Date: 01-27-2025

Case Style: Anna K. Andrews and Eric J. Andrews v. Freeway Motors, Inc., et al.

Case Number:

Judge:

Court: Superior Court, King County, Washington

Plaintiff's Attorney:

Defendant's Attorney: Not Aavailable

Description: Seattle, Washington personal injury lawyer represented the Plaintiffs who sued on auto negligence theories.

Anna Andrews was injured in an accident involving three vehicles. She and her husband sued the other drivers, Alexandra Fox and John McAlpine, as well as Freeway Motors, McAlpine's employer. Andrews[1] had underinsured motorist coverage through Privilege Underwriters Reciprocal Exchange (PURE), who intervened in the suit. Andrews entered into a covenant judgment settlement with Fox. After a reasonableness hearing, the court determined the amount of $2.8 million in principal for the covenant settlement was reasonable. The court denied PURE's motion for a determination that it was entitled to a trial on damages, concluding it was bound by the amount the court approved after a reasonableness hearing pursuant to RCW 4.22.060.

We accepted discretionary review of the court's certified question: whether Andrews's UIM insurer, PURE, who intervened and participated in the reasonableness hearing that determined the covenant settlement between Andrews and Fox, the tortfeasor, to be reasonable, is entitled to a separate jury trial on damages. We conclude that the settlement that was determined to be reasonable by the trial court provides the presumptive measure of the damages that Andrews is legally entitled to recover, and that amount is binding on PURE because it had notice and an opportunity to intervene.

* * *

In Washington, it has long been established that "an insurer will be bound by the 'findings, conclusions and judgment' entered in the action against the tortfeasor when it has notice and an opportunity to intervene in the underlying action." Fisher v. Allstate Ins. Co., 136 Wn.2d 240, 246, 961 P.2d 350 (1998) (quoting Finney v. Farmers Ins. Co., 21 Wn.App. 601, 618, 586 P.2d 519 (1978), aff'd, 92 Wn.2d 748, 600 P.2d 1272 (1979)); East v. Fields, 42 Wn.2d 924, 925, 259 P.2d 639 (1953) ("when an insurer has notice of an action against an insured, and is tendered an opportunity to defend, it is bound by the judgment therein upon the question of the insured's liability"). This rule, often referred to as the "Finney-Fisher" rule, applies both to liability and to UIM insurance. See Fisher, 136 Wn.2d at 246-47 (noting with approval that Finney, 21 Wn.App. at 618, extended the rule from East, which involved liability insurance, to UIM insurance); Lenzi v. Redland Ins. Co.,140 Wn.2d 267, 282, 996 P.2d 603 (2000) (the UIM insurer who received timely notice of action, yet did not intervene, was bound by plaintiffs' default judgment against the tortfeasor); Hawkins v. ACE Am. Ins. Co., __Wn. App. 2d __, __ n.12, 558 P.3d 157, 166 n.12 (2024) (discussing cases applying East rule to UIM insurance).

Outcome: Affirmed

Plaintiff's Experts:

Defendant's Experts:

Comments: