Court Opinion

ID: 7841227
Source: CourtListenerOpinion
Date Created: 2022-09-08 17:01:06.167869+00
Date Added: 2024-06-11T16:04:29.955200
License: Public Domain

Shea, J., with whom Callahan, J., joins,
dissenting. I disagree with the majority that General Statutes § 38-175c (b) (1), by providing that an uninsured motorist insurance carrier becomes obligated to pay after the applicable liability coverage has been “exhausted by payment of judgments or settlements,” was intended to work a forfeiture of uninsured motorist coverage for an insured accident victim, like the defendant, who has settled his claim against the tortfeasor for less than the limit of the applicable liability insurance. The effect of the majority’s holding is to require a victim who has uninsured motorist coverage exceeding the limit of the tortfeasor’s liability insurance to obtain the last dollar of that insurance under the penalty of losing the entire benefit of his uninsured motorist coverage. By requiring the victim to obtain the full amount of the tortfeasor’s liability coverage before proceeding against the uninsured motorist carrier, the majority has erected a barrier to the settlement of liability claims that is likely to have a serious impact upon our overburdened jury trial docket.
In Longworth v. Van Houten, 538 A.2d 414, 423-24 (N.J. Super. App. Div. 1988), the court, recognizing the harmful effects that would otherwise result with respect to the insured’s net recovery, the delay in the litigation of claims and the increased burden cast upon the court system, construed the New Jersey statute defining an underinsured motor vehicle, which is virtually identical to § 38-175c (b) (1), to require by the phrase “exhausted by payment of judgments or settlements” only that the underinsured motorist insurer be credited with the full amount of the liability insurance available. “The requirement that the insured obtain the *215tortfeasor’s entire policy limits as a condition of prosecuting his right to [underinsured motorist] benefits is so antithetical to the policies underlying the statute that we are constrained to conclude that the Legislature could not have so intended.” Id. In Schmidt v. Clothier, 338 N.W.2d 256, 261 (Minn. 1983), the court held that a similar exhaustion provision contained in an underinsured motorist insurance policy was contrary to public policy and void because of its effect in diminishing by litigation expenses the net recovery of the insured and in creating a barrier to settlement that would result in overburdening the courts. Other courts have ruled similarly with respect to such policy provisions. Weinstein v. American Mutual Ins. Co. of Boston, 376 So. 2d 1219, 1220 (Fla. App. 1979); Liberty Mutual Ins. Co. v. Reyer, 362 So. 2d 390, 391-92 (Fla. App. 1978).
I do not believe that the legislature, in defining the obligation of an insurer for the purpose of underinsured motorist coverage, intended to impose on the courts as well as the insured the burden of litigating each claim to an ultimate judgment unless the liability carrier pays the full amount of its coverage by way of settlement. The majority opinion does not suggest any possible benefit that can flow from such a requirement. In all probability, the legislature intended simply to limit the insurer’s obligation by allowing a deduction from the value of the underinsured motorist claim for the amount of liability insurance available.
Nor do I believe that the phrase “exhausted by payment of judgments or settlements” compels us to adopt an interpretation that produces results having no reasonable justification. The word “exhaust” does not invariably mean drained to the last drop, as the majority assumes. The definition advanced by the defendant, “to make use of or try out or otherwise account for the whole number of,” is acceptable accord*216ing to common usage. Webster’s Third New International Dictionary. In this case the liability insurance has been accounted for and the insurer has received the full benefit thereof by the arbitrators’ award subtracting from the $60,000 of damages sustained by the defendant the $20,000 of coverage on the tortfeasor's vehicle. I would affirm the award.
Accordingly, I dissent.