Supplementary underinsured motorist coverage in New York isn’t mandated by law. However, many more New Yorkers are recognizing the benefits of this additional auto insurance coverage, particularly in light of an increase in fatal hit-and-runs in major U.S. cities.
Our Queens car accident attorneys remind you, however, simply having UIM coverage doesn’t mean the insurance company will stand by your side. Almost undoubtedly, you will have to fight to receive the compensation you are owed, and insurance companies will always seek ways to limit liability.
The recent case of AAA Mid-Atlantic Ins. Co. v. Ryan is a good example. Here, the Pennsylvania Supreme Court sided with the insurance firm in holding that its liability was offset by damages paid by all tortfeasors, not just the insurer of the underinsured driver.
Although this is an out-of-state case, it’s possible that New York Courts could look to it for guidance in future decisions involving similar scenarios.
Here’s what happened:
Back in the fall of 2003, the plaintiff was driving through an intersection in Philadelphia when she was struck by another vehicle. The crash resulted in bodily injury to the plaintiff.
Subsequently, the injured woman and her husband filed two lawsuits: One against the at-fault driver and another against the city and the state’s department of transportation, alleging a defective highway design.
All parties agreed to transfer both cases to a binding arbitration, rather than have them heard in court before a judge. Prior to even reaching that phase, however, the at-fault driver’s insurance settled with the injured party, offering to pay the full $25,000 limit on her motor vehicle liability insurance policy.
That meant the city was the sole remaining defendant at arbitration. The arbitrator found that the at-fault driver held 50 percent of the liability, the injured driver held 35 percent of comparative liability and the city was responsible for 15 percent of the liability.
The wife was awarded $500,000 in damages, but that amount was automatically reduced by 35 percent (per her own comparative liability) and then another $25,000, based on what the at-fault driver’s insurance had already paid.
This meant that the city was responsible for paying the remaining $300,000, which it did.
While this action was still pending, the injured party filed an underinsured motorist claim with her own insurance company. Although this policy allowed for the collection of compensatory damages resulting fro bodily injuries sustained in a crash with an underinsured motorist, the contract also contained a limit of liability clause. Under this portion of the contract, the insurance company stated that its liability would be limited by all sums paid by or on behalf of persons or organizations who could be held legally responsible. It further indicated there would be no duplicate payments.
Citing the payment made to the injured party by the city, the insurance company disputed the claim. The case went to arbitration. The arbitrator decided that the language of the limit of liability policy was contrary to state law and therefore void.
The insurance company appealed, and the trial court sided with the insurer, finding the arbitrator had incorrectly applied the law. The court indicated that the arbitrator had looked at a part of the law that discusses a plaintiff’s procedural right to pursue UIM benefits, but not a plaintiff’s substantive right to be paid these benefits.
The superior court reversed this finding, ruling in a split decision that the contractual language was contrary to public policy and violated statutory language.
The supreme court, however, reversed this finding, reasoning that the original arbitrator in the case had determined how much the injured party was entitled to receive and that amount had been fully paid. Any additional award, the court ruled, would be considered a de facto relitigation of the issue, and therefore a violation of the principals of collateral estoppel and res judicata. (In other words, the same issue can’t be weighed twice.)
In the end, the claim for UIM benefits was rejected.
This case underscores the importance of hiring an experienced attorney on the wake of an injury accident.
The Law Offices of Nicholas Rose, PLLC offers free consultations. Call 1-877-313-7673.
AAA Mid-Atlantic Ins. Co. v. Ryan, Jan. 21, 2014, Pennsylvania Supreme Court
More Blog Entries:
Hit-And-Run Car Accidents on the Rise in New York, Nov. 18, 2014, Queens Car Accident Lawyer Blog