Arndt v. Burdette, 21457

CourtSupreme Court of West Virginia
Citation434 S.E.2d 394,189 W.Va. 722
Decision Date22 July 1993
Docket NumberNo. 21457,21457
PartiesFrances ARNDT and David Arndt, Plaintiffs Below, Appellants, v. Bobby L. BURDETTE II, Defendant Below Westfield Insurance Company, Appellee.

4. "Where an insurer decides, after complete investigation, not to approve payment to its insured based upon the allegedly tortious conduct of another party, the insurer's claim that a subsequent settlement by the insured with the other party violates the subrogation clause of the insurance contract by prejudicing the insurer's subrogation rights is invalid." Syl. Pt. 1, Berry v. Nationwide Mut. Fire Ins. Co., 181 W.Va. 168, 381 S.E.2d 367 (1989).

5. "In light of the preeminent public policy of the underinsured motorist statute, which is to provide full compensation, not exceeding coverage limits, to an injured person for his or her damages not compensated by a negligent tortfeasor, this Court holds that underinsured motorist coverage is activated under W.Va.Code, 33-6-31(b), as amended, when the amount of such tortfeasor's motor vehicle liability insurance actually available to the injured person in question is less than the total amount of damages sustained by the injured person, regardless of the comparison between such liability insurance limits actually available and the underinsured motorist coverage limits." Syl. Pt. 5, Pristavec v. Westfield Ins. Co., 184 W.Va. 331, 400 S.E.2d 575 (1990).

6. "A plaintiff is not precluded under W.Va.Code, 33-6-31(d) (1988), from suing an uninsured/underinsured insurance carrier if the plaintiff has settled with the tortfeasor's liability carrier for the full amount of the policy and obtained from the uninsured/underinsured carrier a waiver of its right of subrogation against the tortfeasor." Postlethwait v. Boston Old Colony Ins. Co., 189 W.Va. 532, 432 S.E.2d 802 (1993).

7. " 'A motion for summary judgment should be granted only when it is clear that there is no genuine issue of fact to be tried and inquiry concerning the facts is not desirable to clarify the application of the law.' Syllabus Point 3, Aetna Casualty & Surety Co. v. Federal Ins. Co. of N.Y., 148 W.Va. 160, 133 S.E.2d 770 (1963)." Syl. Pt. 1, Bauer Enters., Inc. v. Frye, 181 W.Va. 234, 382 S.E.2d 71 (1989).

Jeffrey T. Jones, Hunt, Lees, Farrell & Kessler, Charleston, for appellants.

Richard E. Rowe, B. Karleton Kesner, Goodwin & Goodwin, Charleston, for appellee Westfield Ins. Co.

WORKMAN, Chief Justice:

This case is before the Court upon the appeal of Frances and David Arndt from the May 27, 1992, final order of the Circuit On December 25, 1988, the Appellant, Frances Arndt, was involved in an automobile accident on West Virginia Route 41 in Raleigh County, West Virginia. The Appellant's car was struck in the front by a car owned and operated by Bobby Lee Burdette. 2 The Appellant's car was then struck in the rear by a vehicle operated by William Lehman. Mr. Burdette was cited at the accident scene for failure to maintain control and for being left of center. The accident report also indicated that a contributing cause of the accident was Mr. Lehman's failure to maintain control of his vehicle. As a result of the accident, the Appellant suffered a fractured knee cap, a nondisplaced fractured hip, a fractured left rib, abrasions and lacerations. She has undergone surgery on her knee and is expected to undergo more knee surgery. The Appellant's vehicle also sustained over $2,000 in damage. 3

[189 W.Va. 725] Court of Raleigh County granting the Appellee's, Westfield Insurance Company's 1 (hereinafter referred to as Westfield), motion for summary judgment. The sole assignment of error is whether the circuit court erred in granting the Appellee's motion for summary judgment. Based upon the parties' briefs, arguments and all other matters submitted before this Court, we find that the motion for summary judgment was properly granted, and accordingly affirm the lower court's decision.

