MCGRANNAHAN V. BOMAR
INSURANCE: Underinsured motorist benefits and release of tortfeasor per Coots procedures
NOT TO BE PUBLISHED: 93
DATE RENDERED: 7/11/2008
The Estate contends that the circuit court erred by entering summary judgment dismissing its negligence claims against Bomar and Interlake (the employer).
The Estate maintains that no “settlement” occurred because there was no writing evidencing same and that even if a settlement did occur under Coots, the Estate never intended to release Bomar’s employer, Interlake. In support thereof, the Estate points out that it was unaware that Bomar was acting within the scope of his employment at the time of the accident when it accepted Bomar’s policy liability limit of $50,000. Thus, the Estate argues that summary judgment was improper.
In the case sub judice, the Estate admits that it “entered an agreement with Greene’s insurer, Safeco, that allowed Safeco to advance Bomar’s liability limits and protect its subrogation rights pursuant to the guideline of Coots v. Allstate.”
Under Coots, 853 S.W.2d 895 and True, 99 S.W.3d 439, it is clear that a tortfeasor’s liability insurance carrier’s offer to tender policy liability limits to an injured party is conditioned upon release of the tortfeasor from additional liability, and the injured party’s acceptance operates as a release of the tortfeasor from additional liability
We hold, therefore, that, under Coots, a tortfeasor's liability carrier's settlement offer is conditioned upon a release of its insured from any further liability to the injured party, and the injured party's acceptance of the UIM insurer's payment of the contemplated settlement is an acceptance of that condition and a release of the tortfeasor from any further liability to the injured party. The injured party's UIM insurer, however, preserves its subrogation claim against the tortfeasor for any amount that it is thereafter required to pay its insured under its UIM coverage.
Accordingly, we hold that State Farm’s offer to tender the liability policy limit of $50,000 to the Estate was conditioned upon release of Bomar from additional liability and the Estate’s acceptance of the substituted payment by Safeco operated as an acceptance of the condition and a release of Bomar from additional liability
As the Estate’s claim in the amended complaint against Interlake rested upon vicarious liability, these claims were, a fortiori, released by the Estate’s acceptance of the policy liability limit of $50,000. See Copeland v. Humana, 769 S.W.2d 67 (Ky.App. 1989). In sum, we are of the opinion that the circuit court properly entered summary judgment.
For the foregoing reasons, the summary judgment of the Fayette Circuit Court is affirmed.