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Henry v. Government Employees Insurance Co.

United States District Court, D. South Carolina, Charleston Division

August 2, 2017

David Henry, Plaintiff,
v.
Government Employees Insurance Company, Defendant.

          ORDER AND OPINION

          Richard Mark Gergel United States District Court Judge

         This matter is before the Court on Defendant Government Employees Insurance Company's ("GEICO") Motion for Summary Judgment and Plaintiff David Henry's Motion to Certify Questions. (Dkt. Nos. 40, 41.) For the reasons set forth below, Defendant's Motion for Summary Judgment is granted, and Plaintiffs Motion to Certify Questions is denied.

         I. Relevant Facts

         A. The Accident

         On September 3, 2011, Plaintiff David Henry was an employee of Aaron's, Inc. and a passenger in an Aaron's truck when the truck was rear-ended by a vehicle operated by Sam Knowlin, an underinsured motorist. (Dkt. No. 40-1 at 4.) Henry sustained injuries, and his medical bills totaled $10, 617.71. (Dkt. No. 40-7 at 10.) Henry's physician gave him a note a little over a month after the accident allowing him to return to work without accommodations. (Dkt. Nos. 40-4 at 6, 40-5.) GEICO insured both the at-fault driver, Knowlin, and David Henry.

         B. The Insurance Policy

         Prior to the accident, on May 14, 2011, GEICO had issued an insurance policy (the "Policy") to Jonnie Ruth Lawson of Aaron's, Inc., that provided liability, uninsured, and underinsured motorist ("UIM") coverage. (Dkt. No. 40-2 at 2.) The UIM portion of the Policy states that GEICO "will pay damages for bodily injury and property damage caused by an accident which the insured is legally entitled to recover from the owner or operator of an underinsured motor vehicle." (Id. at 5.) Under the Policy, GEICO maintains the right to participate in and to defend any UIM claim. (Id. at 6.) The coverage limit for UIM claims is $25, 000 and includes a standard offset provision under which any amount the insured would be entitled to recover "from the owner or operator of an underinsured motor vehicle because of bodily injury or property damage caused by an accident" is reduced by any sums already recovered from several other sources, including workers' compensation and amounts recovered from claims against legally responsible persons. (Id. at 2, 6, 7.)

         C. Henry Recovers $50, 395.61 Through his Workers' Compensation and Liability Claims and Proceeds to Seek UIM Benefits Under the Policy

         On February 2, 2013, Henry's workers' compensation carrier paid him $25, 395.61 in benefits. (Dkt. No. 40-7 at 5-8.) On September 16, 2013, Henry filed a lawsuit against Sam Knowlin, the at-fault driver. That action proceeded to mediation at which Henry executed a Covenant Not to Execute in exchange for receiving $25, 000 on his liability claim. (Dkt. No. 40-6.) On December 10, 2014, after settling the liability portion of his claim against Knowlin, Henry served GEICO as the UIM carrier, seeking the $25, 000 in UIM coverage. GEICO stepped in to defend the action.

         D. The Parties Cannot Agree on a Settlement and Proceed to Trial

          The parties could not agree about whether Henry's damages were sufficient to reach the UIM coverage in part or in full. (Dkt. No. 40 at 2.) As explained above, GEICO was entitled to offset Henry's UIM recovery by the $50, 395.61 he had already recovered through his workers' compensation and liability claims. A jury would therefore have had to find Henry's damages to be in excess of $50, 395.61 before GEICO would owe any money to Henry under the UIM policy. A jury would have had to find Henry's damages to be in excess of $75, 395.61 before GEICO would owe Henry the full UIM coverage policy limit of $25, 000.

         GEICO did not expect that a jury would award Henry $75, 395.61 because Henry's medical bills were only $10, 617 and, although Henry claimed lost wages close to $20, 000 for missing work from September 2011 to December 2012, Henry's physician had given him return-to-work authorization without any restrictions just one month after the accident. Finally, GEICO relied on the advice of its counsel Ed Lawson, who did not believe a jury would award Henry damages in excess of the sums he had already received that would offset his UIM recovery. (Dkt. No. 40-11 at 2-3.)

         In the weeks leading up to trial, the parties exchanged settlement offers and counteroffers. On May 11, 2015, Henry offered $10, 000 to settle, but he later reduced his demand to $5, 000. (Dkt. No. 40-11 at 3-4.) GEICO offered to settle the case for $2, 500, and Henry rejected that offer. (Id.) Unable to reach a settlement agreement, the parties went to trial on June 15, 2015 at the Georgetown County Court of Common Pleas. (Dkt. No. 40-1 at 8.) After two days of testimony, the jury awarded Henry damages of $250, 000. (Id.) GEICO tendered the available $25, 000 UIM policy limit to Henry. (Dkt. No. 40-7 at 12.)

         E. Henry Files this Lawsuit Against GEICO Alleging Bad Faith ...


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