Wednesday, October 1, 2014

Collateral Estoppel of a UIM Claim Upheld in a Slightly Different Context


In the recent past, several cases have been summarized here in which a variety of courts have held that where a third party arbitration in an auto accident case results in an award that is less than the tortfeasor's liability limits, the plaintiff is collaterally estopped from proceeding onto a UIM claim.  

The rationale is that, as there had already been a determination as to the value of the claim and that value did not exceed the liability limits, then the tortfeasor was not "undersinsured" and no UIM recovery could be had by the Plaintiff.

To view those prior Tort Talk Posts, click HERE.

This collateral estoppel issue has reared its head again, but in the slightly different context of a case involving multiple levels of UIM coverage. In its recent "non-precedential" Memorandum Opinion in the case of USAA v. Hudson, No. 224 EDA 2014 (Pa. Super. Sept. 24, 2014 Lazarus, J., Ott, J., Strassburger, J.) (Memorandum by Ott, J.), the Pennsylvania Superior Court addressed a matter involving a claim for second level Underinsured Motorist (UIM) benefits after an arbitration award was entered for UIM benefits under a primary policy. 

In this matter, the Plaintiff secured the tortfeasor's $15,000 in liability limits by settlement and then proceeded onto her UIM claims.

The primary UIM coverage on the vehicle in which the Plaintiff was located as a passenger at the time of the accident was with Allstate.  An arbitration award of $75,000 was eventually entered on that claim. 

After a credit for the third party coverage of $15,000, the insured received $60,000 of the Allstate $100,000 UIM policy limits.

The Plaintiff then sought second level UIM coverage under her personal UIM policy with USAA.  That second level UIM carrier denied the claim by arguing that the issue of damages had already been fully litigated with the result being a number that was below the first level UIM carrier's policy limits. 

The trial court found in favor of the insurance company and Hudson appealed. The Superior Court affirmed and held that the insured is estopped from re-litigating the claim and that the “issue” of damages had already been litigated. 

Since the award of the UIM was less than the amount of the UIM coverage on the primary policy, the Plaintiff could not recover under the second level USAA UIM policy.

I send thanks to Attorney Scott Cooper of the Harrisburg, PA law firm of Schmidt Kramer for bringing this decision to my attention. A

nyone wishing to review this Memorandum Opinion by the Superior Court in the USAA v. Hudson matter may click this LINK.

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