Wednesday, April 11, 2007

Erie Insurance Exchange v. Heffernan, II, et al. (Court of Appeals)

Filed April 10, 2007 --Opinion by Judge Clayton Greene

The parents of a child killed in an automobile accident when the driver fell asleep sued for benefits, pursuant to two policies of insurance issued to them by Erie Insurance Exchange. The Court of Appeals held that, in a breach of contract action for benefits, pursuant to the uninsured/underinsured provisions of an automobile insurance contract executed in Maryland, what the parents were "entitled to recover" was determined by Delaware substantive law because the law of the situs of the accident controlled the tort aspects of the claim, including questions of liability and damages raised in an uninsured motorist claim.

Prior to filing the contract action, the parents had settled the underlying tort claim against the underinsured tortfeasor. Because Erie approved the settlement with the tortfeasor, the Court noted that Erie was bound by that settlement and, therefore, liability was not at issue. The Court also concluded that Maryland's public policy exception to the doctrine of lex loci delicti does not require the application of Maryland's statutory cap on non-economic damages or application of Maryland's contributory negligence principles.

The opinion is available in PDF.

No comments: