; that plaintiff’s
settlement does not affect Erie’s right to recovery; and that Erie has no interest in plaintiff’s
settlement funds.
¶ 13 On November 22, 2010, plaintiff moved to enforce the judgment, vacate the October 25,
2010, order, and adjudicate Erie’s lien. He argued that his attorneys never received any
communication from Erie stating that they were not to act in any manner to recover the
payments Erie made for plaintiff’s medical expenses or that Erie was going to proceed on its
own against defendant. Plaintiff also challenged Erie’s assertion that it was not timely
provided notice of plaintiff’s motion to adjudicate the lien. Plaintiff further argued that
plaintiff and defendant’s settlement agreement was binding and should be enforced by the
court and that the common fund doctrine provided the court with authority to adjudicate the
lien.
¶ 14 On February 14, 2011, after a hearing, the trial court vacated its October 12 and October
25, 2010, orders. The court: (1) found that it had jurisdiction to adjudicate Erie’s medical
payments lien; (2) granted the motion to adjudicate Erie’s lien; (3) granted the motion to
enforce the settlement; (4) reduced Erie’s $10,000 lien by one-third pursuant to the common
-4-
fund doctrine; and (5) denied plaintiff’s and Erie’s cross-motions for sanctions. Erie appeals.
¶ 15 II. ANALYSIS
¶ 16 Erie argues that the trial court erred in finding that the common fund doctrine applied
and, thereby, reducing its medical payments claim to account for attorney fees. “Whether the
common fund doctrine applies to any particular case is a question of law which we review
de novo.” Linker v. Allstate Insurance Co., 342 Ill. App. 3d 764, 770-71 (2003).
¶ 17 Illinois law reflects the long-standing general rule that the prevailing party bears the costs
of litigation, unless otherwise provided for in a statute or by agreement between the parties.
Brundidge v. Glendale Federal Bank, F.S.B., 168 Ill. 2d 235, 238 (1995). The common fund
doctrine, which is an exception to the general rule, allows an attorney who “creates,
preserves, or increases the value of a fund in which others have an ownership interest to be
reimbursed from that fund for litigation expenses incurred, including counsel fees.” Morris
B. Chapman & Associates, Ltd. v. Kitzman, 193 Ill. 2d 560, 572-73 (2000). The doctrine is
based on the court’s inherent equitable powers and the rationale that fees and expenses
incurred in creating the fund be apportioned among those who benefit from its creation.
Brundidge, 168 Ill. 2d at 238; see also Beth C. Boggs, An Insurer’s Rights in Illinois Under
the Common Fund Doctrine, 89 Ill. B.J. 242, 242 (2001) (“doctrine is based on the equitable
principle that an attorney who creates a fund in a personal injury case should in equity and
good conscience be entitled to compensation for services rendered”).
¶ 18 Courts have applied the common fund doctrine in numerous types of civil litigation,
including insurance subrogation claims, class actions, and wrongful-death cases involving
an intervenor. Morris B. Chapman, 193 Ill. 2d at 573; Scholtens v. Schneider, 173 Ill. 2d 375,
388 (1996). The doctrine protects attorneys dealing with nonparticipating insurance
companies. See Boggs, supra, at 242. To be entitled to fees under the common fund doctrine,
an attorney (e.g., an injured plaintiff’s attorney) must show that: (1) the fund was created as
a result of legal services the attorney performed; (2) the subrogee (e.g., an insurance
company) did not participate in the creation of the fund; and (3) the subrogee benefitted or
will benefit from the fund’s creation. Country Mutual Insurance Co. v. Birner, 293 Ill. App.
3d 452, 456 (1997).
