Ludwig v. Farm Bureau Mutual Insurance Co.

Jeannette Ludwig (plaintiff), her husband, and her mother-in-law were in a car accident with a truck. Ludwig’s car insurance through Farm Bureau Mutual Insurance Co. (Farm Bureau) (defendant) paid medical expenses for all three of the injured car occupants. The policy provided that medical payments were subrogated, which allowed Farm Bureau to recover payments from the proceeds of any settlement or judgment received by the injured person and prohibited prejudicing of its rights. The three occupants sued the trucking company, and Farm Bureau served the trucking company’s insurer notice of its subrogation rights. The lawsuit settled for $45,000, with $9,380.97 allocated for Farm Bureau’s subrogation claims. The settlement was for less than Ludwig’s actual losses because Ludwig wished to avoid the delay and mental stress of a trial. The trucker’s insurance company made a separate $9,380.97 check payable to both Farm Bureau and Ludwig. Ludwig filed suit to determine who should receive the money. The court attributed specific dollar amounts to Ludwig’s medical expenses, lost wages, expense of hired help, and car damage. The court noted Ludwig’s claims for pain, suffering, and disability had not been fully paid. The district court therefore denied reimbursement to Farm Bureau on the ground that Ludwig had not been made whole by the settlement with the trucking company. Farm Bureau appealed.