Woman's Underinsured Motorist Claim dismissed as Farm Bureau exploits technicality
Farm Bureau Insurance has aggressively exploited the Engler Majority's willingness to protect Michigan insurers from claims by injury and casualty victims. Another example of Farm Bureau's never-pay attitude was provided in Feldkamp v. Farm Bureau, decided by the Court of Appeals in January of 2009. Feldkamp, badly injured in a 2002 motor vehicle collision, had purchased underinsured motorist (UIM) coverage from her own insurer, Farm Bureau. Typically, UIM coverage increases the at-fault's coverage limits to the same limits that an insured purchased for her own liability.
Feldkamp was so severely injured that the at-fault's insurance carrier, GMAC, agreed to pay her its policy limits almost immediately, however, Farm Bureau refused to grant Feldkamp the written consent required under the policy to settle with the at-fault. Feldkamp's attorneys became impatient with Farm Bureau's conduct and sought a court order compelling Farm Bureau to grant consent, which the court ordered after a hearing. Feldkamp's attorneys then settled with the at-fault and gave her the Release that GMAC demanded.
Farm Bureau appealed the lower court's ruling, claiming that the settlement with the at-fault, even though it was pursuant to the trial court's order, allowed Farm Bureau to cancel its UIM coverage. Farm Bureau did not prove that it could have collected anything from the at-fault by way of indemnity, and in fact that rarely occurs, as nearly all at-fault individuals are "judgment proof." Farm Bureau also claimed that the Engler majority's holding in Rory v. Continental Insurance eliminated the court's right to decide whether an insurance policy is ambiguous.
On appeal, the Court of Appeals upheld the lower court's ruling and Farm Bureau appealed to the Engler majority, itself. In 2007, the latter Justices reversed the two lower courts and remanded the case for further consideration. In response, the Court of Appeals held that Farm Bureau could enforce its decision to void the UIM policy that Feldkamp had purchased, without regard to whether Farm Bureau had actually suffered any loss of indemnity and regardless of Feldkamp's reliance on the trial court order.
The ultimate message for insureds remains one of caution and patience. Until the new composition of the Michigan Supreme Court has addressed some of the more aggressive anti-insured rulings of the Engler Majority, decisions about coverage and procedure must be made by insureds and their attorneys with the assumption that a Michigan insurer owes no duty of good faith or fair dealing. Farm Bureau is living proof that any loophole or technicality will be exploited.