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State Farm Mutual Automobile Insuarance Co.11/7/2002
This is a dispute between a third party claimant and an automobile insurance carrier over the meaning of the terms of a settlement agreement. The claimant signed a full liability release in exchange for $7,500 and continued payment of medical bills, in accordance with the policy's personal injury protection (PIP) clause up to the limits of $35,000. PIP payments were, however, made expressly subject to all policy limitations. And the policy limits medical payments to three years from the date of injury. We agree with the trial judge that, based on the plain language of the settlement agreement and the pertinent provisions of the insurance policy, State Farm was no longer liable for medical expenses beyond three years after the date of the accident. We therefore affirm the summary dismissal of the claim.
I. FACTS
State Farm Mutual Automobile Insurance Company's insured, Shannon McMillen, struck Douglas Avery, a pedestrian. Douglas was 14 years old. He was injured. Ms. McMillen's policy included personal injury protection. The PIP coverage required payment of reasonable and necessary medical expenses incurred within three years of the accident, up to $35,000. Douglas's father, Don Avery, hired a lawyer and sued Ms. McMillen for damages. State Farm paid for Ms. McMillen's defense pursuant to the policy.
Two years later, in December 1997, Mr. Avery signed an agreement releasing all of Douglas's claims in exchange for $7,500 cash plus continued medical coverage. The key language promises:
payment of all reasonable and necessary medical bills in accordance with the provisions of Shannon McMillen's personal injury protection policy, including all limitations and exclusions, up to the policy limits of Thirty- Five Thousand ($35,000.00) Dollars, in full payment of all claims of every kind and nature arising out of or associated with {the November 3, 1995 accident}. Clerk's Papers (CP) at 92.
Mr. Avery was represented by counsel during negotiation and execution of the release. Also, Douglas's court-appointed guardian ad litem approved the settlement. The superior court approved the settlement. The three years for PIP expired on November 3, 1998.
In June 1999, seven months after the three-year limit expired, Mr. Avery sued in small claims court to recover $158.07 for a medical bill State Farm had refused to pay. The court entered judgment in favor of Mr. Avery for $170.84, including costs; State Farm paid.
In August, Mr. Avery again sued State Farm in small claims court for another medical bill, this time for $2,301. This time, State Farm filed a complaint in superior court for a declaratory judgment that it had no obligation under the settlement agreement to pay any medical expenses after November 3, 1998. The action in small claims court was stayed. From this point forward, Mr. Avery appeared pro se. Mr. Avery responded that State Farm's claims had already been judicially determined by the first small claims action. And he counterclaimed for emotional distress and bad faith. He also objected to a Walla Walla County venue.
State Farm moved for summary judgment. Mr. Avery moved to dismiss the motion and filed a detailed response with exhibits. At first, the court denied summary judgment. The court noted Mr. Avery's defenses of improper venue, collateral estoppel, and bad faith. The court also found disputed issues of material fact as to the intended meaning of the settlement language. At Mr. Avery's request, the matter was set for jury trial.
In the course of a pretrial hearing on jury instructions, the court reversed its previous summary judgment ruling. It now ruled that no issue of fact remained
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