By Kevin L. Connors, Esquire
Recently, a Decision rendered by the Honorable Nitza Quinones Alejandro of the United States District Court for the Eastern District of Pennsylvania found that a non-binding ADR Arbitration Award in favor of a Plaintiff in a Third-Party personal injury motor vehicle liability case precluded the same Plaintiff from then pursuing underinsured motorist benefits against her personal automobile insurance carrier.
The Opinion was issued in Gallagher v. Ohio Casualty Insurance Company.
It was issued on April 9, 2014.
Let’s follow the bouncing ball.
In Gallagher, the Plaintiff’s personal injury lawsuit against the allegedly responsible tortfeasor settled after a non-binding Arbitration, with the Arbitrator having entered a “settlement value” of approximately $59,000.00 in favor of the Plaintiff, although that “suggestion” was less than the Third-Party Defendant’s personal injury liability limits.
Initially declining to settle for the Arbitrator’s recommendation, instead deciding to pursue the Third-Party case against the tortfeasor, the Plaintiff eventually elected to settle her personal injury claim, after additional discovery was conducted, for the $59,000.00 that had been recommended by the Arbitrator.
Although the Plaintiff settled her claim for less than the tortfeasor’s personal injury liability limits, the fearless Plaintiff then sought to pursue an underinsured motorist claim against her personal automobile insurance carrier, Ohio Casualty.
Ohio Casualty denied the UIM claim, with the denial predicated on Ohio Casualty arguing that there could not be an “underinsured” claim, given the Arbitration value placed on the claim, a value accepted by the Plaintiff under a settlement with the tortfeasor.
Undaunted by the UIM claim denial, the Plaintiff, as Plaintiffs do, filed suit, with Ohio Casualty defending the UIM claim on grounds that the UIM claim could not proceed because the Third-Party was not an “underinsured” motorist under the terms and provisions of the Pennsylvania Motor Vehicle Financial Responsibility Law.
Ohio Casualty argued that the Third-Party coverage limits were not exhausted, that the alleged tortfeasor in question was not underinsured, and that the UIM claim was barred by collateral estoppal, by virtue of the value of the Plaintiff’s claim being established by the non-binding Arbitration, and the Plaintiff’s acceptance of that arbitrated value under a settlement.
With diversity jurisdiction, the Plaintiff’s UIM claim was litigated in the Federal District Court, with the District Court, in Judge Alejandro’s ruling, agreeing with Ohio Casualty, that the tortfeasor was not “underinsured”, as defined under the PMVFRL, further finding that the Plaintiff failed to present any evidence that the Plaintiff’s damages would meet or exceed the Third-Party liability limits of the tortfeasor, the limits being $100,000.00.
On the issue of collateral estoppal, the Federal District Court found that a non-binding Arbitration Award was, just that, non-binding, irrespective of whether the Plaintiff eventually agreed with the non-binding Arbitration Award value, in the course of settling her claim against the tortfeasor, as the Arbitration Award was not, final, in the absence of it being binding.
It all makes perfect sense to us!
ConnorsLaw LLP
Trust us, we just get it!
It is trust well spent!
Defending liability-based lawsuits throughout Pennsylvania, on behalf of insurance carriers, third-party administrators, and self-insured businesses and corporations, our 100+ years of cumulative experience defending our clients against negligence and occurrence-based liabilities, empowers our Casualty Practice Trial Group attorneys to be entrusted to create the factual and legal leverage to expeditiously resolve lawsuits and claims, in the course of limiting/reducing/extinguishing our clients’ potential liabilities under Pennsylvania’s common law, trial practices, and rules of civil procedure.
With every member of our trial practice group being AV-rated, our partnership with the Pennsylvania Defense Institute and the Counsel on Litigation Management magnifies the lens through which our professional expertise imperiously demands that we remain dynamic and exacting advocates for our clients, the same being businesses, corporations, insurance carriers, seeking our trial and litigation acumen, to navigate the frustrating and liability-intensive minefield pervasive throughout Pennsylvania trial practice and procedure.
Questions concerning tort and/or contract liability that might arise in the context of casualty claims can be directed to Kevin L. Connors at [email protected] (Phone: 610-524-2100 Ext. 112).
