When a first-party underinsured motorist (UIM) case goes to trial, it is often advantageous to move to exclude mention of insurance policies and policy limits. A recent Court of Appeals opinion states that legal issues to accomplish this goal may be complex.
This Oregon law update is a follow-up to a previous Oregon law update that was distributed on January 14, 2016. The current update clarifies the position that Safeco took at trial with respect to whether Thoens was underinsured and how Safeco arrived at that position.
Claims Pointer: In the following case, an insurer denied UIM coverage and the insured sued for benefits. At trial, the court granted the insurer’s motions to exclude evidence of the responsible driver’s liability policy limits and the plaintiff’s UIM policy limits. The court proposed to instruct the jury that the insurer stipulated that the responsible driver was underinsured, but the insurer objected on the grounds that this could not be determined until the jury decided the amount of damages the plaintiff was entitled to recover, and the jury returned a verdict for the insurer on the issue. However, the Court of Appeals reversed. The Court of Appeals stated that whether a driver is underinsured is based not on the amount of damages but on the amount of the liability policy limits and the UIM policy limits. As a result of the insurance information being excluded, the jury was asked to determine whether the responsible driver was underinsured without sufficient evidence to do so. The takeaway from this case is twofold: first, whether a driver is underinsured is determined from the liability policy limits as compared to the UIM policy limits; and second, where policy limits are excluded, either the jury must have sufficient evidence to determine whether a driver is underinsured, or the parties can stipulate that the liability limits are less than the UIM limits.
Thoens v. Safeco Insurance Co. of Oregon, 272 Or App 512 (2015).
Plaintiff in this case, Susan Thoens (Thoens), was rear-ended while stopped behind a school bus. Thoens was initially treated by her husband, a chiropractor in whose office she worked, but she subsequently saw several other doctors and underwent surgery on four levels of her cervical spine. Additionally, some of her treating doctors believed her vision and balance problems were caused by a brain injury and inner ear concussion sustained in the collision. Thoens’ total medical bills following the accident exceeded $200,000.
While Safeco paid personal injury protection (PIP) benefits for some of Thoens’ medical care, it cut off PIP benefits after an independent medical examiner concluded additional treatment was not reasonable or necessary for injuries sustained in the collision. Meanwhile, Thoens recovered the policy limits—$50,000—in settlement with the responsible driver’s liability insurer. She then sought additional payment from her own insurer, Safeco Insurance, under her $500,000 UIM policy. The accident was a minor impact rear-end collision, and Safeco disputed whether the accident was the cause of any harm suffered by the plaintiff.
Thoens sued Safeco for breach of contract, asserting separate claims for failure to pay PIP benefits and failure to pay UIM benefits. At trial, Safeco moved to exclude any evidence of the amount of Thoens’ UIM coverage limits and the responsible driver’s liability policy limits, as well as the fact those limits had been paid to Thoens in settlement. The trial court granted those motions and excluded any discussion of insurance policy limits or settlement.
At the end of trial, the court proposed to instruct the jury that Safeco stipulated both that the responsible driver was negligent in causing the collision and that he was underinsured. However, Safeco objected to stipulating that he was underinsured because this could not be determined until the jury decided the amount of damages plaintiff was entitled to recover. The trial court did not give the proposed instruction, instead allowing the question of whether the responsible driver was underinsured to go to the jury. One of the exhibits received in evidence was a letter from Safeco to Thoens’ attorney stating in part that Thoens would not be entitled to recover UIM benefits if the responsible driver’s policy limit matched or exceeded Thoen’s UIM policy limit. (The date of the letter was not provided by the court, but would likely be soon after the auto accident.) The court stated that determining whether Thoens was underinsured was based not on the amount of damages, but instead on the amount of the liability policy limits and the UIM limits. The jury found for Thoens on the PIP claim, but they found for Safeco on the UIM claim. Thoens appealed.
The Court of Appeals held that the trial court’s exclusion of Thoens’ UIM coverage limits and the responsible driver’s liability policy limits was in error because of the way the case was framed for the jury. While the trial court’s jury instructions came close to eliminating the question of whether the responsible driver was underinsured, they fell short of precluding the jury from reaching the question. The court held that the concept of “underinsured motorist” was therefore before the jury, but the jury had no evidence from which they could determine whether this was the case. Moreover, the jurors were left with the impression Thoens was required to prove the responsible driver was underinsured, and one of the exhibits explained the method for determining whether the responsible driver was underinsured (comparing his liability coverage with Thoen’s UIM coverage). Since the jury did not have information to make this decision, the Court of Appeals determined retrial was necessary and remanded the case back to the trial court.
Case updates are intended to inform our clients and others about legal matters of current interest. They are not intended as legal advice. Readers should not act upon the information contained in this article without seeking professional counsel.