Court Opinion

ID: 6760167
Source: CourtListenerOpinion
Date Created: 2022-07-21 00:30:38.174594+00
Date Added: 2024-06-11T16:02:21.819829
License: Public Domain

H. Brown, J.,
concurring in part and dissenting in part. The issues presented in this appeal are difficult to resolve. I believe the majority, in struggling with these difficulties, has rendered an opinion which lacks the clarity needed to resolve the controversies which are bound to arise in this area of the law.
The problem is that of the plaintiff who pays for and carries underinsured motorist coverage and is injured by a tortfeasor with low limits coverage. The majority opinion invites the two insurance carriers to whipsaw this type of plaintiff. The problem can best be seen hypothetically. Assume that a plaintiff, in a case of clear liability, suffers an injury having a value of $100,000. The tortfeasor has a $25,000 policy limit. The plaintiff has a $100,000 underinsurance policy limit. In this situation the plaintiff should be compensated. Yet, if the tortfeasor’s carrier insists upon a release as a condition to its payment (which the carrier perhaps has a duty to do in order to protect its insured) and if the plaintiff’s own carrier refuses consent to settlement with the tortfeasor (citing its subrogation rights), the plaintiff is unfairly trapped.
This dilemma was recognized by the court of appeals. Judge Alba Whiteside, speaking for a unanimous court, pointed the way out. His opinion states:
“There is no indication of a real and existing subrogation right of defendant against the tort-feasor, that is, that the tort-feasor has assets with which to pay a judgment in excess of the policy limits of his liability insurance. To the extent that the settlement and resultant release given by plaintiffs defeats a real and existing subrogation right of defendant, a breach of the policy provisions by plaintiffs could be found. Unfortunate*32ly, such issue was neither presented to, nor determined by, the trial court. Rather, that court held in reliance upon Ruffing [v. Nationwide Mut. Ins. Co. (Oct. 20, 1981), Franklin App. No. 81AP-241, unreported], supra, which is not applicable, that the giving of the release violated the consent and subrogation clauses, even in the absence of the evidence of actual prejudice to defendant as a result thereof. To this extent, the trial court erred in finding the consent clause effective to bar plaintiffs’ claim for underinsurance benefits.”
The majority, perhaps also sensitive to this dilemma, states in the first paragraph of the syllabus that “whether the policy requirement of advance consent is enforceable as a bar to underinsured motorist coverage, is to be determined from the effects of the settlement, inclusive of the effects upon the rights of both the insured and the insurer.” (Emphasis added.) This appears to establish a rule of reason that would deny a plaintiff’s underinsurance carrier the right to use its subrogation clause, (which may be of no practical value) as a means to cut its policyholder off from coverage that has been purchased.
Since the above syllabus paragraph appears to establish a rule of reason, I could concur in that solution, although I think the direct approach to the subrogation problem, suggested by the court of appeals, is preferable. The second, third and fourth paragraphs of the syllabus state sound propositions of law and I concur in them.
The majority goes astray in the fifth paragraph of the syllabus, wherein an absolute rule is laid down which entitles the underinsurance carrier to withhold consent to settlement with the tortfeasor in every case where such carrier’s subrogation rights are destroyed.
Such an inflexible rule allows the underinsurance carrier to avoid payment of its coverage by claiming a subrogation right that has no value. It puts the two insurance carriers in a position to thwart a recovery to which a plaintiff is clearly entitled.
As Justice Douglas points out in his dissent, demand for arbitration by the plaintiff is a possible solution. This is so, but I am reluctant to force the plaintiff into arbitration as the way out of the dilemma.
Accordingly, I would affirm the decision of the court of appeals.