An automobile club accident can be very litigious. In fact, any automobile accident where there is even the suggestion of negligence on the part of the insured automatically merges into a lawsuit. Motorists frequently unwittingly invite lawsuits into their lives when they drive recklessly or carelessly. The auto club may have very valid reasons for pursuing a lawsuit, but drivers should also realize that being sued by an automobile club often presents a mountain of problems.

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On October 18, 1988, Larry Stephenson, an elderly retired auto club member, was injured in a crash. His automobile club insured him under a special automobile liability policy, and, according to the terms of that policy, Auto Club pursued its claim against Larry because of negligence on the part of Larry. After a two-day trial in county court, the jury found Larry liable for one count of deliberate, negligent injury, which meant that he owed a financial responsibility to his fellow members of the automobile club, for whom he insured.

This case was not a simple accident. It was settled at a summary judgment. At the summary judgment, the Circuit Court awarded judgment in Auto Club’s favor. We affirmed the judgment. Because we concluded that Larry was not a nuisance to others and that the testimony of three physicians was not consistent with a finding of liability, we vacated the judgment.

We next addressed the issue of damages. Larry presented two expert witnesses. One testified that he suffered a mild sprain. The other expert, a former liability carrier, indicated that Larry’s injuries would impair his ability to earn a living. We granted summary judgment in favor of Auto Club and entered an agreement with Larry to indemnify the club and accept a liability coverage adjustment.

When we reviewed Larry’s liability coverage, we discovered that he had only collision and bodily injury coverage. His personal policy provided bodily injury coverage, but it did not include property damage or liability coverage. He also had no medical coverage. Larry had never purchased an additional policy after he sued Marla in January of 1994. He did not carry a co-insured motorist policy.

On March 4, after we had reviewed the evidence and discussed the settlement offer with Larry, he arranged to have a final examination by the Circuit Court. During this examination, he disclosed that he was receiving hounding calls from an auto club broker. We suggested that he give his answer in private, without disclosing the nature of the call to the broker. When we next spoke with him, he said that he had made another bad faith refusal to cooperate with the settlement because the car club foreman was attempting to get him to change his mind. Finally, the circuit court allowed him to settle for less than what was owed to him.

Mr. Larry’s story is indicative of the potential dangers to an automobile lawsuit debtor. Often the default judgment debtor will have little money or collateral to offer at the judgment auction. In such cases, it may be necessary to settle for a fraction of the original judgment to avoid the possibility of having the default judgment declared a nullity by the Missouri Supreme Court. (The Missouri Supreme Court has authority to review a lower court’s decision and determine if it is legally binding.)

In sum, automobile club members must be aware of their liability coverage limits. They must seek professional legal advice in cases where they are concerned that the statute of limitations has expired for their state. They must not settle with an insurer that does not provide adequate coverage and they must be aware of the laws governing Missourians’ right to make claims against their automobile club. Failure to follow these laws could result in financial disaster for the injured party.

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