In a Knox Circuit Court in the state of Kentucky, a trial was held in May of 2008 involving a car accident. In that car accident case, Mr. Harmon was hit by a car driven by Mr. Steele. It was established that both vehicles were going no more than 10 mph and neither went to the hospital. Mr. Harmon was later diagnosed with whiplash. Based on those injuries he sued Mr. Steele who had a $25,000 auto policy. Further, at trial, he also brought in and sued his under insured policy which was with Occidental Fire & Casualty (OFC). At trial, OFC made motions to be let out, but the trial judge denied these motions and the case went to the jury. The jury returned a verdict in excess of $250,000. The jury awarded Mr. Harmon $120,000 to be paid by OFC as per their UIM contract. (See Occidental Fire & Casualty Company v. Harmon, 2009 WL 4406065 (Ky.App.)). Both sides had Kentucky car accident attorneys representing their interests.
Accordingly, OFC appealed. The appellate court reversed stating that it was improper to have OCF involved in this trial as there was no Coots settlement. Id. OFC constantly objected at trial stating that it should not be a named party to the action as its relationship in this matter was purely contractual. Id. In an earlier Kentucky Supreme Court case, the Court did hold that identification of the UIM carrier at trial was required only in situations where the UIM carrier had protected its subrogation rights with a Coots procedure. Id. But, what about a situation like the case at hand where the UIM carrier had no Coots agreement? In another Kentucky Supreme Court case, this exact situation was decided. Under that fact pattern, the Court ruled that the UIM carrier did not have to be identified at trial. Id. It stated that when the UIM carrier has not reached a Coots settlement with the tortfeasor, the tortfeasor remains primarily liable to the plaintiff. Id. The UIM carrier is only potentially liable, contingent upon a judgment in excess of the tortfeasor’s own liability coverage. Id. (A Kentucky car accident attorney can assist in explaining a Coots settlement.) Without a Coots settlement, the UIM carrier is not a real party in interest but is only potentially liable by contract if the tortfeasor is found liable. Id.
The appellate court then looked at whether naming the UIM carrier at trial was an abuse of discretion and something that could cause the case to be reversed. In deciding that issue, the court looked at the long standing rule that liability insurance is not to be mentioned at trial. Id. The basis of that policy decision has long been that inherent prejudice results from a jury knowing of the existence of liability insurance. Accordingly, in that OCF was not a real party in interest, it was wrong for the trial court to not exclude OCF from the jury. Id. Accordingly the case was reversed and remanded back to Knox Circuit Court for a new trail. Id. (Andrew Alitowski is a Kentucky car accident attorney that can explain this case for you.)
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