UM excess-limits carrier refuses to pay wrongful death, then interpleads policy limits. $451,112 bad-faith judgment. Los Angeles County.
Summary
Family sues for bad faith when insurer refuses uninsured motorist claim for wrongful death; insurer further claims that Medicare lien had to first be satisfied, and so interpleads disputed policy limits.
The Case
- Case Name: Diane Murray, Howard Murray and Celia Murray v. United States Liability Insurance Company
- Court and Case Number: Los Angeles County Superior Court, Central District / BC 453799
- Date of Verdict or Judgment: Monday, November 05, 2012
- Type of Case: Insurance – Bad Faith, Claims Handling
- Judge or Arbitrator(s): Hon. Debre K. Weintraub
-
Plaintiffs: Diane Murray, Howard Murray and Celia Murray (adult children of decedent).
-
Defendants: United States Liability Insurance Company
- Type of Result: Jury Verdict
The Result
- Gross Verdict or Award: $451,112: $150,000 verdict. $50,000 to each plaintiff, plus interest and attorney's fees. Total recovery of $1,996,481 including disputed policy limits.
- Trial or Arbitration Time: 26 days
The Attorneys
-
Attorney for the Plaintiff: Grassini & Wrinkle by Lawrence P. Grassini and Roland Wrinkle, Woodland HIlls.
-
Attorney for the Defendant: Hollins Law by Andrew S. Hollins and Kathleen Mary Kushi Carter, Irvine.
The Experts
-
Plaintiff's Technical Experts: Stephen D. Prater, insurance, San Jose.
-
Defendant's Technical Experts: Barry Zalma, insurance, Encino.
Facts and Background
-
Facts and Background:
The three adult plaintiffs (each in their 50s) were the children of Kathleen Murray, who was struck as a pedestrian by an uninsured motorist in May of 2009 and died a month later.
Plaintiffs made a claim for the uninsured motorist benefits
of $1,500,000, under their mother’s auto policy. The primary carrier eventually paid its $500,000 limits. The excess carrier, Defendant USLI, refused (or delayed in paying), claiming that, because excess UM policies are not subject to the Insurance Code,
that wrongful death damages were not covered and that the policy only covered the (substantial) medical and funeral expenses.Defendant USLI also argued that it couldn’t pay the medical expenses because of a Medicare lien which plaintiffs
refused to resolve. Plaintiffs sued USLI for the benefits and for bad faith. USLI filed an interpleader action against the plaintiffs and Medicare, impleading the disputed policy limits. Medicare removed that action to federal court. The federal court eventually remanded the interpleader action back to the state court, where it and the bad faith action proceeded to trial. -
Plaintiff's Contentions:
USLI unreasonably denied and then delayed payment of the UM benefits.
-
Defendant's Contentions:
It was reasonable to question whether wrongful death benefits were covered under the policy given the controlling policy language. Moreover, USLI owed a direct duty to Medicare to protect Medicare’s interest and it would have been a violation of that duty to pay the benefits only to the plaintiffs.
Injuries and Other Damages
-
Physical Injuries claimed by Plaintiff:
Emotional distress.
Demands and Offers
- Plaintiff Final Demand before Trial: $99,999,999 per defense counsel.
Additional Notes
In addition to the verdict, plaintiffs settled with a third party in the wrongful death case for an undisclosed amount.