SW Legal studies in Business

Advance Payments Credited Toward Judgment Only If in Same Damage Category
Description Arkansas high court held that an insurance company could be credited for payments made to an accident victim prior to litigation. Advance payments are offset against the jury award by category. Overpayment by the insurer in some categories will not be offset against higher amounts awarded for other damage categories.
Topic Insurance
Key Words Advance Payments; Credit
C A S E   S U M M A R Y
Facts Douglas was injured while driving his tractor along the side of a highway when he was struck from behind by a truck owned by Adams Trucking. Douglas suffered multiple injuries and was unable to work for some time. Adams' insurer, Columbia, made advance payments to Douglas of $18,000 for medical expenses, $19,000 for property damage, $63,000 for loss of income, $8,900 for the expense of hired help, and $1,100 out-of-pocket expenses. Columbia's attempt to settle the matter out-of-court failed as Douglas sued Adams. The jury awarded $19,000 for medical expenses, $19,000 for property damage, $40,000 for loss of income, and $100,000 for pain and suffering. The issue on appeal is how to resolve the difference between the advance payments and the amount awarded by the jury.
Decision Advance payments are encouraged by the courts as part of amicable settlements. In general, there should not be double recovery. The payments from Columbia were voluntary; they were made before there was a judicial determination of the amount owed. Hence, Columbia gave Douglas more for lost wages than the jury determined were owed. The extra $23,000 will not be offset against the $100,000 for pain and suffering; that is a separate category of damages that Adams (and its insurer) must pay in full.
Citation Douglas v. Adams Trucking Company, Inc., - S.W.3d - (2001 WL 624763, Sup. Ct., Ark., 2001)

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