A private arbitration to assess liability and damages involving a motor vehicle accident was agreed to by counsel for both plaintiff and defendant. After considering the evidence presented, the Arbitrator submitted her “recommendation” and “Arbitration Findings in Support of Recommendation to the parties,” recommending a judgment of $22,500 against the defendants and the case was subsequently marked on the docket “Settled, Discontinued, and End.” The coverage provided to the defendant exceeded the $22,500 figure.
It is critical when defending an uninsured motorist (UIM) claim to determine whether the tortfeasor’s coverage limit has been exhausted. Typically, if the coverage has not been exhausted, the plaintiff was technically not injured by an “uninsured” motorist and the defendant may rely upon this argument. In this instance, a private arbitration took place and ultimately in this case, Marisol Martinez v. Nationwide Insurance Company, the federal court in Philadelphia denied a Motion for Summary Judgment in a UIM case where the case against the tortfeasor had resolved for less than the policy limit after proceeding to private arbitration.
The defendant insurer contended the Award of the Arbitrator, which was less than the tortfeasor’s coverage limit, defeated the UIM claim. The plaintiff argued in response that the Arbitrator provided a settlement “recommendation” which was accepted by the parties and did not prohibit the plaintiff from continuing with an underinsured motorist claim. The defendant’s summary judgment motion was based on the argument that (1) the plaintiff was not injured by an underinsured motor vehicle; and (2) collateral estoppel prevented plaintiff from re-litigating the amount of damages.
The issue for the court in ruling on the summary judgment motion was whether the ADR process resulted in a settlement or whether it was a binding and final judgment. The trial court, in a memorandum opinion, ruled that the “ADR process resulted in a non-binding settlement recommendation, as opposed to a binding judgment.”
The trial court in the UIM case closely examined the language of the Arbitrator’s Award in the case against the tortfeasor. That language made it clear that the Arbitrator was recommending judgment at a specific amount and was not intending to bind the parties. The court concluded that the parties had engaged in a non-binding settlement recommendation and that there existed an issue of fact as to the plaintiff’s damages to be submitted to the jury. The summary judgment motion was denied.
Steve Bruderle may be reached at (215) 931-5852 or firstname.lastname@example.org for any questions about defending UIM cases.