Farthing v. Allstate Insurance
10 A.3d 667
Me.2010Background
- Farthing was injured August 24, 2007 when her car collided with Openshaw's; damages exceeded $125,000 and Openshaw was negligent.
- Openshaw's insurer paid $20,000 to Farthing and others, in five equal shares; Farthing's share was $20,000.
- Farthing had UM coverage through Allstate with $100,000 per person; Allstate paid Farthing $80,000 (UM limit minus Openshaw payout).
- Farthing argued Openshaw's $20,000 payment reduces total damages, not UM coverage, entitling an extra $20,000 under UM.
- The Superior Court treated the case as a declaratory judgment action and offset Openshaw's payment against Farthing's UM limit, upholding Allstate.
- Farthing appeals the offset approach, seeking full UM limit recovery notwithstanding Openshaw's payment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does 24-A M.R.S. § 2902(4) mandate an offset against UM limits permiting a gap recovery? | Farthing argues the statute authorizes but does not require offset, so policy terms govern. | Farthing's interpretation would contradict the statute's goal of filling the gap with insurer protection. | Offset is mandatory and gap-based as statutorily required. |
| How is the recovery gap calculated between UM and tortfeasor payments? | Farthing contends damages are offset against total damages, not UM limit. | Tibbetts approach offsets the tortfeasor payment from the amount the tortfeasor would have paid if insured to the UM limit. | Gap is calculated by applying Tibbetts: if damages exceed UM, subtract tortfeasor payment from the hypothetical full UM recovery. |
| Does allowing the insured to recover more than the UM limit create a windfall contrary to the UM statute? | Farthing would recover $100,000 UM plus $20,000 tortfeasor payment. | Such a result would exceed what would be available if the tortfeasor were insured to the same extent and would violate the statute's purpose. | No windfall; the court's offset ensures recovery matches what would be available if tortfeasor were similarly insured. |
Key Cases Cited
- Tibbetts v. Dairyland Ins. Co., 2010 ME 61 (Me. 2010) (offsets UM coverage by tortfeasor payment to avoid double recovery)
- Jipson v. Liberty Mut. Fire Ins. Co., 2008 ME 57 (Me. 2008) (no authority to allow recovery beyond UM limit)