Accepting $2,500 cost this injured plaintiff a shot at $75,000

In Re: Central Mutual Ins. Co. (Bemiss), N.Y.S. Court of Appeals, 12 NY3d 648 (June 25, 2009)

Plaintiff Bemiss (insured by Central Mutual-$100k SUM underinsured motorist coverage) in an accident. Her car was rear-ended by Kowalczyk car (insured by GEICO-$25k); Genski car (insured by Progressive-$25k) then rear-ended Kowalczyk car pushing it into rear of Bemiss car a second time.

Bemiss seriously hurt. She required surgery to repair her injured Achilles tendon.

Bemiss settled with Kowalczk (GEICO) for $25k and sought permission to settle from Central Mutual for the $25k per N.Y.S. Insurance Regulation 35-D. She also accepted $2,500 from Genski (Progressive), without mentioning the $2,500 to Central Mutual Ins. She waited thirty days as required by Regulation 35-D and signed one release covering both tortfeasors (Kowalczyk and Genski) and both their carriers (GEICO and Progressive). Then she demanded SUM underinsured motorist arbitration.

Court of Appeals holds that failure to request permission to settle for the $2,500 from Genski (Progressive) or to preserve Central Mutual's subrogation right in he release of Genski (Progressive) violates SUM provisions of Bemiss' Central Mutual Ins. policy and SUM arbitration is forever stayed. Court of Appeals noted that if Kowalczyk hadn't taken the $2,500, or had asked for permission to take the $2,500 (as she did with the $25,000), or preserved Central Mutual's subrogation right in her release as to the $2,500, there would be no problem proceeding with arbitration, because she would have honored the provisions of her insurance policy with Central Mutual Ins.

So for accepting $2,500, Bemiss loses a shot at $75,000.

I'm thinking, why not let Bemiss give back the $2,500? Maybe in a perfect world . . . .

From New York attorney Gary E. Rosenberg (personal injury and accident attorney and lawyer; serving Brooklyn Queens Bronx; Brooklyn Accident Lawyer)