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Allstate Insurance Co. v. Rush12/27/2000
In this personal injury action, Joe and Pamela Rush settled with one of three tortfeasors for less than the tortfeasor's policy limits. They then obtained a favorable judgment against the remaining two uninsured tortfeasors and Allstate Insurance Company (Allstate), their own uninsured motorist (UM) carrier. The trial court refused to set off the first tortfeasor's policy limits from this latter verdict and entered judgment accordingly. Allstate appeals from this judgment. We hold the trial court erred by failing to set off a portion of the underinsured tortfeasor's policy limits from the total damages award and reverse.
Background
This case involved a multi-vehicle accident. The Rushes' automobile was forced to stop suddenly when a vehicle driven by Ms. Montenegro cut in front of them. Stopping suddenly caused the Rushes to get rear-ended by a vehicle driven by Mr. Aiello, who was then hit from behind by a vehicle driven by Ms. Buchholz. When Ms. Buchholz hit Mr. Aiello, Mr. Aiello's vehicle hit the Rushes' car for a second time.
The Rushes sued the above tortfeasors and Allstate, their own UM carrier, since Mr. Aiello and Ms. Montenegro were both uninsured, as a result of injuries each sustained during the above accident. Prior to trial, the Rushes settled with Ms. Buchholz and her insurance carrier, GEICO, for $14,000, even though her policy limits were $100,000. The settlement did not allocate the monies between Mr. and Mrs. Rush. The Rushes did not obtain Allstate's permission to settle with GEICO for $14,000. The Rushes then released GEICO and Ms. Buchholz from any future liability. They did not receive Allstate's permission to release these two parties.
Before trial, Mr. Rush voluntarily dismissed his personal injury claim. Allstate and the Rushes agreed to handle all collateral source issues after trial. After trial, the jury found Ms. Montenegro 55% negligent, Mr. Aiello 30% negligent, and Ms. Buchholz 15% negligent. It awarded Mrs. Rush $60,240.90, broken down as follows: $20,818.90 for past medical expenses; $17,500 for future medical expenses; $8,960 for past lost earnings; $4,200 for future earnings; $1,536 for past pain and suffering; and $7,200 for future pain and suffering.
Thereafter, Allstate filed a motion for a collateral source determination. It alleged that, under Florida Statutes, section 627.727(6)(c) (1993), it should receive a set-off of $100,000 (Ms. Buchholz's policy limits with GEICO) against the entire jury award. At the hearing that followed, Allstate also argued that the unauthorized settlement prejudiced its subrogation rights with respect to Ms. Buchholz because the Rushes executed a general release in her and GEICO's favor. The Rushes, relying on Florida Statutes, section 768.81 (1993), countered that had Ms. Buchholz remained a defendant in the trial, she would have been liable for only 15% of the non-economic damages. As such, they posited that Allstate's argument, that the court should nevertheless set off the verdict by $100,000 and enter a judgment of $0, was absurd.
The trial court sided with the Rushes. It found that although the Rushes' settlement with Ms. Buchholz was obtained without Allstate's authority or consent, Allstate was not prejudiced because Buchholz's responsibility for Mrs. Rush's total damages was only 15%, an amount less than the settlement. The court explained,
I don't see that there is any prejudice . . . because it was a fourteen thousand dollar settlement, and this lady was only fifteen percent negligent, and when you run the figures on that with the settlement or with the jury verdict awards, it doesn't appear to me like there was any prejudice to Allstate .
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