UIM - Insurers' Waiver of Coverage Defense: Travelers Indemnity Co. of Connecticut v. Worthington


Travelers Indemnity Co. of Connecticut v. Worthington, [Ms. 1150370, Oct. 13, 2017] __ So. 3d __ (Ala. 2017). This decision by Justice Wise (Stuart, C.J., Bolin, Parker, Main, and Bryan, JJ., concur, Murdock, J., concurs in part and concurs in the result; Shaw, J., concurs and Sellers, J., dissents), affirms a judgment on a jury verdict against Travelers for UIM benefits.

On the eve of trial, the plaintiff Worthington settled with and released the tortfeasor Thomas without affording Travelers an opportunity to advance the amount of the settlement offer. The policy required the insured to provide Travelers notice prior to releasing the tortfeasor. Ms. *3-4.

After learning of the eve of trial settlement, Travelers did not amend its answer nor did it argue to the trial court that the insured’s failure to provide notice forfeited the UIM coverage. The Court noted that

At no time before the trial started or at any time during the trial proceedings did Travelers present to the trial court its argument that Worthington had forfeited coverage by entering into the settlement agreement with Thomas. Rather, it proceeded to trial on a stipulation that UIM coverage existed and that the policy covered the claims asserted by Worthington. ... Travelers went so far as to tell the jury in closing arguments that it should return a verdict in favor of Worthington and that the only dispute was the amount of damages that should be awarded.

Ms. *32.

The Court affirmed the judgment on the jury verdict against Travelers holding that “one who has stipulated to certain facts is foreclosed from repudiating them on appeal.” Ms. *42 (internal quote marks omitted). The Court also held that “Travelers has not presented any argument to establish that the trial court exceeded its discretion in not considering the merits of its forfeiture-of-coverage defense.” Ms. *43.

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