BMHJ Blog: Legal Information, Resources, & News: Traffic / DUI / Misdemeanors

Bills of interest that will become law effective July 1, 2019, include the following:

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In a personal injury case pending in the Circuit Court of Fairfax County, the defendant’s insurer tendered its policy to the plaintiff, pursuant to Section K, with the expectation that its duty to defend would end, and the UIM carrier would absorb the defense. In that case, the release was not signed by the defendant and the UIM carrier objected to the insurer’s attempt to withdraw from the defense of the case asserting that there was non-compliance with Va. Code Section 38.2-2206(L). Pursuant to Section L, in order for the liability insurer to settle with the plaintiff and have the UIM carrier’s subrogation rights extinguished, the settlement must be in writing and signed by both the plaintiff and underinsured motorist (i.e. the defendant). Section L requires specific “Notice to Release Party” which states that the underinsured motorist must initial it. Even though the notice was mailed, as represented later in court in accordance with the statute, the trial court held that the release needed to be signed by the defendant in order to extinguish the UIM carrier’s subrogation rights. The court also commented that the statute was less than clear. As a result, the defendant’s attorney, who was retained by the underlying insurer, was not allowed to withdraw from the case. This was also AFTER the policy limits had been paid to the plaintiff. The take away under the present statute is for the underlying carrier to make all efforts to obtain the defendant’s signature on the release in compliance with the statute. If the defendant cannot be located, then prior to tendering the policy limits agreement should be obtained from the UIM carrier to the motion to withdraw from the defense.

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