Mulcahy v. Farmers Insurance

Mary Mulcahy was injured in a car accident in British Columbia. She settled her claim with the other driver. The other driver’s insurer did not pay the whole settlement amount. Instead, it reduced its settlement payout by the amount of first party insurance coverage Mulcahy was entitled to receive under British Columbia’s universal compulsory automobile insurance law. It advised Mulcahy that her own insurance company was obligated to pay the difference. Mulcahy’s own insurer disagrees.

Primarily, we must decide whether Washington courts may enforce an agreement between a Washington insurer and…