Estate of June M. Day v. Hanover Insurance Co.
Annotate this CasePetitioners, the Estate of June M. Day (Estate) and Byron and Stephanie Day, appealed a superior court's grant of summary judgment to Respondent Hanover Insurance Company, arguing Hanover's consent to settle a claim by Petitioners with the insurer of a third party tortfeasor did not preclude Hanover from contesting its liability to provide the Estate underinsured motorist coverage under its insurance contract with the Estate's decedent. In 2007, June Day was fatally injured in a motor vehicle accident. At the time of the accident, Day's vehicle was insured under an automobile liability policy and a personal umbrella policy issued by Hanover, and both policies provided underinsured motorist coverage. Following the accident, Petitioners made a claim against the third party's insurance company's policy. Hanover agreed that Petitioners could accept the settlement offered "while reserving [Hanover's] right to continue the investigation into liability in this matter," and noting that Hanover had "neither accepted nor denied liability." Petitioners accepted payment and executed a release to the third party and her insurance company. Thereafter Petitioners took the position that, by consenting to the settlement, Hanover was precluded from contesting that Petitioners were "legally entitled to recover" damages from the third party. Ruling on the parties' cross-motions for summary judgment, the trial court rejected Petitioners' position and dismissed the action. Petitioners filed an objection arguing that the court had "misunderstood the essence of the petition." Upon review, the Supreme Court affirmed, concluding that "the record supports the trial court's ruling regarding the litigation strategy the petitioners pursued below. . . . insofar as the petitioners complain that Hanover failed to exercise good faith in that it delayed investigating and processing their claim, we note that the petitioners at all times had it within their power under the terms of the policy to address this problem by demanding arbitration of its underinsured motorist claim against Hanover, or, alternatively, by filing a breach of contract action in court."
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