¶ 19 The case law invariably addresses two issues. First, many cases address the promptness
and clarity of an insurer’s notice that it will represent its own subrogation interest. See Ritter
v. Hachmeister, 356 Ill. App. 3d 926, 930 (2005) (“mere token protest against application of
the doctrine is insufficient”); compare Perez v. Kujawa, 234 Ill. App. 3d 957, 960-62 (1992)
(doctrine not applied where the insurer “promptly and unequivocally” advised the plaintiffs
and their attorneys of its intention to pursue its own subrogation claim and disclaimed any
intention to employ the plaintiffs’ attorney; letter sent over month before the plaintiffs’
attorney filed suit), and Tenney v. American Family Mutual Insurance Co., 128 Ill. App. 3d
121, 124 (1984) (where the plaintiff attorney was promptly informed by his client’s insurer
via letter that the insurer intended to deal directly with the defendant’s insurer regarding its
claim–such a letter being subsequently referred to in case law as a Tenney letter–and where
the plaintiff did not file suit until nine months after notification, the insurer was an unwilling
-5-
participant and the plaintiff could not recover attorney fees under the doctrine), with Meyers
v. Hablutzel, 236 Ill. App. 3d 705, 708-09 (1992) (affirming application of common fund
doctrine where the plaintiff filed suit before the insurer paid medical expenses and informed
the plaintiff’s attorney of its subrogation rights and its decision not to hire the plaintiff’s
attorney), and Powell v. Inghram, 117 Ill. App. 3d 895, 899-900 (1983) (attorney filed suit
10 months before insurer indicated that, while it would not retain the plaintiff’s attorney, it
requested him to protect its interests in the event of settlement; court held that common fund
doctrine applied because, although insurer refused to employ the plaintiff’s attorney, it also
sought to benefit from his services in obtaining a settlement from which insurer should be
reimbursed).
¶ 20 A second common issue in the case law is whether the insurer meaningfully participated
in the fund’s creation. Ritter, 356 Ill. App. 3d at 930; Birner, 293 Ill. App. 3d at 457. The
participation inquiry is critical because the common fund doctrine does not apply (i.e., a
plaintiff’s attorney is not entitled to fees) when the attorney knowingly renders services for
an unwilling recipient (e.g., an insurance company). Tenney, 128 Ill. App. 3d at 124. The
case law on this issue holds that, under certain circumstances, “an insurance company’s mere
writing of a letter to the plaintiff’s attorney expressing its desire to represent its own
interests, without more, is not enough to overcome the fund doctrine.” McGee v. Oldham,
267 Ill. App. 3d 396, 401 (1994) (affirming equitable apportionment of fees where suit was
filed 14 months before insurance company notified plaintiff’s attorney of its intention to
represent itself on its medical payments subrogation claim and where insurance company
took passive position in the litigation–i.e., it sought merely to protect its subrogation rights);
see also Powell, 117 Ill. App. 3d at 899-900. Again, under certain circumstances, the
insurance company must “show some participation in the creation of the fund reflecting more
than a desire to protect its subrogation rights.” McGee, 267 Ill. App. 3d at 401. For example,
where an insurer makes a bona fide effort to participate in the litigation, but the plaintiffs
succeed in foreclosing that option, the insurer has been held to have shown itself to be an
unwilling recipient of the plaintiffs’ attorney’s services. Ritter, 356 Ill. App. 3d at 931
(affirming trial court’s order directing full reimbursement to the insurer without any
reduction for attorney fees); see also Meyers, 236 Ill. App. 3d at 709 (suggesting that the
insurer may join as a plaintiff, file an interpleader counterclaim, and participate in settlement
negotiations).
