West v. United Services Automobile Ass’nAnnotate this Case
Peter Lee and three other passengers were injured in a single vehicle accident. The driver held an insurance policy issued by USAA Casualty Insurance Company and United States Automobile Association (collectively, USAA), and all of the passengers were covered by TRICARE. TRICARE paid medical benefits for the passengers and asserted medical payment liens for the passengers’ combined medical expenses. Lee made a settlement demand on USAA for Perez’s $100,000 policy limits. USAA offered to pay the policy limits provided that Lee first secure lien releases from TRICARE. TRICARE eventually waived its liens, and USAA issued a check for the policy limits of $100,000. Lee continued his suit against Perez after receiving the policy limits payment from USAA. Perez agreed to a consent judgment and assigned his claims against USAA to Lee. Elizabeth West, acting as guardian ad litem for Lee, filed suit asserting that USAA acted in bad faith by conditioning payment on resolving the TRICARE liens. The district court granted summary judgment for West, holding USAA liable to Lee for the consent judgment. The Supreme Court reversed, holding that USAA’s grounds for conditioning its payment of policy limits upon resolution of the TRICARE liens were reasonable under existing law, and therefore, USAA was entitled to judgment as a matter of law.