This matter arose out of a motorcycle accident during which one Plaintiff’s decedent was operating the motorcycle and the other, separate Plaintiff’s decedent was a passenger on the motorcycle.
|Judge James P. Goodman|
The estate for the decedent passenger challenged the standing of the estate for the decedent driver to participate in the court’s proceedings for the approval of the settlement in favor of the decedent passenger.
In part, the estate for the decedent driver asserted that the substantial proposed settlement in favor of the decedent passenger was unfair to the minors represented by the estate for the decedent driver in that it depleted the single liability limits available under the carrier’s policy. The estate for the decedent driver requested the court to conduct an adjudication on the merits based upon an evidentiary record to review the appropriateness of the proposed settlement in favor of the decedent passenger and to consider the interests of the estate of decedent driver. The estate of the decedent driver also requested permission for it to fully participate in the court approval of settlement proceedings relative to the settlement in favor of the plaintiff passenger.
In the alternative, the estate of the decedent driver contended that it had standing as a third party beneficiary to the liability carrier’s policy allegedly entitling that estate to participate in the hearing to approve the proposed settlement in favor of the other decedent’s estate.
In his Opinion, Judge Goodman of the Schuylkill County Court of Common Pleas denied the emergency petition filed by the estate of the decedent driver. In so ruling, the court found that the estate of the decedent driver was unable to provide the court with any legal interest or authority that the estate of the decedent driver had in the settlement between the settling Defendants (and that Defendant’s carrier), and the estate of the Plaintiff-passenger.
The court noted that no case law or any other authority had been produced “that would prevent an insurance company from settling a case with one Plaintiff to the detriment of another Plaintiff or that would require the settlement to protect insurance funds for the non-settling Plaintiff.”
Judge Goodman went on to state that “the case law supports that the insurance company is entitled to determine how to settle cases for policy limits, albeit, it must exercise good faith to its insured.”
The court noted that the purpose of Rule 2206 is to ensure a fair settlement to a settling party. Here, the estate of the decedent driver was not the settling party and was also noted to have interests that were adverse to the estate of the decedent passenger. Accordingly, the court found that the estate of the decedent driver lacked standing under the rule to participate in the settlement approval proceedings between the settling Defendants and the estate of the Plaintiff passenger.
The court also rejected the third party beneficiary argument presented by the estate of the decedent driver. The court noted that there was no language in the insurance policy covering the Defendant that identified any injured party at a third party beneficiary to that contract. As such, the court found that there was no support for the assertion that the estate of the decedent driver was a third party beneficiary of the liability policy.
Judge Goodman otherwise also noted that “it is well-settled that under Pennsylvania law, an injured party has no right to directly sue the insurer of an alleged tortfeasor unless a provision of the policy or a statute creates such a right.” [citations omitted].
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