UIM Policy Reduced Limit Reduced by Amount Paid by Other Insurers
Barry Zalma
Feb 6, 2024
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Post 4729
In an interpleader action involving the insurance coverage for survivors of a tragic auto accident De Smet Insurance Company of South Dakota (De Smet) proposed distribution of the available insurance funds that had been paid into the Court.
In Hallmark Insurance Company, De Smet Insurance Company; and National Casualty Company v. Gail Hoefert and Aaron Hoefert, as personal representatives of The Estate Of Andrew Joseph Hoefert; Gail Hoefert and Kerry Hoefert, as Legal Guardians of B.E.H. minor and C.T.H. minor; et al, No. 4:22-cv-4069, United States District Court, D. South Dakota, Southern Division (January 29, 2024) the court resolved the dispute.
BACKGROUND
The Hoefert Family-Jennifer, Andrew, Jennifer’s daughter, and the two young children of Jennifer and Andrew- were traveling on Interstate-90 in rural Montana. The driver of a Chevrolet Suburban crossed the center line, striking the Hoeferts’ rental car, and killing himself and all occupants of the Hoefert car except the two young children. The latter were seriously injured and are currently under the guardianship of Gail Hoefert and Kerry Hoefert.
Plaintiff Hallmark insured the tortfeasor and filed this interpleader action to determine the liability of the insurance companies toward the survivors. Hallmark tendered $50,000, the amount of coverage in its policy. Two other insurance companies are involved. National Casualty insured the rental car occupied by the Hoefert Family, which carried coverage of $50,000 that has been tendered to the Court. De Smet was the insurance company of the Hoeferts, who had an underinsured motorist (UIM) policy of $500,000. De Smet has tendered $400,000 to the Court in satisfaction of the Hoefert Estates’ claims.
Insurance Contract Provisions Governing Hoefert Estates Claims
The insurance policy De Smet provided to the Hoeferts lists “C. Underinsured Motorist Bodily Injury – $250,000 ea person, $500,000 ea accident.” The De Smet policy provided that “The limit of liability shown in the Declarations for each person for Underinsured Motorists Coverage is our maximum limit of liability for all damages, including damages for care, loss of services, or death, arising out of ‘bodily injury’ sustained by any one person in any one accident. Subject to this limit for each person, the limit of liability shown in the Declarations for each accident for Underinsured Motorists Coverage is our maximum limit of liability for all damages for ‘bodily injury’ resulting from any one accident."
ANALYSIS
In addition to their serious physical injuries, the surviving children of the Hoeferts have experienced the tragic loss of their parents and older sister. Apart from the emotional impact, the economic loss has been and will continue to be significant. The court realized that payment of the insurance proceeds at issue in this case will only compensate a part of the total losses.
The disagreement presented was how to calculate the proper payment of the insurance coverage. The Hoeferts’ insurance policy with De Smet provided for $500,000 in underinsured motorist coverage. The policy also provides in Section D OTHER INSURANCE that the maximum amount that will be paid is the “highest limits of underinsured motor vehicle coverage that the ‘insured’ specifically requested under any one policy.”
This means that if a person with a De Smet policy of this type purchased, for example, an umbrella policy from another insurer which included underinsured motorist coverage of $500,000 and thought this was increasing the UIM coverage to one million dollars under both policies, the person would in fact receive no additional UIM coverage because of the language of the De Smet policy.
Because the Estates were compensated $100,000, De Smet claimed, based on the policy wording, that it owes only the amount of what is said to be “uncompensated damages” remaining, amounting to $400,000. The damages for which no compensation will be received clearly exceeds $500,000.
CONCLUSION
De Smet has moved for summary judgment, arguing the issue presented is legal, not factual. De Smet deposited with the court $400,000 that it believed was all it owed. The total amount Hoefert Estates would receive is $500,000. Hoefert Estates argued the calculated its rights differently. The total for the Estates under that argument would be $550,000 taking into account the fact that there are two UIM coverages involved in the case.
South Dakota’s statute authorizing payment of underinsured motorist damages that are uncompensated and the provisions of the insureds’ De Smet policy. Because Hallmark and National together compensated the Estates in the amount of $100,000, De Smet is responsible for only $400,000 under the statute and its policy with the Hoeferts.
ZALMA OPINION
There was no question that the various insurers owed money to the estates. They deposited into court the amounts they believed was owed under the terms of the policy and the statutes of the state of South Dakota. The court read all the policies applied their terms and South Dakota statutory law and concluded that the policies must be enforced as they were written and the estates were only entitled to the highest limit of Underinsured Motorist Coverage available, $500,000.00.
(c) 2024 Barry Zalma & ClaimSchool, Inc.
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Montana County Attorney Admits to Insurance Fraud & Is Only Suspended from Practice for 60 Days
Post 5251
Read the full article at https://lnkd.in/gnBaCjmv, see the video at https://lnkd.in/gfpVsyAd and at https://lnkd.in/gC73Nd8z, and at https://zalma.com/blog plus more than 5250 posts.
