The issue in this case was whether Liberty Mutual Insurance Co. was liable to pay the default judgment of $4.6 million against its insured whose policy limits for this incident was just $25,000. The question then became whether the insurer’s conduct proximately cause the $4.6 million judgment against the insured.
Kimberly Perkins was insured by Liberty Mutual Fire Insurance Co. for auto liability up to $25,000. While her car was being driven by Miquasha Smith, a 16-year-old with a driver’s license permit, it crashed into two parked cars. Smith was convicted of reckless driving.
At the time of the crash, Monteil Hyland was a passenger in the Smith car and was seriously injured. Monteil’s mother, Shannon Hyland, filed suit against Smith. Smith had no auto insurance, but was covered by the car owner’s insurance, Liberty Mutual. In order to be covered, Smith had to have permission from Perkins. Smith claimed that she received the car keys from Perkins’s daughter, Michiah Risby. She said she gave the keys to a person named “Rob” and not to Smith.