¶ 21 Here, the central question is whether Erie promptly and unequivocally notified plaintiff
and/or his attorneys that it desired to represent its own subrogation claim. Again, this inquiry
is critical because the common fund doctrine applies where the insurer’s “notification is
equivocal in that the insurer requests payment from the plaintiff upon settlement of its claim
against the defendant.” Ritter, 356 Ill. App. 3d at 931. In Birner, Country Mutual Insurance
Company, the plaintiffs’ insurer, paid the plaintiffs’ medical bills and sent a letter to the
defendant’s insurer (American Family), claiming a subrogation lien for its payments. Over
one year later, the plaintiffs retained an attorney. The next day and the following week,
Country Mutual notified the plaintiffs’ attorney that it had a right of recovery of its medical
payments on the plaintiffs’ behalf and that it was exercising its right via intercompany
arbitration; it requested that the attorney not include its payments in any settlement. The next
-6-
day, the plaintiffs’ attorney filed suit against the defendant, seeking, inter alia, recovery of
the medical expenses that Country Mutual had paid on the plaintiffs’ behalf. That same day,
Country Mutual filed its arbitration claim. On appeal, the court held that equitable
apportionment was proper because “Country Mutual’s words and actions were neither
prompt nor unequivocal.” Birner, 293 Ill. App. 3d at 457. The court noted that Country
Mutual did not file a lawsuit or commence arbitration until over one year after it became
aware of the accident and only after (albeit on the same day that) the plaintiffs had retained
an attorney and filed suit. Id. at 457. Also, in the interim, Country Mutual sent a letter to
American Family requesting that it forward from any settlement Country Mutual’s
subrogation amount. Id. The court held that Country Mutual’s letter to the plaintiffs’ attorney
was not clear and direct and that, as settlement approached, Country Mutual did not respond
to the plaintiffs’ attorney’s request that it reconsider its position. Id. Finally, the court held
that, even if the letter to the plaintiffs’ attorney had been more direct, it was not sufficient to
overcome application of the common fund doctrine, because Country Mutual did not
meaningfully participate in reaching the settlement. Id.
¶ 22 In Taylor v. American Family Insurance Group, 311 Ill. App. 3d 1034 (2000), five
months before the plaintiffs’ attorney filed suit, the plaintiffs’ insurer sent its first of three
Tenney letters to the attorney, advising her that it planned to represent its own subrogation
interests as to the medical payments it had advanced to the plaintiffs and that it did not solicit
the attorney’s services or recognize any lien upon the subrogation amount; also, the insurer
stated that it was notifying the defendant’s insurer to issue a separate draft representing its
subrogation amount (thereafter referred to as a subrogation lien) and naming it as the sole
payee and subrogee of the insured under the insurance contract and further noting that the
separate draft “ ‘will most likely be coming from the amount of the settlement’ ” between
the plaintiffs and the defendant’s insurer. Id. at 1036-37. Four months after the plaintiffs filed
suit, their insurer filed its arbitration claim. Six months prior to the scheduled arbitration, a
settlement agreement was reached that included the insurer’s subrogation interests, and the
plaintiffs’ attorney requested one-third of that amount for attorney fees. The insurer rejected
the check, noting its pending arbitration. The plaintiffs’ attorney responded that she had
included the insurer’s claim in the settlement because the insurer would not release its
subrogation lien on the plaintiffs’ file with the defendant’s insurer. The plaintiff’s attorney
filed suit to adjudicate the lien, and the trial court awarded her one-third of the subrogation
amount pursuant to the common fund doctrine. In rejecting the insurer’s argument that the
doctrine did not apply, the appellate court noted that merely writing to the plaintiff’s attorney
that it does not desire him or her to represent its interest is insufficient to overcome the
doctrine. Id. at 1039. Rather, the insurer must “ ‘show some participation in the creation of
the fund reflecting more than a desire to protect its subrogation rights.’ ” Id. (quoting McGee,
267 Ill. App. 3d at 401). The court held that, although the insurer filed an arbitration petition,
it did not contribute “in any meaningful way to reaching the settlement.” Id. at 1041. The
court stated that meaningful participation “must include some real and substantial action in
creating the fund from which the subrogee wishes to recover.” Id. (suggesting that it might
involve the filing of a petition to intervene in the personal injury suit).