A Lawyer Who Commits Insurance Fraud and Pleas to a Lower Charge Only Suspended
In The Matter Of: Naomi R. Leisz, Attorney at Law, No. PR 25-0150, Supreme Court of Montana (December 23, 2025) the Montana Office of Disciplinary Counsel (ODC) filed a formal disciplinary complaint with the Commission on Practice (Commission) against Montana attorney Naomi R. Leisz.
On September 25, 2025, Leisz tendered a conditional admission and affidavit of consent. Leisz acknowledged the material facts of the complaint were true and she had violated the Montana Rules of Professional Conduct as alleged by ODC.
ADMISSIONS
Leisz admitted that in April 2022, her minor son was involved in a car accident in which he hit a power pole. Leisz’s son ...
Montana County Attorney Admits to Insurance Fraud & Is Only Suspended from Practice for 60 Days
Post 5251
Read the full article at https://lnkd.in/gnBaCjmv, see the video at https://lnkd.in/gfpVsyAd and at https://lnkd.in/gC73Nd8z, and at https://zalma.com/blog plus more than 5250 posts.
A Lawyer Who Commits Insurance Fraud and Pleas to a Lower Charge Only Suspended
In The Matter Of: Naomi R. Leisz, Attorney at Law, No. PR 25-0150, Supreme Court of Montana (December 23, 2025) the Montana Office of Disciplinary Counsel (ODC) filed a formal disciplinary complaint with the Commission on Practice (Commission) against Montana attorney Naomi R. Leisz.
On September 25, 2025, Leisz tendered a conditional admission and affidavit of consent. Leisz acknowledged the material facts of the complaint were true and she had violated the Montana Rules of Professional Conduct as alleged by ODC.
ADMISSIONS
Leisz admitted that in April 2022, her minor son was involved in a car accident in which he hit a power pole. Leisz’s son ...
Insurer’s Exclusion for Claims of Assault & Battery is Effective
Post 5250
Read the full article at https://lnkd.in/gBzt2vw9, see the video at https://lnkd.in/gEBBE-e6 and at https://lnkd.in/gk7EcVn9, and at https://zalma.com/blog plus more than 5250 posts.
Bar Fight With Security is an Excluded Assault & Battery
In The Cincinnati Specialty Underwriters Insurance Company v. Mainline Private Security, LLC, et al., Civil Action No. 24-3871, United States District Court, E.D. Pennsylvania (December 16, 2025) two violent attacks occurred in Philadelphia involving young men, Eric Pope (who died) and Rishabh Abhyankar (who suffered catastrophic injuries). Both incidents involved security guards provided by Mainline Private Security, LLC (“Mainline”) at local bars. The estates of the victims sued the attackers, the bars, and Mainline for negligence and assault/battery. The insurer exhausted a special limit and then denied defense or indemnity to Mainline Private Security.
INSURANCE COVERAGE
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Court Must Follow Judicial Precedent
Post 5252
Read the full article at https://www.linkedin.com/pulse/sudden-opposite-gradual-barry-zalma-esq-cfe-h7qmc, see the video at and at and at https://zalma.com/blog plus more than 5250 posts.
Insurance Policy Interpretation Requires Application of the Judicial Construction Doctrine
In Montrose Chemical Corporation Of California v. The Superior Court Of Los Angeles County, Canadian Universal Insurance Company, Inc., et al., B335073, Court of Appeal, 337 Cal.Rptr.3d 222 (9/30/2025) the Court of Appeal refused to allow extrinsic evidence to interpret the word “sudden” in qualified pollution exclusions (QPEs) as including gradual but unexpected pollution. The court held that, under controlling California appellate precedent, the term “sudden” in these standard-form exclusions unambiguously includes a temporal element (abruptness) and cannot reasonably be construed to mean ...
Lack of Jurisdiction Defeats Suit for Defamation
Post 5250
Posted on December 29, 2025 by Barry Zalma
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He Who Represents Himself in a Lawsuit has a Fool for a Client
In Pankaj Merchia v. United Healthcare Services, Inc., Civil Action No. 24-2700 (RC), United States District Court, District of Columbia (December 22, 2025)
FACTUAL BACKGROUND
Parties & Claims:
The plaintiff, Pankaj Merchia, is a physician, scientist, engineer, and entrepreneur, proceeding pro se. Merchia sued United Healthcare Services, Inc., a Minnesota-based medical insurance company, for defamation and related claims. The core allegation is that United Healthcare falsely accused Merchia of healthcare fraud, which led to his indictment and arrest in Massachusetts, causing reputational and business harm in the District of Columbia and nationwide.
Underlying Events:
The alleged defamation occurred when United ...
Zalma’s Insurance Fraud Letter
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ZIFL Volume 29, Issue 24
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Zalma’s Insurance Fraud Letter (ZIFL) continues its 29th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at http://zalma.com/zalmas-insurance-fraud-letter-2/
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