Coverage of law student killed in NJ turned on residence – $170,000 Settlement

Cassidy, a woman in her mid-20s, was hit by a car while using a crosswalk in Newark, New Jersey, where she had been in Rutgers law school until a few days before. The driver fled the scene. According to the only other witness, her walk sign was green when she started to cross the six-lane road, but it turned red while she was past the middle, with no median.

Cassidy was transported with a traumatic brain injury and multiple fractures to her torso and pelvis. She died about five hours after arriving at the emergency room despite robust efforts to save her.

The driver’s insurance—GEICO—offered its New Jersey minimum limits: $15,000. Her estate made a claim under her family’s $250,000 underinsured motorist limits, less a $15,000 credit for the liability offer. Her family lived in Leesburg, and Erie delivered its policy to that house, so Virginia UIM law governed. Erie denied coverage, claiming she was not an insured while at Rutgers, as she was not in the same household as her parents—the named insureds. Her administrator sued Erie seeking a declaration Erie provided coverage for the estate’s claims.

The insurance hinged on this specific question: did Cassidy qualify as a resident relative—and thus a first-class insured—for UIM coverage under her family’s auto policy? Several courts have addressed that issue in various factual settings. Many courts apply an eight-factor test, with no one controlling factor. Generally, those factors include the claimant’s intent, the regularity and quality of family contacts, the location of the claimant’s personal property, where they get mail, and whether they kept a room in the family house.

Also, the majority rule is students remain the residents in their family household while away at school. The Supreme Court of Virginia has supported that majority rule in dicta in one published case, although it nevertheless found no residency due to unique facts. Also that opinion actually resulted in more coverage.

The parties exchanged discovery, including some social media posts and texts illustrating her family connections. Erie also deposed her parents. Discovery showed Cassidy kept a room at her parents’ house, came home every break as well as other times, went on family trips, shared a joint bank account with her mother, and participated in family activities when at home in Leesburg (including church). Before she died, she never expressed any intent to live elsewhere other than at home. And she lived at home all her life, aside from while in college or law school. Indeed, she had lived at the Leesburg home while working for two years between the two. And she only stayed in New Jersey between her 1L and 2L years so that she could intern for a judge. Also, Cassidy and her sister were exceptionally close.

Weighing against those facts, Cassidy had a New Jersey drivers’ license and paid in-state tuition at Rutgers.

On the tort damages side, New Jersey law did not allow her parents and sister to recover for their own pecuniary and emotional loss. That state generally limits damages in such cases to pain and suffering plus medical bills. Another consideration: New Jersey applies comparative fault and not contributory negligence to tort claims like this. If the tort defendant’s comparative fault exceeds 60%, the plaintiff receives 100% of the jury’s damage award. If it falls under 50%, the plaintiff gets no recovery.

With $225,000 in exposed UIM limits after the liability carrier payment, Judge Novak guided the parties to settle the case for $170,000. That settlement resolved both the insurance coverage and the underlying tort disputes.

[19-T-068]

Type of action: Civil declaratory relief

Injuries alleged: Uninsured-underinsured motorist coverage for a wrongful death action

Name of case: Cassidy v. Erie Insurance Co.

Court: U.S. District Court – Eastern District of Va.

Case no.: 3:18-cv-123-HEH

Name of mediator: Judge David J. Novak

Date resolved: July 30, 2018

Verdict or settlement: Settlement

Amount: $170,000

Attorney for plaintiff: John Janney Rasmussen, Richmond

Insurance carrier: Erie Insurance Company