Riley v. State Farm Mut. Auto. Ins. Co.
Annotate this CaseAfter appellant Stephanie Riley, who was insured by State Farm, was involved in a car accident, Riley settled with the tortfeasor's insurer, GEICO. Riley asserted that State Farm filed a lien on her settlement before it knew whether she would be made whole by the settlement. After taking her case to trial court, Riley appealed with a Ark. R. Civ. P. 54(b) certification the dismissal of count one of her amended petition for declaratory judgment and complaint, which sought a declaratory judgment that appellee State Farm had failed to establish a legal lien or right to subrogation under Arkansas law. The Supreme Court reversed and remanded, holding that the circuit court erred in interpreting Ark. Code Ann. 23-89-207 and the state's subrogation law. The subrogation lien cannot arise, or attach, until the insured has received the settlement proceeds or damage award and until there is a judicial determination that the insured has been made whole.
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