No UM where Insured settled for less than tortfeasor's limits
In Porter v. State Farm Mutual Automobile Insurance Co., 2010 OK CIV APP 8, the plaintiff, Porter, was a passenger who was injured in a car wreck. State Farm insured the driver and also insured Porter on her own car. The driver had limits of $100,000. State Farm offered to settle her claim against the driver for $85,000 and Porter accepted, even after being told that she would not be entitled to UM if she did so. She took the settlement and then continued her claim for UM. Plaintiff believed she was entitled to UM because State Farm was the automobile insurance carrier for both Plaintiff and the tortfeasor, despite having settled with the tortfeasor for an amount less than the liability limits of tortfeasor’s policy.
Before an insured can proceed in an action to recover UM/UIM benefits under the contract, he must prove the existence of two simultaneous conditions precedent: 1) that he has a legal right to recover against the tortfeasor, and 2) that his claim exceeds the available liability coverage of the tortfeasor. These conditions precedent must both be present at the same time in order to obtain UM/UIM coverage. Porter could not meet the first requirement because she released the driver from liability. She could not meet the second requirement because by accepting less than the liability-policy limits and releasing the driver from further liability, she established that the claim did not exceed the available liability coverage. In other words, Plaintiff cannot prove the driver was underinsured.
