Summary
The Supreme Court of Kentucky held that an underinsured motorist carrier must be identified to the jury when it is a named party and preserves its subrogation rights through the Coots procedure. The court concluded that withholding the carrier's identity was fundamentally misleading and reversible error, and remanded for a new trial. Separate opinions concurred in and dissented from the majority's treatment of insurance-related prejudice.
Topics
Practice areas
Questions Presented
- Whether a UIM carrier that is a named party and invokes the Coots procedure to preserve subrogation rights must be identified to the jury as a party at trial.
- Whether withholding the identity and participation of the UIM carrier from the jury constitutes reversible error.
Holdings
- A named UIM carrier that invokes the Coots procedure to preserve its subrogation rights must be identified to the jury as a party at trial.
Key quotations
“Such a trial is fundamentally misleading to the jury and it deprives a plaintiff of the right to try her case against the party she chooses.” (258)
“Therefore, we hold that the failure to identify to the jury a named party defendant at trial that is also the plaintiff's UIM carrier to be reversible error.” (261)
Factual background
Bonita Earle was injured in a February 17, 1998 automobile accident involving Alice Cobb. Earle sued Cobb for negligence and her own UIM carrier, Indiana Insurance Company, for UIM benefits. Cobb's liability insurer offered its $25,000 policy limit, but Indiana Insurance substituted its payment under the Coots procedure to preserve subrogation rights against Cobb. The trial court withheld Indiana Insurance's identity and UIM coverage from the jury, which returned a verdict awarding Earle $1,500.
Procedural history
Earle sued Cobb for negligence and Indiana Insurance Company for underinsured motorist benefits. Indiana Insurance invoked the Coots procedure by substituting its payment for Cobb's liability insurer's settlement offer, thereby preserving its subrogation rights against Cobb. The trial court ordered the UIM claim to be addressed after the verdict and prohibited disclosure of Indiana Insurance's UIM status to the jury. The Court of Appeals affirmed, and the Supreme Court reversed and remanded for a new trial.
Remand instructions
Remand to the trial court for a new trial in which Indiana Insurance Company is identified to the jury as a named party defendant and UIM carrier.