¶ 23 Birner and Taylor instruct that, even in cases where the insurer sends a letter that is or
-7-
purports to be a Tenney letter before the plaintiff files suit, the insurer may not overcome
application of the common fund doctrine if the letter fails to be unequivocal and if the insurer
does not meaningfully participate in the suit. Taylor, 311 Ill. App. 3d at 1041; Birner, 293
Ill. App. 3d at 457.1
¶ 24 Here, in a letter dated April 13, 2009, Erie asked Farmers to protect its interest at the time
of settlement. This letter clearly shows that Erie was aware that there was a claim pending
or that one would be made by plaintiff. The letter may also be reasonably interpreted as
reflecting Erie’s desire to assert a lien for its medical payments to plaintiff at the time of any
settlement (i.e., to include its $10,000 in medical payments in the settlement fund). See
Taylor, 311 Ill. App. 3d at 1036-37 (treating such letter as asserting a subrogation lien).
Clearly, Erie’s letter is not an unequivocal instruction, such as a proper Tenney letter,
notifying plaintiff, plaintiff’s attorneys, or Farmers that it intended to collect its subrogation
claim on its own, that it did not desire plaintiff’s attorneys’ assistance, and that Farmers
should not include the $10,000 in medical payments in any settlement. See Ritter, 356 Ill.
App. 3d at 930 (“[m]ore recent cases establish, however, that a mere token protest against
application of the doctrine is insufficient”); Birner, 293 Ill. App. 3d at 457 (letter must be
clear and direct); McGee, 267 Ill. App. 3d at 401 (insurance company must “show some
participation in the creation of the fund reflecting more than a desire to protect its
subrogation rights”); Powell, 117 Ill. App. 3d at 899-900 (plaintiff’s attorney filed suit 10
months before insurer indicated that it would not retain plaintiff’s attorney but requested him
to protect its interests in the event of settlement; court held that common fund doctrine
applied because insurer refused to employ plaintiff’s attorney while it also sought to benefit
from his services in obtaining a settlement from which insurer should be reimbursed). Even
if Erie’s April 13, 2009, letter does not reflect its knowledge of an impending suit, Erie was
certainly on notice of plaintiff’s suit by April 2010, after Arbitration Forums granted
Farmers’ deferment request “due to companion claims and/or suits pending.” However, Erie
did not at that time send a proper letter to the parties. Rather, on February 17, 2010, Erie sent
an arguably sufficient Tenney-type letter to Arbitration Forums only, claiming that it was
protected under the arbitration agreement and requesting that the attorney not include its
recovery in any suit and that Farmers directly pay Erie its medical payments subrogation
amount. It was only after plaintiff moved to adjudicate the lien that Erie argued to plaintiff
and his attorneys that it desired no part in the settlement proceeds. Finally, we need not
address at length whether Erie meaningfully participated in the creation of the settlement
fund, because Erie neither advances the point nor do the facts reflect that it, for example,
attempted to intervene or otherwise meaningfully participate in the trial court matter.
Accordingly, the trial court did not err in applying the common fund doctrine.
1
We do not mean to imply that, to avoid application of the common fund doctrine, an insurer
must always meaningfully participate in the plaintiff’s suit. Tenney, which remains good law, and
its progeny instruct that, where the insurer sends a proper (i.e., prompt and unequivocal) letter to the
plaintiff and/or his or her attorney, stating that the insurer desires to represent its own subrogation
interests, this renders the insurer an unwilling participant so long as equitable considerations do not
mandate a different result.
-8-
¶ 25 Erie attempts to avoid our conclusion that the common fund doctrine applies by arguing
that it never even asserted a lien against plaintiff’s recovery. It contends that the letter it sent
to Farmers requesting that Farmers protect Erie’s interest at the time of settlement does not
show that Erie had a lien; rather, it merely asked Farmers to protect its interest at the time of
settlement. (Erie does not explain what this statement means.) Erie notes that the
intercompany arbitration agreement with Farmers requires all subrogation matters to be
adjudicated through arbitration and that it, therefore, had no need to assert any type of lien
against plaintiff’s recovery. Erie further claims that it did not assert any lien because it had
no knowledge of plaintiff’s claim; it filed its own independent claim for intercompany
arbitration; and an insurer’s ability to recover for payment is contractual and not in the form
of a lien. Erie again urges that it had no knowledge of plaintiff’s claim or the proposed
settlement and that, had it known, it could have filed a complaint for declaratory relief or sent
a strongly worded Tenney letter to notify plaintiff’s attorneys not to do any work on Erie’s
behalf, because it was handling the matter in another forum.
