The Nevada Supreme Court on Monday reinstated an accident victim's claim against State Farm insurance, saying the company had not told her there was additional coverage available until after she cashed its initial check.
Ernestine Harris filed suit in Washoe County against Scott Nestaval over a car accident between the two. She contacted his insurance company, State Farm, asking specifically for information about what coverage Nestaval had to pay her medical and other bills.
The company mailed her a check for $100,000 and a release of claims form, which she cashed promptly to pay attorney fees and medical bills. She never signed the release.
According to the high court, later that same day State Farm faxed and mailed a letter indicating Nestaval had $1 million in umbrella coverage, but the fax was sent to the wrong number.
She received the letter through the mail and tried to negotiate with the insurance company for the remainder of her damages. The company argued the claim was resolved because she cashed the check.
Washoe District Judge Steve Elliott agreed and dismissed her claim. He agreed with State Farm that the parties reached "an accord and satisfaction" when she cashed the check.
The high court disagreed.
"An accord and satisfaction should not be maintained as a pitfall into which the unwary might fall," they wrote, adding many people lack the knowledge of technical law to protect them from such things.
The order points out that Harris presented evidence she didn't take the check as full satisfaction of her claim and had repeatedly requested information whether Nestaval had additional insurance to cover her medical bills, which were more than $100,000.
Justices said the district judge should have seen there were still issues of fact and rejected summary judgment for the insurance company.
The justices ordered the case back to court, saying the parties could deduct that $100,000 payment from the final settlement in the case.
n Contact reporter Geoff Dornan at email@example.com or 687-8750.