Superior Court County: Snohomish. Superior Court Cause No: 93-2-00395-0. Date filed in Superior Court: September 27, 1994. Superior Court Judge Signing: Hon. James H. Allendoerfer.
Written by: Judge Webster, Concurred by: Judge Kennedy, Judge Ellington
WEBSTER, J. -- Viking Insurance Co. is suing the tortfeasor
to recover the personal injury protection (PIP) benefits that it paid to its insured. The tortfeasor contends that the injured party extinguished the insurer's subrogation interest by executing a general release and accepting a settlement that included an allocation for the PIP benefits. The trial court granted summary judgment to the tortfeasor. We reverse.
Gregory Nelson's contract for automobile insurance with CIGNA (d/b/a Insurance Company of North America) protected him against liability claims up to $100,000. Tildrea Clark had automobile insurance through Viking Insurance Co. (hereafter Viking). Nelson caused an automobile accident in which Clark was injured.
Viking paid Clark $18,505 in PIP benefits. Viking notified CIGNA that it had paid PIP benefits to Clark, and requested reimbursement. Viking also requested information as to Nelson's policy limits, so that it could anticipate an under-insured motorist (UIM) claim by Clark. CIGNA informed Viking that Nelson had $100,000 in coverage and that $6,975 had been paid for Clark's property damage, leaving $93,025.
Clark's attorney, Don Buckland, wrote to CIGNA, contending that Viking would have no subrogation interest in any settlement between CIGNA and Clark because Clark would not be made whole by Nelson's remaining coverage. Buckland demanded that Nelson's remaining policy limits be paid directly to Clark:
As such, I would ask that you (CIGNA) pay all the third-party liability limits to our office and we, in turn will hold the disputed subrogated amounts in an interest-bearing trust account until resolution of the underlying UIM matter. We would give you a Hold Harmless Agreement to such effect.
CIGNA counter-offered $70,000, which Clark rejected.
Viking refused Clark's request to waive its subrogated interest, advised Buckland that it would seek recovery of the PIP benefits directly from CIGNA, and requested that Clark/Buckland not prejudice Viking's right of recovery. CIGNA subsequently offered ...