Opinion ID: 2089586
Heading Depth: 1
Heading Rank: 5

Heading: What Is the Appropriate Amount of the Surcharge?

Text: Norman argues that Farm Bureau should not be able to recover that portion of the interim distribution representing the $25,000 death indemnity benefit paid to David's estate by Farm Bureau on account of Berta's death. Norman accurately points out that under Farm Bureau's policy, Farm Bureau has no subrogation rights with respect to payments made under the death indemnity coverage. There are two flaws in Norman's argument. First, the entity seeking recovery here is not Farm Bureau; it is Berta's estate. There is nothing in the policy, nor any rule of law of which we are aware, that would prohibit Berta's estate from accessing the death benefit paid to David's estate to satisfy the judgment held by Berta's estate against David's estate. Any question as to Farm Bureau's right to this $25,000 payment is between Berta's estate and Farm Bureau and does not affect the liability of Norman. Second, the fact that Farm Bureau has no subrogation rights with respect to the death benefit does not affect its subrogation rights as to its UM payment. It is the latter rights Farm Bureau asserts against any funds recovered by Berta's estate on its judgment. Therefore, the fact that the original source of these funds was a death indemnity benefit is no impediment to Farm Bureau's ability to claim the entire $49,000 interim disbursement as an offset against its $100,000 UM payment.