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Case Bulletin – West Virginia Supreme Court of Appeals Reiterates that Plaintiffs are not Entitled to Double Recovery

On Tuesday, January 26, 2016, the Supreme Court of West Virginia issued a new ruling that “[w]hen an insurer makes an advance payment to a tort-claimant upon condition that the advance payment will be credited against a future judgment or determination of damages, the damages recovered by the claimant on a subsequent judgment shall be reduced by the amount of the advance payment.” Syl. pt. 2, Doe v. Pak, No. 15-0013, slip op. at i (W. Va. Jan. 26, 2016).


On November 23, 2009 Plaintiff Hasil Pak was injured when a hit-and run driver crossed into her lane of travel. Pak had an automobile insurance policy with State Farm, which included $100,000.00 in uninsured motorist (UM) coverage. Prior to trial, State Farm paid $25,000.00 for medical expenses. State Farm also offered Pak $30,628.15 in UM coverage as an advance payment for her damages, noting in a letter that “[t]his payment will also be credited against any final determination of damages.” Id. at 3 (emphasis in opinion).


After trial, a final order was entered on behalf of Pak for a total of $70,700.00. The Circuit Court refused to credit State Farm for its prior $30,628.15 advance, holding instead that “this amount was gratuitously paid . . . [and] could very well be found to constitute a gift.” Id. at 4.


The Supreme Court reversed the order, holding that by not crediting State Farm for the previous $30,628.15, the plaintiff would receive a “double recovery[,]” which “directly contradicts West Virginia public policy.” Id. at 7. The court reasoned that the primary goal of the UM statute is to provide full compensation, without duplicating benefits. Additionally, the court noted that many other jurisdictions have made similar rulings. Finally, the court noted that “[n]ot only does a credit for advance payments protect an insurer from having to pay twice for the same damages, but it also benefits insureds by encouraging expedited payment without resort to trial.” Id. at 8-9.


There were two additional noteworthy rulings by the Supreme Court of West Virginia in this matter. First, the lower court should have deducted the advance payment prior to calculating prejudgment interest. Second, Pak was not entitled to prejudgment interest for loss of household services because she did not pay, or incur an obligation to pay, for any services. In fact, there was no testimony that anyone was required to or did perform household chores that Ms. Pak could not perform; rather, her chores were neglected for the time at issue.  In footnote 8, the court went out of its way – even though State Farm did not raise the issue on appeal – to explain that “a plaintiff’s mere loss of the ability to do housework is a customary activity, and is not subject to economic calculation.” “The loss of customary activities constitutes loss of enjoyment of life, which is not subject to economic calculation.” The implication is that under the circumstances, the trial court should not have admitted expert testimony regarding the value of Pak’s alleged inability to perform housework.