On October 6, 2014, the Washington Court of Appeals, Division One, released an unpublished opinion addressing the impact of an order dismissing the a case brought by an insured against an at-fault driver on the insured’s right to seek underinsured motorist (UIM) benefits from her insurer, which had intervened in the litigation. In Komine v. Metropolitan Prop. and Cas. Co., No. 70707-8-I, Wash. Ct. App., Div. 1 (Oct. 6, 2014), the Court of Appeals determined that the dismissal was effective only as to the claims between the insured and at-fault driver, and not the intervening insurance company. Based on the language of the stipulated dismissal and the intent of the insured, the Court of Appeals held that the trial court correctly vacated the dismissal and allowed the insured to seek UIM benefits.
The case concerned an accident in which a third-party rear ended the insured husband and wife. Both insureds were injured in the accident and brought suit against the third-party for negligent driving. The third-party had liability insurance, but the insureds’ claimed damages exceeded the amount of the liability insurance benefits so the parties stipulated to the UIM insurer’s intervention in the case. During the litigation, the insured husband settled with the third-party’s liability insurer within the policy limits. The liability insurer tendered the full policy limits to the insured wife, and the UIM insurer waived its right to subrogation. After the claims against the at-fault driver were settled, the insureds and third-party filed a stipulated dismissal of the case. The UIM insurer was not a party to the dismissal. The trial court eventually entered an order dismissing the entire case, including the intervening insurer.
Shortly before the stipulated dismissal was entered, the insured wife sent the UIM insurer a settlement demand and they commenced discovery on the UIM issues. The insurer later learned that the case had been dismissed. The insured wife contended that the dismissal was not effective as to her UIM claim against the insurer. The parties unsuccessfully attempted to settle the UIM claim, so the insured wife moved to vacate the dismissal of the case. The trial court granted the motion as to the insured wife’s UIM claim against the insurer. The insurer appealed the decision, arguing that it was entitled to dismissal.
The Court of Appeals began by noting the awkward posture of the case. It noted that the insured wife never actually asserted any claims against the UIM insurer, which was solely an intervenor in the action, meaning there were no claims to reinstate. Despite that, the court analyzed the specific language of the stipulated dismissal between the insured and the third-party and found that it was meant to be effective only as to those parties—not the UIM insurer as well. Additionally, the court noted the insured wife’s post-dismissal conduct, which demonstrated her lack of intent to dismiss any UIM claim. The insured wife consistently indicated her intent to seek UIM benefits and maintained that position at all times. Based on those facts, the Court of Appeals determined that the trial court mistakenly dismissed the entire case and that vacating the dismissal was appropriate under CR 60.
The attorneys of MLR regularly litigate UIM insurance coverage issues, including the interaction between UIM claims and the associated liability claims. Please contact us with any questions about this case, or any other issue you see addressed on the Insurance Coverage Blog.