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H.B.H. v. State Farm Fire and Casualty Co.9/10/1991
ution to avoid unnecessary litigation would be to stay the default hearing on damages until after the coverage question is resolved.
H.B.H. and the Does maintain that allowing State Farm to intervene will defeat the practical effect of Damron agreements, as well as the holding in Morris, and will discourage such agreements in the future. They note that a large part of H.B.H.'s consideration for entering the Damron agreement was that she and the child would not have to face a trial or a contested hearing on damages. This may be true. However, this ruling will not affect or thwart the ability to settle questions of liability and to obtain guaranteed settlements from insureds personally. The risk is the same that the insurer will be later found not liable or that if it is liable, it will be able to contest the reasonableness of the judgment pursuant to Morris. Thus, H.B.H.'s concern that the child not be put through the rigors of unnecessary discovery and trial is unfounded if State Farm is determined to be liable under the policies in the declaratory action.
We conclude, therefore, that State Farm has a right to intervene pursuant to Rule 24(a) solely for the purpose of contesting the reasonableness of the damages award, and that it was error to deny its motion. Accordingly, the judgment is reversed and this matter is remanded for proceedings consistent with this opinion.
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