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The case of Pogge v American Family Insurance decided by the Nebraska Supreme Court has a very interesting fact scenerio. Three vehicle accident, injured plaintiff settled with first vehicle for total amount of liability coverage, plaintiff settles with second vehicle for less than the liability coverage, with a release stating that the settlement is in compromise of a claim without any admission of liability. Plaintiff brings action against own insurer, American Family Insurance, under the underinsurance provision and is denied coverage for failing the exhaust all of the primary coverage. On motions for summary judgment, trial court allows defendant’s motion, Supreme Court reverses and remands for damage trial.

The plaintiff in its motion for summary judgment submitted evidence that the second driver was not negligent in the accident and therefore was not liable to the plaintiff. The defendant, American Family, made the argument that the settlement is an admission of liability on the part of the second vehicle, but did not provide any evidence of the negligence of the second vehicle’s driver. The Supreme Court states that the settlement is not an admission of liability and to rule as the trial ruled is an error of law. Without an admission of liability and without evidence of the second vehicle’s driver’s negligence, the Supreme Court ruled that the plaintiff’s motion for summary judgment should be allowed, that there is no evidence that the liability insurance available to the plaintiff has not been exhausted, and the case is remanded to determine damages.

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