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Appeals Court Says Accident Victims Wrongfully Denied Access to Insurance Records

Uninsured motorist coverage is designed to compensate car accident victims when the negligent parties lack sufficient insurance to cover all damages on their own. Typically a claimant must exhaust all other available insurance before receiving uninsured motorist benefits. But what happens when an insurance company represents both drivers in an accident, and the injured party has reason to believe the insurer is manipulating the situation to avoid paying a valid uninsured motorist claim? The Georgia Court of Appeals recently addressed such a case.

Chandler v. Liberty Mutual Fire Insurance Company

In April, 2010, a couple was traveling on a parkway with their daughter and another relative, the husband’s brother. While passing through a intersection with a green light, a drunk driver hit the family’s car, injuring all four occupants and damaging their vehicle. The wife in the injured vehicle and the negligent driver both had automobile insurance policies from the same company.

The attorney representing the couple and their daughter demanded the insurer pay $37,500 to settle all claims against the second driver, whose overall policy limit was $50,000 per accident. The wife further claimed $241,000 in benefits under her uninsured motorist policy. The husband’s brother negotiated a separate settlement with the insurance company.

The insurance company informed the couple the second driver’s insurance coverage had been exhausted and promised to pay the uninsured motorist claim. But the insurer later denied the wife’s uninsured motorist claim, saying the second driver’s policy had in fact not been exhausted. The couple then filed suit in Georgia state court against the insurer, arguing they were “purposely misled” by the insurer.

During pretrial discovery, the couple requested the insurer produce all documentation related to the husband’s brother’s settlement. The couple argued this evidence would held determine whether or not the second driver’s policy limit had been exhausted. The insurer objected, saying any information regarding the brother’s settlement was irrelevant. The judge reviewed the file, agreed there was nothing “discoverable,” and not only denied the couple’s motion but granted summary judgment to the insurer.

On appeal, the Georgia Court of Appeals reversed the trial court’s decision. By a 4-3 vote, the appeals judges said the trial court was wrong to deny the couple access to the brother’s settlement documents. “[W]e must construe the discovery procedure liberally in favor of supplying the [the plaintiffs] with the facts,” Judge M. Yvette Miller said, writing for the majority. Judge Miller said the trial court “took a narrow view of relevance,” and the Court of Appeals’ own review of the disputed file “shows that it contains evidence” the brother “settled for an amount sufficient to exhaust the limits of [the second driver’s] liability policy.” Because the couple was improperly denied access to this information, Judge Miller said the trial court was also premature in granting summary judgment to the insurance company.

Not all of the appeals judges agreed. Judge Stephen Louis A. Dillard, writing for the three dissenting judges, said “there was nothing included in these documents that appears reasonably calculated to lead to the discovery of admissible evidence.” And even if the plaintiffs had access to them, it would not prove the insurance company misled them.