Insurance lawyers in Fort Worth and elsewhere need to read this case regarding settlement credits and under-insured (UIM) coverage. It is from the Houston Court of Appeals [14th Dist.]. It is styled, Farmers Texas County Mutual Insurance Company v. Okelberry, et al.
Steven Okelberry and his wife, Patricia has UIM coverage with Farmers. Steven and his two sons were injured in an accident caused by an 18 wheeler insured by Home State. Steven suffered a neck injury requiring surgery and possibly future surgeries.
Home State settled Steven’s property damage claim for $20,066.12 out of a total policy limits of $750,000. Steven and his two sons sued the 18 wheeler company and its driver for their personal injuries.
Farmers gave Steven consent to settle the lawsuit for himself and his two sons for $729,993.88, which was the remaining liability coverage on the policy. Under the settlement agreement the parties agreed to the following terms:
- $269,212.06 payable to Steven’s counsel on Steven’s behalf;
- $320,776.71 payable to Steven and Patricia;
- $50,000.00 payable to Ingenix Subrogation Services on Steven’s behalf.
The three checks totaled $639,988.77. The check for $320,776.71 was made payable to Patricia and Steven jointly. The balance was paid on behalf of the sons.
The above are the underlying facts and then, Steven, on behalf of himself and his sons, sued Farmers for UIM benefits. The kids were eventually dismissed from the lawsuit. At trial, the jury awarded Steven $825,675.84 for past and future physical pain, mental anguish, physical impairment, and medical expenses, as well as past loss of earning capacity. This amount exceeded Farmer’s $500,000.00 policy limit.