¶ 26 We reject Erie’s claim. It is true that an insurer has the right to file suit on its own behalf
to recover on its subrogation claim. Tenney, 128 Ill. App. 3d at 124. It is also true that an
insurer’s right to subrogation for medical payments is determined by the terms of the
insurance contract. Meyers, 236 Ill. App. 3d at 708. However, “[t]he common fund doctrine
is a common law rule of general application” and “applies generally to all funds created,
increased or preserved by a party in which others have an ownership interest.” Scholtens v.
Schneider, 173 Ill. 2d 375, 385-86 (1996). The obligation to pay fees under the common fund
doctrine, which is quasi-contractual, is independent of any insurance contract or subrogation
agreement and is “resting instead upon equitable considerations of quantum meruit and the
prevention of unjust enrichment.” Id. at 390-91; see Baier v. State Farm Insurance Co., 66
Ill. 2d 119, 126 (1977) (rejecting insurer’s argument that application of the common fund
doctrine would violate the subrogation contract between insurer and its insured); Stevens v.
Country Mutual Insurance Co., 387 Ill. App. 3d 796, 802-03 (2008) (the plaintiff’s attorney’s
“claim for attorney fees under the common-fund doctrine does not depend upon the
insurance-policy language between [the plaintiff] and [his insurer]”; holding that the fact that
the insurance policy allowed recovery for medical payments made through underinsured-
motorist coverage provision did not negate the insurer’s obligation to pay the plaintiff’s
attorney for his services, where the insurer benefitted from the common fund that the
attorney’s efforts created). Erie’s argument fails because application of the common fund
doctrine is independent of the parties’ insurance contract.
¶ 27 For the same reason, we also reject Erie’s argument that the trial court had no subject
matter jurisdiction over its subrogation claim. Erie notes that, while plaintiff received a
judgment before any ruling was issued in the arbitration matter, Erie filed its arbitration claim
before plaintiff filed his personal injury suit. Erie argues that the trial court’s ruling gave no
deference to the fact that Erie’s rights were already pending before another tribunal. In Erie’s
view, the trial court, therefore, had no subject matter jurisdiction over the subrogation issue.
We reject Erie’s argument because, as the foregoing authority shows, the issue of attorney
fees is independent of any contractual agreement between Erie and plaintiff and, under these
facts, application of the common fund doctrine was not improper.
-9-
¶ 28 In another attempt to avoid application of the common fund doctrine, Erie argues that the
trial court lacked personal jurisdiction over it. Erie contends that it first received notice that
its “lien” (of which it claims it had no knowledge) was going to be adjudicated when it
received in the mail a copy of plaintiff’s October 5, 2010, motion to adjudicate the lien. Erie
argues that the common fund doctrine may not be invoked as a mechanism to dismiss its
separate arbitration claim and that the doctrine does not give the trial court personal
jurisdiction over a nonparty, unless that party is properly served with a summons (which Erie
claims was never done here). We reject Erie’s claim because, as previously noted, Erie had
notice of plaintiff’s (actual or potential) suit as early as April 13, 2009 (when Erie asked
Farmers to protect its interests in any settlement), and certainly by April 2010 (after
Arbitration Forums granted Farmers’ deferment request “due to companion claims and/or
suits pending”). Plaintiff did not move to adjudicate the lien until October 25, 2010, after the
parties had settled and after Erie could have intervened and clarified that it was pursuing its
subrogation claim in another forum. However, prior to settlement, Erie did not send a letter
to the parties or take any other action. Erie now seeks to avoid application of an equitable
doctrine by claiming that the trial court had no personal jurisdiction over it after it sent a
letter to Farmers requesting that its interests be protected upon any settlement. We reject its
claim.
¶ 29 III. CONCLUSION
¶ 30 For the foregoing reasons, the judgment of the circuit court of Kane County is affirmed.
¶ 31 Affirmed.
-10-