When an automobile accident results in injuries, the plaintiff’s medical expenses and lost wages can easily reach tens of thousands – or even hundreds of thousands – of dollars. Even if the at-fault party has liability insurance, there may not be enough coverage to fully compensate the injured party.
This is why uninsured/underinsured motorist insurance is so important. It can help fill the gap between the at-fault party’s liability insurance limits and the plaintiff’s actual damages. Of course, payment under such a policy is not automatic. Like other matters in which insurance companies are involved, the process can be difficult and contentious.
Facts of the Case
In a recent case under consideration by the Massachusetts Appeals Court, the plaintiff was a woman who was injured in an automobile accident in 2007. At the time of the collision, the plaintiff’s automobile was covered under an uninsured/underinsured motorist (UM/UIM) policy issued by the defendant insurance company. The plaintiff notified the defendant of the accident, and the defendant confirmed UIM coverage of $250,000 per person and $500,000 per accident.
Thereafter, the plaintiff filed a lawsuit against the at-fault driver and obtained a judgment that, with statutory interest, totaled $340,557. (Without interest, the award was $231,565.) While an appeal of that judgment was pending, the plaintiff agreed to settle her claim against the at-fault driver for the $100,000 policy limits of that driver’s liability insurance policy.
The plaintiff then made a formal demand that the defendant pay the remaining $240,557 under her UIM policy. The defendant refused to do so, asserting that it was entitled to resolve the issues of liability and damages through arbitration. The plaintiff filed a declaratory judgment action against the defendant, seeking to recover under the UIM policy and asserting an unfair settlement practices claim against the defendant. The trial court declared that the defendant was liable to the plaintiff in the amount of $131,565.
The Appellate Court’s Decision
The Massachusetts Court of Appeals reversed the trial court’s entry of summary judgment in the plaintiff’s favor, holding that the trial court should have granted the defendant’s cross motion for summary judgment on its counterclaim requesting the appointment of an arbitrator. On remand, the appellate court also directed the trial court to engage in further proceedings on the plaintiff’s unfair settlement practices claim.
In so holding, the court observed that all automobile insurance policies issued in Massachusetts must comply with Mass. Gen. Laws ch. 175, § 111D, which states that the resolution of the issues of both liability and damages in a UM/UIM claim must either be made by an agreement between the insurer and the insured or, if they fail to agree, determined by arbitration. The court went on to find that the lower court had abused its discretion in finding that the defendant had waived its right to arbitration.
As to the plaintiff’s argument that the defendant was estopped by the judgment in the underlying tort case from contesting the issues of liability and damages, the court found that the defendant was not precluded from pursuing arbitration. In so holding, the court found that both the statutory framework regarding UM/UIM benefits and the policy between the parties require arbitration if the parties could settle the claim otherwise.
Talk to an Experienced Massachusetts Car Accident Lawyer
At the Law Offices of John C. Manoog, III, our knowledgeable Cape Cod uninsured motorist accident attorneys understand just how contentious UM/UIM claims can be. Even if it seems that the insured and insurer are “on the same side,” at the end of the day, an insurance company is still an insurance company. The bottom line is always the adjuster’s primary concern, and the insured needs a seasoned professional advocating for his or her side of the case in order to pursue maximum compensation. Call us at 888-262-6664 to schedule a free consultation.
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