The Supreme Court of Alabama has overturned a lower court’s ruling that an injured motorist’s UM insurer was liable for damages awarded in a default judgment entered against the uninsured motorist. Travelers Home and Marine Ins. Co. v. Gray, 2014 WL 7234897 (Ala. Dec. 19, 2014).

An injured motorist sued an uninsured motorist and her UM insurer. The uninsured motorist failed to answer the complaint and a default judgment for damages was entered. After the entry of the default judgment, the plaintiff moved for summary judgment against the UM insurer (which had answered the complaint and was participating in the suit), asserting that the insurer was bound by the default judgment against the uninsured motorist. The trial court granted summary judgment, finding that the UM insurer failed to contest the default judgment or the damages sought by the plaintiff, and was thus bound by the default judgment. The insurer appealed.

The Alabama Supreme Court held that the trial court erred in granting summary judgment against the insurer based solely on the default judgment taken against its insured. It held that a UM insurer actively defending a lawsuit against it is not bound by a default judgment taken against the uninsured motorist alone. It noted that the UM insurer has no relationship with the uninsured motorist and has no ability to contest a default judgment taken when the uninsured motorist does not answer the complaint. The judgment was reversed and the case remanded.