State Farm Mutual Automobile Insurance v. Kelly

The issue in this appeal is whether, after an insured has obtained a judgment for the limit of uninsured motorist coverage, the insurer may reduce the payment to its insured by an amount paid prior to judgment for medical services rendered by the federal government.

In 1981, John F. Kelly was injured when an uninsured motorist struck the car in which he was a passenger. In 1983 Kelly filed suit against the uninsured motorist. In accordance with Code § 38.2-2206(F), Kelly served process on State Farm Mutual Automobile Insurance Company (State Farm), which provided uninsured motorist coverage on…