Appeal from the Circuit Court for Anderson County No. 99LA0472 James B. Scott, Judge
The opinion of the court was delivered by: Charles D. Susano, Jr., Judge
State Farm Insurance Company filed a declaratory judgment action seeking a determination as to its liability under the uninsured motorist ("UM") coverage of an automobile insurance policy issued to Charles Schubert. Schubert and his wife had obtained judgments against an uninsured motorist totaling $330,000. Of this amount, Schubert was awarded $260,000 for his injuries. His wife, Clara Schubert, was awarded $70,000 for loss of consortium. At the time of the automobile accident that gave rise to the underlying claims, Schubert was acting within the course and scope of his employment; as a result of his injuries, he received workers' compensation benefits of $89,518.08. We are asked to decide how much of the UM single-person coverage limit of $100,000 is payable in view of the language of the following provision of the policy as it applies to the UM coverages:
Any loss or expense paid or payable under any worker's compensation law...will not be paid again as damages under [the uninsured motorist] coverages.
The insured contends that he is entitled to $100,000; State Farm argues that its liability is limited to $10,481.92, being the difference between the UM coverage limit of $100,000 and the amount of the compensation payments. The trial court agreed with State Farm. We reverse.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Reversed; Case Remanded
Charles D. Susano, Jr., J., delivered the opinion of the court, in which Houston M. Goddard, P.J., and Herschel P. Franks, J., joined.
The underlying facts of this case are not in dispute. The trial court correctly stated them as follows:
On March 5, 1996, an accident occurred in Anderson County, Tennessee, and Mr. Schubert was injured. He was traveling as a passenger in a 1993 Chevrolet Van owned by his employer, Poston and Company, Inc., when a vehicle driven by Charles A. Smith struck the van. Mr. Schubert was employed by Poston and Company, Inc., and was working in the course and scope of his employment. He petitioned the Court for an order approving a Workers' Compensation settlement for the injuries arising out of the accident, and such order was approved and entered on June 19, 1997.
The claim was approved by the Court in the total amount of $89,518.08 and comprised medical bills of $50,195.84, temporary total disability payments in the amount of $8,800.00, and permanent partial disability payments of $30,522.24.
Mr. Schubert and his wife also filed a personal injury complaint...in the Anderson County Circuit court. The action sought recovery for damages arising from the same injuries that were the basis for the Worker's Compensation approved settlement.
The complaint was served on State Farm as the uninsured motorist carrier for the Schuberts, who carried $100,000 of uninsured motorist coverage. State Farm filed a motion and answer while the actual tortfeasor, defendant Charles A. Smith, filed bankruptcy and did not make an appearance in the tort action. State Farm, through Counsel, attended and participated at the trial of the tort action on October 12, 1999. The jury awarded damages for Charles Schubert in the amount of $260,000, and for Clara Schubert in the amount of $70,000. An order was entered on October 25, 1999.
The Schuberts then requested payment of State Farm of the $100,000 uninsured motorist limits set out in the policy and State Farm declined, asserting policy provisions allowing a reduction in an amount equal to that paid in the Workers' Compensation settlement.
In the instant case, State Farm filed an action for declaratory judgment. In its complaint, the insurance company asserted that it is entitled to a setoff of $89,518.08 against the UM coverage under its policy with Mr. Schubert. As previously noted, $89,518.08 is the amount of the insured's settlement with the workers' compensation carrier. Thus, State Farm claims that it is only liable under the UM coverage for $10,481.92, being the difference between its single-person UM limit of $100,000 and the amount of the compensation settlement of ...