In the McDowell County case of Lunsford v. Mills, the plaintiff volunteer firefighter was injured when he arrived at the scene of a tractor-trailer accident to render assistance to the driver/tortfeasor, who had injured himself by flipping his rig. As the plaintiff attempted to carry defendant Mills to safety, he was struck by a second motorist and suffered injury. The plaintiff later filed suit against both drivers, whose carriers each had counsel file answers to the complaint - as did the plaintiff's UIM carrier. The relevant coverage limits were: $1mil for the truck driver, $50,000 for the second driver, and a combined $400,000 in UIM coverage through the plaintiff's carrier.
The second driver's carrier decided to tender its $50,000 coverage to the plaintiff, which the UIM carrier decided not to match to protect its subrogation rights against that second driver's personal assets. When the plaintiff then alleged that the UIM carrier needed to pay up its limits, before adjudication of the remaining claim against the truck driver and his carrier, the UIM carrier declined under the theory that it did not have to pay anything if the truck driver was found partially negligent for the injury - because the combined liability limits on both vehicles would exceed the available UIM coverage. Later, the plaintiff settled with the truck driver and his carrier for an additional $850,000. So, the plaintiff had recovered an aggregate total of $900,000 in liability coverage.
The plaintiff was about to recover more. The trial judge ruled that the UIM carrier should have paid its limits at the time of the $50,000 tender from the liability carrier, and entered judgment against the UIM carrier for its available coverage (after the credit for the liability coverage on the second vehicle) of $350,000. The UIM carrier cried foul, claiming that now the plaintiff had recovered twice for the same loss, as the UIM carrier should have received credit for the coverage on the other vehicle.
Nope, said the Court of Appeals. The comparison is not between the available UIM coverage and the total of all liability coverage on all cars - instead an "underinsured vehicle" is established for UIM purposes as soon as the coverage ON THAT VEHICLE ALONE has been exhausted without full compensation for the plaintiff's injury. Citing dicta from an earlier case, the Court has now established a new bright-line rule. A UIM carrier can still get its money back in a case such as this, from the other at-fault driver, but only if it first pays the UIM claim to the plaintiff and then proceeds against the other driver's liability coverage in subrogation. Since the UIM carrier failed to do this in this case, the plaintiff gets to keep all the liability money AND get all the UIM money.
There is still an unanswered question about all this, however: why did the UIM carrier not get a hearing on the value of the plaintiff's claim? Perhaps in this case it was obvious (or even stipulated) that the plaintiff should recover at least $400,000 from the underinsured second driver - but in future cases that might not be obvious at all. So, practice point here is - evaluate the timing and availability of UIM coverage not on the parties as a whole, but instead as to each potentially underinsured vehicle involved in the case.
