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Mosley v. Welch

August 28, 2003

ELLEC MOSLEY, APPELLANT,
v.
RONALD WELCH, APPELLEE.



Appeal from the Superior Court of the District of Columbia, (CA 4644-97) (Hon. Gregory E. Mize, Trial Judge)

Before Steadman, Ruiz, and Glickman, Associate Judges.

The opinion of the court was delivered by: Glickman, Associate Judge:

Argued May 24, 2001

The question presented in this appeal is whether a defendant tortfeasor whose liability insurer is insolvent has the right to require the plaintiff to exhaust his potentially applicable uninsured motorist insurance before the plaintiff enforces his judgment against the defendant, where the District of Columbia Insurance Guaranty Association has elected to honor the insolvent insurer's coverage obligations to the defendant without requiring such exhaustion. We hold that the defendant does not have that right.

I.

While driving his taxi cab on June 23, 1994, Ellec Mosley struck Ronald Welch, a pedestrian, injuring Welch's right leg. Three years later, Welch brought a personal injury action in Superior Court against Mosley and his employer, Capital Cab Cooperative Association, Inc. At the time, Mosley had available up to $25,000 in motor vehicle insurance coverage from Capital Casualty Insurance Company, Inc. ("CCIC"), a wholly-owned subsidiary of Capital Cab.

Capital Cab successfully moved for summary judgment and was dismissed from the action in mid-1998. Not long thereafter, in a separate proceeding, the court declared CCIC insolvent and ordered that it be liquidated. As a result, Welch's action against Mosley was stayed for six months to permit the District of Columbia Insurance Guaranty Association ("DCIGA") to assume CCIC's defense and other obligations in accordance with the Property and Liability Insurance Guaranty Association Act of 1993 ("the IGA Act"), now codified as D.C. Code §§ 31-5501 to 31-5515 (2001). *fn1

After the stay was lifted, the case proceeded to trial in April 2000 with Mosley as the sole defendant. The jury found Mosley liable and awarded Welch $75,000 in damages. Mosley then filed a post-trial motion for partial relief from the judgment. Mosley argued that because the DCIGA had replaced CCIC as his insurer, the IGA Act applied to Welch's claim and required Welch to exhaust whatever rights he had to uninsured motorist ("UM") coverage under his own motor vehicle insurance policy as a precondition to enforcing his judgment against Mosley. *fn2 Mosley asked the court to stay Welch's collection efforts against him "on any sum the equivalent amount of which is found to be available in an alternative source of insurance, presumably, the uninsured motorists provision of plaintiff's automobile insurance policy." Welch opposed Mosley's motion on various grounds. Welch acknowledged that he had his own motor vehicle insurance policy in 1994, when Mosley injured him. Among other things, however, Welch argued that by 1998, when CCIC became insolvent, it would have been too late for him to make a claim under his 1994 policy. Welch further claimed that he no longer could identify the insurance carrier that had issued that policy. Most important, Welch argued that the Act did not afford Mosley any rights against him and did not oblige Welch to exhaust his own insurance coverage before he could enforce his judgment by levying on Mosley's assets.

No stay was in effect while Mosley's post-trial motion was pending. During that time, Welch obtained writs of fieri facias on Mosley's real and personal property and writs of attachment against his wages and savings; and the court entered judgment of condemnation for Welch against $27,488.08 in Mosley's bank account. In August 2000, the trial court denied Mosley's post-trial motion on the ground that it was "not supported by the evidentiary record of the case." Thereafter, counsel have informed us, Welch collected the balance of his judgment from Mosley's assets while DCIGA honored CCIC's coverage obligation to Mosley and paid him $25,000.

II.

Mosley appeals only the denial of his post-trial motion. He renews his contention that the IGA Act required Welch to exhaust his own UM insurance coverage before he could levy on Mosley's assets. We reject this contention and affirm the trial court's ruling.

The IGA Act provides a mechanism for the DCIGA to pay claims against insurers that become insolvent. See generally Zhou v. Jennifer Mall Rest., Inc., 699 A.2d 348, 351-54 (D.C. 1997); District of Columbia Ins. Guar. Ass'n v. Nat'l R.R. Passenger Corp., 721 F. Supp. 1378, 1380 (D.D.C. 1989), aff'd, 288 U.S. App. D.C. 257, 925 F.2d 488 (1991). If an insurer becomes insolvent, "the DCIGA steps in to act as if it were the insolvent insurer." Id. The DCIGA assumes "all rights, duties and obligations of the insolvent insurer," including the obligation to pay "covered claims." D.C. Code § 31-5505 (a)(2) (2001). A "covered claim" includes "an unpaid claim . . . submitted by a claimant, which arises out of and is within the coverage and is subject to the applicable limits of an insurance policy" issued by the insolvent insurer. D.C. Code § 31-5501 (6) (2001). Thus, in the present case, the DCIGA assumed CCIC's obligation to insure Mosley up to the policy limit of $25,000.

The IGA Act also contains a provision that is designed to avoid duplicate insurance recoveries and protect the funds of the DCIGA by requiring claimants to exhaust other sources of insurance for covered claims. In pertinent part, the provision states:

Any person having a claim against an insurer under any provision in an insurance policy, other than a policy of an insolvent insurer which is also a covered claim, shall be required to exhaust first his or her right under such a policy. Any amount payable on a covered claim under this chapter ...


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