In re Estate of Hammond

Aetna Life & Casualty Company appeals from an order of the circuit court of Cook County denying its subrogation lien against the funds received by the estate of Adam Hammond, a minor, as a result of Adam's settlement with the responsible tortfeasor. On June 27, 1984, Adam Hammond, age 17 months, was involved in a motor vehicle accident. His parents had an automobile insurance policy with Aetna Life & Casualty Company (hereinafter Aetna), which extended coverage not only to Adam's parents as the principal insured, but to the Hammond family members as well. Pursuant to the policy's medical payment provision, Aetna paid $4,273 of the minor's medical bills. After Adam Hammond's estate settled with the responsible third party tortfeasor, Aetna claimed a subrogation lien pursuant to the terms of its policy. The minor's estate objected to the lien, and in accordance with the decision in the Estate of Woodring v. Liberty Mutual Fire Insurance Co. (1979), 71 Ill. App.3d 158, 389 N.E.2d 211, the trial court held that Aetna had no subrogation rights against a payment by a tortfeasor as part of the settlement of a claim to a minor's estate. The trial court found that the minor was not a third-party beneficiary under the contract, and was, therefore, not bound by the original contract, including the subrogation provision.