Scholfield Bros. v. State Farm Mutual Automobile Insurance

The opinion of the court was delivered by

McFarland, J.:

This action raises some first impression questions concerning the liability of a third-party tortfeasor’s insurance carrier to the party holding a security interest in the vehicle damaged after the insurance carrier has settled with the owner-operator of the vehicle. The district court held in favor of the secured party and the insurance carrier appeals from this judgment.

The facts may be summarized as follows. On July 30, 1986, an automobile owned and driven by Marie Parrish collided with an automobile owned and driven by Florence L.…