Trial judge's decision holding auto insurer in contempt is reversed
The Clare County Circuit Court judge entered an order holding Integon National Insurance Company in contempt at the conclusion of a pretrial settlement conference. The insurer sold Uninsured and Underinsured Motorist Coverage in the amount of $50,000.00 to Kevin Bencheck, who was later injured in a Clare County car accident. Bencheck claimed that the at-fault driver was underinsured and pursuant to his policy with Integon, he joined his own insurer in the lawsuit.At the settlement conference, Integon took the position that pursuant to its policy language, it was not obligated to make any settlement offer until the at-fault's insurer offered to pay its policy limits (probably the State's 1974 minimum coverage of $20,000.00). Apparently impatient with the two insurers for their failure to resolve the claim, the trial judge ruled that Integon had violated his order requiring the insurer to attend the conference "with settlement authority" and fined Integon. Integon settled Bencheck's claim but appealed the judge's contempt order fining it several hundred dollars.
The Court of Appeals overturned the trial judge's decision. It noted that under existing Michigan law, the insurer was not obligated to offer any settlement. Since Uninsured and Underinsured Motorist Coverage are not mandatory, the insurer can place any limitations it chooses on payment, and the Court is obligated to enforce the policy language as written, regardless of whether it meets the "reasonable expectations" of insureds (or the court).
This is the kind of law we get when the State Chamber of Commerce--whose Board is dominated by insurance companies--donates several million dollars each to support the candidacy of Republican Supreme Court nominees.