US District Court holds that insurer with $20,000 limit cannot intervene in case in federal court because of diversity jurisdiction

A vehicle driven by Susan Ingham and owned by William Ingham struck a vehicle driven by Ansley Dunbar.  Dunbar's vehicle was insured by Patriot Insurance Company.  The Inghams' vehicle was insured by Progressive Direct Insurance Company. 

Patriot made payments to Dunbar for her injuries pursuant to her underinsured motorist coverage. 

A digression:  Underinsured motorist coverage provides coverage to the injured insured above the policy limit of the person responsible for the accident. In other words, if you have $300,000 of underinsured motorist coverage on your own car insurance, and you get hit by some idiot texting while driving with a $20,000 policy limit, your own insurance will cover your proven damages up to $300,000. 

Underinsured motorist coverage and its sibling uninsured motorist coverage (which covers you if you are injured by someone with no insurance or in a hit and run) are the most important coverages you can buy.  While most insurance will pay other people injured by your negligence, underinsured and uninsured motorist coverage protects you from other people's negligence. 

If you don't have underinsured and uninsured motorist coverage, call your agent right now and add it to your policy.  If you do have it, call your agent right now to discuss raising your coverage limits.

Back to the case:  After paying Dunbar for her injuries caused (allegedly) by the negligence of the Inghams, Patriot  brought a subrogation action against the Inghams.  (In a subrogation action an insurer who has paid a claim seeks reimbursement from the people responsible for the damages.) 

Progressive moved to intervene in the subrogation action, for the purpose of securing a coverage determination as to the limits available under Progressive's policy. 

In Patriot Ins. Co. v. Ingham, 2019 WL 5394503 (unpublished), the United States District Court for the District of Massachusetts held that Progressive could not intervene as of right because the question of the applicable limit would not arise unless and until the Inghams were found to be liable for the accident.

The court also held that Progressive could not intervene under the permissive intervention rule.  The Patriot claim was in federal court under diversity jurisdiction, which requires the claim to exceed $75,000.  In order to permissively intervene, Progressive's claim would also have to exceed $75,000.  Since its policy had a $20,000 limit (begging the question of why it was asking the court to determine the applicable limit), it did not meet the jurisdictional amount. 

The court held that the denial of intervention would not cause Progressive significant prejudice, as it could bring a separate action for declaratory judgment.  However, the court denied Progressive's motion to stay the lawsuit until Progressive filed its declaratory judgment action.

US District Court holds uninsured motorist coverage proceeds go to relatives of decedent insured, not estate

Michael Furlong was driving a pick-up truck southbound onto the Sagamore Bridge.  He swerved across the center line to avoid hitting  a vehicle that was merging.  He crashed into a minivan driven by Amnon Bogomolski.  Both men died as a result of the accident. 


Furlong's auto policy included $100,000 in uninsured motorist coverage.  Commerce had tendered the limits of the policy to settle Furlong's wrongful death claim against the unknown driver of the vehicle that was merging. 


Bogomolski's estate filed a wrongful death suit against Furlong's estate, and moved for what it called an attachment or to reach and apply the proceeds of the uninsured motorist insurance policy.  (The court noted that a motion for attachment or to reach an apply was technically premature until there was a judgment.  It treated the action one for preliminary injunction to restrain Commerce or the administrator of Furlong's estate from disposing of the property pending the outcome of the action.) 


The issue before the United States District Court in Bogomolsky v. Furlong, 2014 WL 29452927 (D. Mass. 2014) was whether the proceeds of the Commerce uninsured motorist policy were the property of Furlong's estate or of his daughter as his closest relative.  If the former, then the plaintiff could reach and apply the proceeds; otherwise, it could not. 


The court noted that under the Massachusetts Wrongful Death statute, the money recovered in a wrongful death claim is not a general asset of the estate, but constitutes a statutory trust fund held by the administrator of the estate as trustee for distribution to the statutory beneficiaries.   (In other words, under the wrongful death statute close relatives of the decedent can recover damages even if they are not included in the decedent's will and even if the decedent's debts exceed his assets.) 


Similarly, proceeds from a claim for ininsured or underinsured motorist insurance operates flow to the presumptive takers (i.e., the close relatives listed in the wrongful death statute), not to the estate.


The court held that Furlong's daughter, not his estate, was entitled to the proceeds of the uninsured motorist policy.  Therefore Bogomolski's estate could not reach and apply those proceeds. 

Massachusetts Appellate Division holds that insured may not recover against tortfeasor after receiving uninsured motorist coverage award

In Johnson v. Lapan, 2010 WL 1170254 (Mass. App. Div.), claimant Sylanda Johnson was injured when she was a passenger in a car that collided with a vehicle operated by Marc Lapan.

Johnson pursued two routes of recovery: she submitted a claim for uninsured motorist coverage to ELCO, the insurer of the vehicle in which she was a passenger, and she filed suit against the Lapans.

The uninsured motorist claim went to arbitration and Johnson was awarded $16,791.24 for pain and suffering and medical expenses.

The Massachusetts Appellate Division held that the doctrine of issue preclusion required that Johnson's claim against the Lapans be dismissed. The arbitrator had awarded to Johnson damages for her injuries, and that award fixed the damages in the suit against the Lapans arising from the same injuries. Johnson could recover such damages pursuant to an uninsured motorist policy (which she did) or from the tortfeasor, but not from both. Otherwise she would receive a double recovery.