Rare court victory for injured drivers fighting their insurance companies
The Fourth Court of Appeals in San Antonio issued an important decision on Wednesday that awarded an injured driver his entire underinsured motorists (UIM) benefits. The holding in Allstate Insurance Company v. Irwin is only the second time that an appellate court has allowed a plaintiff to obtain Texas UIM benefits without first filing suit and obtaining a judgment against the adverse driver. Further, it is the first time that the recovery of attorney’s fees and costs has been allowed.
Background: Mr. Irwin was seriously injured in a car crash in 2016. He suffered a herniated disc in his lumbar spine and had to undergo various procedures to alleviate his pain. The total cost of his medical treatment was substantial. He settled with the at-fault driver’s insurance company for her policy limits of $30,000.00. He then demanded that his liability insurance company pay his underinsured policy limit of $50,000.00 for his remaining damages. However Allstate refused and only offered an additional $500.00 claiming that his injuries were preexisting, that he was over 50 years old, and that he worked as a construction worker. The man filed suit for the money his company owed him from his UIM policy.
After hearing the evidence, the jury awarded him $498,968.36. The court signed a judgment awarding the plaintiff his policy’s limit of $50,000.00, attorney’s fees, and costs. Allstate appealed.
Issues: Can a plaintiff receive his UIM benefits after settling with the adverse driver out of court and can attorney’s fees be awarded?
Allstate argued that the plaintiff had to first file a lawsuit and obtain a judgment against the at-fault motorist, then sue the liability carrier in a second case required by the 2006 Texas Supreme Court decision in Brainard v. Trinity Universal Insurance Company.
But Irwin argued that Brainard did not apply since that was a breach of contract case filed under the Texas Civil Practice and Remedies Code, Chapter 38. Instead he had sought a declaration that he has the right to recover under his Texas UIM benefits policy. Further, the legislature said that the UDJA must be liberally construed when it adopted the law.
The court observed that Brainard seemed to suggest that such an alternative may exist and that the insured driver may instead settle with the at-fault driver before filing a declaratory judgment lawsuit against his UIM company. Therefore, the trial court’s judgment was affirmed and the plaintiff’s excess damages were awarded.
This is the second appellate court to allow an out of court settlement, not a court judgment, to predicate a UIM claim. The first was Allstate Insurance Company v. Jordan, a 2016 decision from the Texarkana court.
Congratulations to the Crosley Law Firm for its excellent result.
The importance of Texas UIM benefits
Underinsured motorists benefits are essential for a driver to have since most drivers in Texas only purchase the minimum amount required. They are only $30,000.00 per person, $60,000.00 for all persons injured, and $25,000.00 for all vehicle and property damage. However medical bills, lost wages, disability, pain, and other damages can be substantial.
These amounts have not been raised since 2011 even though medical costs have spiralled by 20%. As a result, a serious crash often leaves injured people with giant medical bills and damages in excess of these limits with no way to pay them.
And that assumes that the other driver who caused the crash even has a valid liability insurance policy, let alone that his company is going to pay your damages. UIM is part of coverage that includes uninsured motorist (UM) protection, badly needed since at least 20% of drivers in Texas may not have liability insurance according to the State of Texas. We think this number is even higher.
We encourage all Texas drivers to purchase UM and UIM benefits as well as Personal Injury Protection benefits. That allows you to be paid your damages if an uninsured or underinsured motorist collides with your vehicle. If you need help finding a good company to insure you, here is a good search tool that can help you save money by comparing prices.
For more on this topic:
Recovering money if driver is uninsured or underinsured