Farmers Insurance Exchange v. Smith

Opinion

SILLS, P. J.

The central question in this case is whether an insurer can, in effect, press-gang a policyholder’s personal injury attorney into service as a collection agent when the policyholder receives medical payments from the insurer and then later recovers from a third party tortfeasor. As one might guess from the verb “press-gang,” the answer is no. The theory put forward by the insurer here amounts to a genteel form of involuntary service as a money collector. A few basics need to be kept in mind: An insurer does not detrimentally rely on anything when it makes first party…