Tuesday, August 30, 2022

Third Party Release Held to Bar Companion UIM Claim

In the case of Richards v. Nationwide Prop. & Cas. Ins. Co., No. 289 of 2019, G.D. (C.P. Fay. Co. Feb. 23, 2022 George, J.), the court granted the Defendant insurance company’s Motion to Dismiss a Plaintiff’s UIM claims on the basis that the Plaintiff had signed a Release which discharged the carrier Defendant from all past, present, and future claims arising out of the accident at issue.   

According to the Opinion, the Plaintiff and her husband were in a motor vehicle accident after the Plaintiff’s husband lost control of the vehicle, struck a center divider, and then were struck by another vehicle. 

At the time of the accident, there were two (2) policies issued by Nationwide that existed for the Plaintiff’s household.   The first policy covered the Plaintiff and her husband as well as the car involved in the accident and the second policy covered other household vehicles.   

As the husband was the allegedly at-fault driver in the accident, the Plaintiffs made a third party bodily injury negligence claim against her husband under the first policy, under which the Defendant carrier paid the policy limits.   

The Plaintiff, who then assisted by counsel, signed a Release with respect to that tortfeasor Defendant in terms of the accident.

The Plaintiff then attempted to assert a claim for UIM benefits under the second Nationwide policy, claiming that there was a mutual understanding of the parties that the above noted Release would not affect this request.  

The Defendant carrier denied this claim and argued that the UIM policy did not provide coverage for any motor vehicle furnished for the regular use of the Plaintiff, the Plaintiff’s resident, or the Plaintiff’s relative.  

The Plaintiff then brought suit against the Defendant alleging that the regular use exclusion in the policy conflicted with Pennsylvania’s Motor Vehicle Financial Responsibility Law. 

The Defendant carrier responded by filing a Motion for Summary Judgment in which it was separately also asserted that the Plaintiff had previously settled all claims by executing an unambiguous Release.  

The defense argued that, although the Plaintiff argued that there was a mutual mistake at the time of the signing of the settlement agreement, the court held that Pennsylvania law treats releases as contracts and that the Plaintiff was represented by counsel at the time of the signing of the settlement agreement at which point she indicated that she understood the nature of the contract.  

Based on this analysis the court granted the Defendant’s Motion for Summary Judgment.  The court emphasized that the Plaintiff was admittedly aware of the existence of the additional insurance policies when she signed the Release under which she agreed to settle all claims.

Anyone wishing to review a copy of this decision may click this LINK

Source:  “Digest of Recent Opinions.”  Pennsylvania Law Weekly (July 19, 2022).   

Source of image: Photo by Mikhail Nilov on www.pexels.com.

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