[¶ 14.] The Appeals Court of Massachusetts held that a valid underinsured clause existed under a similar set of circumstances.Lumbermens Mut. Cas. Co. v. Mercurio, 27 Mass. App. Ct. 111, 535 N.E.2d 234, 237 (1989). In Mercurio, the passenger of an automobile which was involved in an accident settled with the insurer of the owner/operator of the automobile, Liberty Mutual Casualty Company (Liberty).
Even where a right to subrogation exists, many courts have recognized that if the insurer is unable to demonstrate prejudice to itself as a result of an unapproved settlement, the insured is not barred from collecting on the insurance policy. See, e.g., Thompson v. American States Ins. Co. (M.D. Ala. 1988), 687 F. Supp. 559; Rafferty v.Progressive American Ins. Co. (Fla.Dist.Ct.App. 1990), 558 So.2d 432; Mulholland v. State Farm Mut. Auto. Ins. Co. (Ill.App. Ct. 1988), 527 N.E.2d 29; Kapadia v. Preferred Risk Mut. Ins. Co. (Iowa 1988), 418 N.W.2d 848; Lumbermens Mut. Cas. Co. v. Mercurio (Mass.App.Ct. 1989), 535 N.E.2d 234; Tegtmeyer v. Snellen (Mo.Ct.App. 1990), 791 S.W.2d 737; Branch v. Travelers Indem. Co. (N.C.Ct.App. 1988), 367 S.E.2d 369, aff'd 378 S.E.2d 748 (1989); Federated Service Ins. Co. v. Granados (Or. 1995), 889 P.2d 1312; Prudential Property Cas. Ins. Co. v. Nayerahamadi (E.D. Pa. 1984), 593 F. Supp. 216; Thiringer v. American Motors Ins. Co. (Wash. 1978), 588 P.2d 191. In his concurrence to Nimmick, Justice Leaphart urged that Montana adopt such a "no prejudice" rule.
" Liberty Mut. Ins. Co. v. Lund, supra at 1007-1008. The fact that Mather had optional bodily injury coverage and the insured in the Lund case did not is a distinction that does not aid Nash. Also, Nash is not helped by the fact that Lumbermens Mut. Casualty Co. v. Mercurio, 27 Mass. App. Ct. 111 (1989), was decided on the assumption that a passenger in a single vehicle accident could recover under the insured tortfeasor's underinsured coverage. The issue was not decided in that case.
More particularly, the MacInnis case did not deal with fixing the actual damages, which is the issue at the heart of this case. The judge found that CU had valuable subrogation rights which it surrendered when it approved the settlement, i.e., CU had changed position. By treating the settlement in this case as fixing the damages, CU, conformably with MacInnis at 222-223, avoids prejudice from its change of position. Cf. Lumbermens Mut. Cas. Co. v. Mercurio, 27 Mass. App. Ct. 111, 115 (1989). For the reasons stated, the trial judge correctly ruled that the agreement for judgment established the Burnses' damages.