Michigan Court of Appeals: Driver With Abundant Unused Insurance Is Not Underinsured When Fault Is Less Than Proportionate Share Of Damages

It has been said that the hardest thing in the world is to get an orchestra started; the second hardest thing is to get it to stop.  I’ve also seen this definition of an orchestra: a collection of musicians that invariably passes up a good opportunity to quit playing.  Finally, this saying: some musicians take pains with their music, others give them.

I’ve often felt the same sayings can be applied to legal writing.  So, to that extent, I enjoy legal writing that knows what it needs to say, says what it needs to say, and then shuts up.  Such is Allied Property and Casualty Ins. Co. v. Ellinger, 2006 WL 2519605 (Mich.App. August 31, 2006).  Here is a link.  It’s nothing fancy, but has some concise analysis on a tricky question.

Dorothy Blanchard, a passenger in a car driven by David Gorman, was killed in a crash with a vehicle driven by Lawrence DeHaan.  Her estate brought a wrongful death suit against both drivers and settled with their insurers: $50,000 from Gorman’s insurer on limits of $500,000 primary with a $1 million umbrella, and $100,000 from DeHaan insurer on a $100,000 policy.   The estate then brought an underinsured motorist claim against her own insurer, Allied, for the remainder of her damages.  Because underinsured motorist coverage applies only when the limits of a tortfeasor’s insurance are less than his proportionate fault, Gorman was not an uninsured driver, only DeHaan was.  (Liability in Michigan for personal injuries is several only, not joint.  In some states, like Washington, liability is joint if the injured party is not at fault).  

The trial court had failed to apportion fault, so the court of appeals remanded for that determination.  Allied therefore would not necessarily be liable up to its underinsured limit for uncompensated damages, only for those damages for which DeHaan was responsible.  The Court of Appeals also looked at the "other insurance" clause in the Allied policy in the same light.  Although the clause made the Allied policy excess to "other valid and collectible insurance," the court said Gorman’s policy was not collectible merely because $1.45 million remained on its limits.  The settlement with Gorman’s insurer, the court said, precluded argument that the remaining limits were collectible insurance, and Gorman’s insurance payment was merely a set-off against other amounts owed.

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