What Happens if Defendant Wins at Trial?

Under new 38.2-2206(L), effective for policies which are issued or renewed in 2016 before the plaintiff’s crash, the plaintiff is entitled to receive the defendant’s available policy limits, without prejudice to her claim for UIM benefits. Both the plaintiff and the defendant sign the liability carrier’s release and payment is made to the plaintiff.

In this example, the defendant’s liability insurance company, Geico, sends the plaintiff’s lawyer a settlement check for $25,000.00 early in the case. The plaintiff then brings her UIM claim against her UIM carrier, State Farm. She sues Joe, “the released party”, not the UIM carrier. The UIM carrier is only served with a copy of the suit papers – it is not a defendant. The jury does not know and is never told that Joe is released. The jury believes that Joe is the one who pays the verdict. Any verdict against the defendant is paid by State Farm, the plaintiff’s UIM carrier.

The case against Joe goes to trial and is defended by the plaintiff’s UIM carrier. Surprise!

Joe Brown was right. The plaintiff has already been paid $25,000.00 by Geico. The jury finds for Joe at trial. Can Geico, Joe’s liability carrier, get its $25,000 it paid to the plaintiff back?

Answer: No. “Upon payment” of Geico’s available liability policy limits to the plaintiff, the case is settled forever with Geico. Joe has been completely released at the moment of payment. The “game is over” for them. Geico has no right to get its money back. But, obviously, State Farm is not required to make any UIM payment to the plaintiff as no judgement was entered against the defendant, Joe.

Gerald Schwartz has been named to Virginia Super Lawyers since 2007. If you need help with an auto injury insurance claim, call Gerald for a free consultation.