2015 Va. Cir. LEXIS 230
Spotsylvania Cir. Ct.2015Background
- Plaintiff Conner was injured in a 2011 motor-vehicle accident; tortfeasor liability policy limits were $25,000.
- Conner’s UIM coverage with Liberty Mutual had approximately $23,000 available.
- Pretrial the liability carrier offered policy limits; Liberty Mutual’s highest pretrial offer was $5,000.
- Jury returned a $200,000 verdict for Conner at trial; both the liability carrier and Liberty Mutual promptly paid their policy limits after the verdict.
- Conner filed a post-trial motion seeking damages, costs, and attorney’s fees from Liberty Mutual for alleged bad faith in settlement negotiations and sought production of Liberty Mutual’s file via subpoena duces tecum.
- Liberty Mutual moved to quash the subpoena and opposed the bad-faith relief; the court heard argument and took the matter under advisement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a UIM carrier can be subject to a pretrial/post-trial bad-faith claim under Va. Code § 8.01-66.1 | Conner: § 8.01-66.1 and some circuit opinions allow post-trial bad-faith claims against a UIM carrier based on pretrial conduct | Liberty: Under Midwest Mutual, a UIM insurer owes no duty to pay until insured establishes legal entitlement (i.e., judgment exceeds tortfeasor limits); no bad-faith claim exists pre-judgment | Court held Liberty Mutual cannot be liable for bad faith absent a legal entitlement to collect against the underinsured tortfeasor (motion denied) |
| Whether subpoena duces tecum for Liberty Mutual’s entire file is discoverable | Conner: seeks insurer file to support bad-faith claim | Liberty: discovery improper because no cognizable bad-faith claim exists against UIM carrier pre-judgment | Court granted Liberty Mutual’s motion to quash the subpoena |
| Whether plaintiff is entitled to sanctions, fees, or attorney’s fees from Liberty Mutual for alleged bad faith | Conner: seeks sanctions/fees as relief for bad-faith conduct | Liberty: not liable for sanctions/fees absent recognized bad-faith cause of action against UIM carrier | Court granted Liberty Mutual’s opposition and denied relief to Conner |
Key Cases Cited
- Midwest Mut. Ins. Co. v. Aetna Cas. & Sur. Co., 216 Va. 926, 223 S.E.2d 901 (1976) (UIM carrier’s obligation arises only after insured is legally entitled to recover against tortfeasor; distinguishes liability insurer duties)
- State Farm Mut. Auto. Ins. Co. v. Kelly, 238 Va. 192, 380 S.E.2d 654 (1989) (supports principle that UIM duty to pay depends on insured’s legal entitlement to recovery)