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Gearhart v. Mutual of Enumclaw Ins Co. – UIM Anti-Stacking Language Invalid

Many auto insurance policies contain anti-stacking provisions that are intended to avoid applying multiple sets of deductibles or multiple sets of limits to cover a single car accident. It’s important that Florida car accident victims understand whether their policy allows for stacked coverage because it can significantly impact the amount of damages to which you are entitled.

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The allowance of these provisions with respect to uninsured motorist (UM)/ underinsured motorist (UIM) coverage varies significantly from state-to-state.

Recently, the Idaho Supreme Court considered whether the UIM anti-stacking language in two separate policies that covered a young man seriously injured in an auto accident was valid. In Gearhart v. Mutual of Enumclaw Ins Co., the divorced parents of a young man seriously injured in a crash both sought UIM benefits under separate auto insurance policies that both covered him in the event of a crash. Now, following the court’s ruling, they’ll be able to collect on those benefits, which will go toward helping their son recover.

According to court records, a young man was a passenger in a vehicle driven by a female friend operating her brother’s car when the driver crashed the car. She was negligent in causing the crash. The auto accident left the young man with severe and permanent traumatic brain injuries that have left him with permanent cognitive defects.

It’s never been in dispute in this action that his injuries resulted in far more than $600,000 in damages. The question is the amount of damages his parents are individually entitled to collect.

There were three separate auto insurance policies under which the young man was covered. Those included:

  • One policy held by the vehicle owner (driver’s brother);
  • One policy held by victim passenger’s mother;
  • Another policy held by victim passenger’s father.

The first provided bodily injury coverage to the injured passenger, while the other two provided UIM benefits to him. Both of the separate policies held by his parents offered up $300,000 each for UIM benefits. Those policies were each under the same insurance company. The policies in both cases stated that when there was other applicable insurance, “We will only pay our share.”

Defendant insurer agreed it would pay the difference between the amount the vehicle owner’s insurer paid and the $300,000 limit of the policies. However, the insurer argued anti-stacking provisions prohibit plaintiffs from collectively taking in any more than $300,000.

Plaintiff’s parents then filed a complaint alleging:

  • Breach of contract for failure to pay the remaining $300,000;
  • Bad faith for engaging in adjusting practices designed to deprive plaintiff of benefits owed;
  • Punitive damages for extreme deviation from reasonable standards fo conduct;
  • Attorney fees.

The trial court granted plaintiff’s motion for summary judgment on the breach of contract claim and the claim for attorney fees, finding that if the policies were applied strictly, each was only in excess to each other and that the entire provision – including the anti-stacking language – had to be disregarded because each policy had to be considered independently.

The Idaho Supreme Court affirmed upon appeal.

Although the insurer argued the trial court was wrong to rely on its “excess coverage provision”  in finding the entire anti-stacking provision unenforceable, the state supreme court disagreed.

A successful claim for breach of contract will allow plaintiff’s parents to collect even above and beyond the original UIM amount.

Call Freeman Injury Law — 1-800-561-7777 for a free appointment to discuss your rights. Now serving Orlando, West Palm Beach, Port St. Lucie and Fort Lauderdale.

Additional Resources:

Gearhart v. Mutual of Enumclaw Ins Co., July 27, 2016, Idaho Supreme Court

More Blog Entries:

Florida Bus Accident With Truck Kills 5, Injures 25, July 23, 2016, West Palm Beach Auto Accident Lawyer Blog

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