In its recent decision in Transportation Ins. Co. v. Womack, the Virginia Supreme Court held that uninsured/under-insured motorist (UM/UIM) carriers who cede control over litigation to a defendant or his liability carrier retain their right to defend should their interests diverge from the interests of their codefendants. 2012 Va. Lexis 187. Chip Delano, a shareholder in Sands Anderson’s Coverage & Casualty Litigation Group, represented Transportation Insurance Company in its successful appeal.
The plaintiff, Sheila Womack, filed suit in the City of Richmond against the defendant, Jerrene V. Yeoman, for injuries sustained in an automobile accident allegedly caused by Yeoman’s negligence. The plaintiff served Transportation Insurance Company, the UIM carrier, pursuant to Va. Code § 38.2-2206(F). Both Transportation and GEICO, defendant’s liability carrier, filed separate answers denying the plaintiff’s allegations and asserting affirmative defenses. Importantly, Transportation reserved “the right to defend [its] case in its own name or in the name of the Defendant as permitted by [§ 38.2-2206(F)].” However, Transportation remained silent beyond this point and allowed the defendant and GEICO to control the litigation.
In the midst of the tort suit, the defendant filed for Chapter 7 bankruptcy in the Eastern District of Virginia. In her bankruptcy petition, the defendant listed claims of five million dollars each to the plaintiff, GEICO and Transportation. However, the defendant failed to designate whether these claims were disputed or contingent. The bankruptcy court subsequently granted the defendant’s petition and discharged the claims.
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Topics: Approbate, Chapter 7, Judicial Estoppel, Reprobate, Right To Defend, Uninsured and Under-Insured Motorists
Published In: Bankruptcy Updates, Civil Procedure Updates, General Business Updates, Insurance Updates, Personal Injury Updates
DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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