out of the initial slip opinion, and are not contained in the final opinion of the Court. The conclusions of law contained in these three passages are lost forever, as the Court of Appeals does not keep the original slip opinions that are later replaced and there is no method for ac- cessing the original slip opinions of the Court. Fortunately, your author saved the original slip opinion due to the stun- ning nature and potentially wide spread consequences of the three passages. The first omitted passage reads as follows: Ordinarily, the Heffernans would have the burden of proving that the underinsured motorist was at fault and the amount of damages, but it appears because the Heffermans accepted the tortfeasor’s settlement offer, the Heffernans do not have the burden of proving that the un- derinsured motorist was at fault.
See page 18 of initial slip opinion. The logic is again repeated at page
20: “Because the underlying tort claim against the underinsured tortfeasor settled, there is no longer a valid ques- tion as to the underlying tort liability; the only remaining issue for resolution is damages.” The final omitted pas- sage appeared on page 37: “Therefore, because the issue of liability has been resolved by the virtue of the settlement of the underlying tort, there remains only the issue of damages; and the is- sue of damages is controlled by the substantive law of Delaware.” This was a stunning revelation, considering that neither the Plaintiff nor the Defense bars ever approached the trial of a UIM motorist case in this fashion. The UIM carrier always had the presumed right to challenge the underlying tort liability in the breach of contract case. For this reason, Plaintiffs’ attorneys were always mindful of executing a release against the tortfeasor driver in those cases wherein a suit had not been filed and the testimony of the Defendant was required to establish primary negligence. These cases necessarily arise when the Plaintiff has no recollection of the collision due to injury. Once the release was executed, the Defendant could disappear forever,
48
leaving the Plaintiff ’s lawyer in a seri- ous predicament. (This is no longer a concern under Maurer providing that the UIM carrier consents to the tort settlement.) All of the defense attorneys and
corresponding carriers who had UIM motorists cases pending on April 10, 2007, and who read the slip opinion in Erie, were undoubtedly taken aback by the above three passages. They were equally fearful that any previously con- sented to settlement of the underling tort matter by the UIM carrier would
tort case against the auto-tort defendant, thereby waiving its right of subrogation, it may no longer litigate the liability issues arising out of the automobile collision. The only issue remaining for the Court’s consideration is the issue of Plaintiff ’s damages. In Maurer, the Plaintiff was injured in an automobile collision and filed suit against the defendant driver. The is- sues in Maurer did not concern a claim by any party that tort defenses were waived when Pennsylvania National consented to David Maurer’s acceptance
The Court must have realized that the dicta in Erie was misplaced and would cause unnecessary confusion for the UIM carriers.
now, as a matter of law, preclude the litigation of the underlying tort defenses in the ongoing breach of contract case. Insurance carriers who had agreed to waive their right of subrogation, and permitted the Plaintiff to accept, for example a $20,000 liability limits offer, had acted on the assumption that all of their tort defenses remained in tact. Truly, the Court of Appeals did not mean what it said? Two months later, on June 13, 2007, when the Court of Appeals’ opinion was revised and void of any language pertaining to the waiver of tort defenses, every insurance defense at- torney and UIM carrier breathed a sigh of relief. The Court must have realized that the dicta in Erie was misplaced and would cause unnecessary confusion for the UIM carriers. All was well. The Plaintiff and Defense bar resumed the litigation of the UIM cases as before with no worries.
Six Months Later On Dec. 6, 2007, the Court of Ap-
peals shocked the bar when it released its opinion in Maurer, and held that when a UIM motorist carrier agrees to a Plaintiff ’s settlement of the underlying
Trial Reporter
of the tortfeasor’s liability policy limits of $25,000. GEICO insured the tort defendant. Mr. Maurer had purchased the sum of $225,000 in UIM motorist coverage from Pennsylvania National. Pursuant to Md. Code Ann., Ins. Art. § 19-511 et seq., Mr. Maurer placed his own UIM carrier (Pennsylvania Na- tional) on notice of the liability policy limits offer, and complied with the pro- cedures for accepting the tortfeasor’s liability limits. There is no language in Section 19-511
that speaks to the waiver of tort defenses when the UIM carrier consents to the Plaintiff accepting the tortfeasors’ li- ability limits. The Plaintiff and Defense bar were under the apparently false impression that, when the UIM carrier waives its right of subrogation against the defendant tortfeasor, it retains all tort and contract defenses. The Court of Ap- peals has now informed us that we were wrong with respect to the tort defenses. The last two sentences of the opinion in Maurer sums up the Court’s holding: “Since Penn National consented to the settlement in this case, it should not have been allowed to contest the issues of tort liability. Any new trial shall be limited to the matter of damages.” Maurer, 404
Summer 2008
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