North Carolina Supreme Court Discusses Whether Defendant is Entitled to an Offset for Insurer’s Underinsured Motorist Coverage Payments

If you are injured in a motor vehicle accident, you probably have questions about whether you are entitled to compensation. This may include questions about how your insurance policies apply to the accident and whether you are eligible for benefits. At Maurer Law, our Raleigh personal injury lawyers are available to assist you with evaluating your claim and determining whether you are entitled to compensation.

In a recent opinion, the North Carolina Supreme Court considered an appeal involving a dispute about how an insurance policy should be interpreted in a personal injury case. The plaintiff was injured in a motor vehicle accident. At the time of the crash, the plaintiff had an insurance policy that provided underinsured motor vehicle coverage subject to a limit of $250,000 per person. The defendant also had an insurance policy with a per person liability limit of $100,000.

The plaintiff filed a complaint seeking damages for the accident, alleging that the defendant’s negligence caused the crash to take place. In the complaint, the plaintiff sought compensation for past and future medical expenses, lost wages, permanent injuries, and pain and suffering. The jury returned a verdict concluding that the defendant was negligent and awarding the plaintiff $263,000 in compensation.

The next month, the plaintiff’s auto insurer issued a check to the plaintiff totaling $145,000 for the amount of underinsured motorist coverage to which the plaintiff was entitled in the policy. Soon after, the defendant filed a motion asking the trial court to provide an offset and credit for payments that the defendant alleged the plaintiff had already received. This included $3,000 from the defendant’s insurer and at least $30,000 from a doctor who the plaintiff sued in the same litigation for medical negligence stemming from the treatment he received after the crash. The defendant also argued that because the plaintiff’s insurer waived its right to be subrogated to the plaintiff’s rights against the defendant, the defendant was entitled to a credit of $145,000.

The trial court granted the defendant’s motion and the plaintiff appealed, alleging specifically that the judgment should not have been offset by the $145,000 underinsured motorist coverage payment. The plaintiff alleged that this violated the collateral source rule, which does not allow a plaintiff’s recovery to be reduced by another source of compensation collateral to the defendant. The Court of Appeal upheld the lower court’s ruling, finding that offsetting the $145,000 payment was appropriate.

The plaintiff appealed again to the Supreme Court, which reversed the lower courts’ rulings. It concluded that the lower court should not have allowed the payment to be a credit against the jury’s damages verdict. The Supreme Court stated that payments received through an underinsured motorist policy should not be credited against a judgment entered against a defendant.

If you were injured in a motor vehicle accident, contact Maurer Law today to learn more about your potential claim for compensation. We know just how overwhelming this process can be and we are ready to assist you with all phases of litigation. This includes gathering evidence, negotiating with insurance companies on your behalf, and taking your case to trial. To schedule a free consultation, contact one of our team members at 1-888-258-1087 or contact us online to get started.

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