McArthur v. State Farm Mut. Auto. Ins. Co.
Annotate this CaseAfter sustaining injuries in an auto accident, Tavis McArthur filed this suit in federal district court to recover underinsured motorist (UIM) benefits under his State Farm automobile insurance policy. The district court granted summary judgment in favor of State Farm, concluding that McArthur had failed to exhaust the liability limits of the tortfeasor's insurance, a precondition of his UIM benefits policy. On appeal, the Tenth Circuit Court of Appeals certified two questions to the Utah Supreme Court. The Supreme Court held (1) exhaustion clauses that require the liability insurer to pay out its full policy limits before permitting payment of UIM benefits are generally enforceable in the State of Utah; and (2) because UIM exhaustion provisions are conditions precedent and not covenants capable of being breached, no showing of prejudice is required to sustain their invocation.
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.