Exchange of Structured Settlement Payments for Lump Sum Was Invalid

In re Rapid Settlements v. Symetra Assigned Benefits Serv. Co. (June 5, 2006)

In two unrelated cases, settling defendants purchased annuities from Washington insurer Symetra Life Insurance Company to fund structured settlements with North Carolina beneficiaries. The beneficiaries then agreed with factoring company Rapid Settlements, Ltd., to exchange their rights to some of the future periodic payments for lump sum payments. Over insurer Symetra’s objection, Rapid Settlements obtained court approval of the exchanges in accordance with Washington law. But the court of appeals consolidated appeals by Symetra and reversed on two alternate grounds.

First, the court held that the transfers violated the Washington Structured Settlement Protection Act, chapter 19.205 RCW, as well as North Carolina law. One violation was Rapid Settlements' failure to provide a disclosure statement setting forth all the structured payments to be “encumbered.” Rapid Settlements' disclosure set forth only the transferred payments. The court found that provisions of the transfer agreement, such as a grant of power of attorney, a right of first refusal, and a penalty provision, encumbered all the future periodic payments, not just those transferred. Second, the court held that anti-assignment clauses in the settlement and annuity agreements were enforceable by Symetra.

Read more...

Umbrella Policy’s UIM Endorsement Expands the Amount, Not the Scope, of UIM Coverage Provided by Underlying Policies

Christal v. Farmers Ins. Co. of Wash. (May 23, 2006)

Motorcyclist Richard Christal was struck and killed by an underinsured motorist (UIM). The Christals owned Farmers policies covering four automobiles and Christal's motorcycle, as well as an umbrella policy. The automobile policies provided UIM coverage, but the motorcycle policy did not. The umbrella policy supplemented UIM coverage “to the extent” such coverage was “a part of” the underlying policies. Farmers denied coverage for Christal’s death.

Christal’s estate argued that, although the motorcycle policy did not provide UIM coverage on the motorcycle policy, the umbrella policy provided UIM coverage because UIM coverage was “a part of” the four automobile policies. The trial court granted summary judgment to Farmers, and the court of appeals affirmed. The court reasoned, “An average purchaser of insurance would understand that the umbrella policy expands the amount, not the scope, of UIM coverage[.]” If the result were otherwise, the court continued, “an insured could obtain UIM coverage for any number of vehicles for a single premium,” which would “nullify the underlying policies’ exclusion for uninsured vehicles owned by an insured.”

Read more...

911 Operator Owes No Duty to Caller Absent "Express Assurances"

Harvey v. Snohomish County (Wash. S. Ct., May 18, 2006)

A man who had a painted face, appeared to be wearing a straight jacket, and claimed to be “serving God” attacked Robert Harvey, his infant son, and his neighbor Alex Keltz in Harvey’s condominium. Keltz called 911 as the assailant was breaking into the condo and then passed the phone to Harvey. Harvey asked the operator what to do, and the operator told him he should do whatever he felt was most safe to do. Harvey fired at the assailant and fled as police outside prepared to address the situation.

Harvey sued the county, the sheriff and others for negligence and the trial court dismissed on summary judgment. Under established Washington law, a 911 operator owes no duty to a member of the public unless he gives an express assurance of assistance. The court of appeals reversed summary judgment, finding a question of material fact as to whether the 911 operator gave Harvey express assurances that he justifiably relied on to his detriment. The supreme court disagreed, concluding that (1) no assurance was ever sought by Harvey, (2) no assurance was ever given by the operator, and (3) even assuming a duty had been established, there was no showing of reliance or breach.

Read more...