At the time of the accident, Mr. Burdette was insured by Aetna Insurance Company (hereinafter referred to as Aetna). Mr. Lehman was insured under a policy issued by Allstate Insurance Company (hereinafter referred to as Allstate) with limits of $100,000 per person and $300,000 per occurrence. The Appellants were insured under a policy issued by the Appellee, 4 which prohibited the Appellants from entering into any agreement which prejudiced the rights of their insurer and from settling a claim potentially involving underinsurance without the Appellee's written consent. The Appellants filed claims with both Allstate and Aetna. Also, on October 9, 1989, the Appellants, through their attorney, Jeffrey Jones, informed the Appellee that Mrs. Arndt may need her underinsurance coverage.

A settlement was negotiated and entered into with Mr. Burdette's insurance carrier, Aetna, for $20,122.95, which exhausted Mr. Burdette's policy limits. However, in conversations with Larry Keefer, insurance adjustor for Allstate, Mr. Keefer indicated to the Appellants' attorney that in his opinion, Mr. Lehman was not negligent and that he was not the cause of Mrs. Arndt's injuries. Mr. Keefer stated that Allstate would only contribute a nominal fee to settle the matter on behalf of Mr. Lehman.

On July 26, 1990, the Appellants' attorney sent a letter to the Appellants indicating that it was the Appellee's position that it would not pay underinsurance coverage until some money was collected from Allstate. The attorney indicated to the Appellants that he was going to attempt to negotiate a small settlement with Allstate. Also, on the same day, the Appellants' counsel wrote a letter to the Appellee confirming the Appellee's position that it would not provide underinsurance coverage until some money was obtained from Allstate. In that same letter, the attorney inquired of the Appellee as to whether the insurer would still pay underinsurance coverage if Mr. Lehman's policy limits were not obtained.

On November 2, 1990, Mr. Jones wrote to the Appellee stating that Mrs. Arndt had received an offer of settlement from Allstate for $1,250. Mr. Jones requested the Appellee to either waive its subrogation right or forward a check for $1,250. 5 Also The Appellee informed the Appellants by letter dated November 15, 1990, that the insurer was checking into the possibility of subrogation. Further, the Appellee indicated that it was not certain that Mrs. Arndt's claim was in excess of Mr. Lehman's policy limits, which it contended had to occur before the underinsurance coverage would be accessible. Finally, the Appellee informed the Appellants that a decision on whether or not the insurer would give permission to settle with Allstate would be made within thirty days. Again on November 27, 1990, the Appellee informed the Appellants that as far as the insurer was concerned "before the Underinsured Motorist coverage of the Arndts can be involved, full recovery must be made from the joint tort-feasors[ ]" and "that in settlement of the claim, you cannot jeopardize our subrogation in this matter."

[189 W.Va. 726] Mr. Jones indicated to the Appellee that if the company failed to either waive subrogation, or forward the check within thirty days, the Appellee would lose its right to subrogate claims against Mr. Lehman and his insurer because the Appellants would release them as part of the settlement agreement.

By letter dated December 13, 1990, the Appellants' attorney informed Allstate that due to the approaching statute of limitations, 6 the Appellants wished to accept the $1,250 settlement on behalf of Mr. Lehman and that the Appellants would sign the requisite release. This settlement was entered into without the Appellee's written consent.

On December 18, 1990, the Appellee withdrew any offer of underinsurance coverage previously made 7 because of a December 5, 1990, report from Mrs. Arndt's treating physician, Dr. George Orphanos, in which the doctor stated that "I can not definitely rule out that it would be impossible for any of the injuries sustained by Mrs. Arndt to have occurred in the rear end collision." Due to this report, the Appellee stated that all joint-tortfeasors' policy limits had to be exhausted prior to collecting any underinsurance coverage. The Appellants' attorney also attempted to withdraw the settlement agreement of $1,250 with Allstate because of the treating physician's report.

On December 19, 1990, the Appellants instituted a lawsuit against Mr. Lehman and Mr. Burdette with service of process also made upon the Appellee. Subsequently, the circuit court ordered the...

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