Thursday, September 6, 2018

Berks County Court Addresses UIM Credits for Non-Auto Liability Policies


In the case of Adams v. GEICO, No. 15 - 18880 (C.P. Berks Co. Aug. 7, 2017 Fudeman, J.), the Berks County Court of Common Pleas addressed issues pertaining to offsets and credits due in a UIM matter.

By way of background, the Plaintiff was working as part of a construction crew on a road project when a motorist ran over his foot.

The Plaintiff sued the driver and Traffic Control Services/Flagger Force on his third party claims, and GEICO on his UIM claim.

The Plaintiff settled his claim against the tortfeasor driver for her $100,000 liability limits.  He settled his claim against Traffic Control Services/Flagger Force for $75,000 of that company's $2 million dollar limits.

The UIM carrier asserted that any payout of UIM limits should be offset by the amount of $2.1 million dollars, the combined amount of liability coverage possessed by both tortfeasors.  The carrier asserted that, assuming that the Plaintiff's damages were below that credit, the carrier should be entitled to summary judgment.

The Plaintiff asserted that the carrier was not entitled to any set-off relative to the payment made by the flagging company's liability carrier.

The court initially rejected the Plaintiff's contention that, under the MVFRL, only motor vehicle liability policies should be considered in calculating to credits due to a UIM carrier.  In that regard, the court pointed to the case of D'Adamo v. Erie Ins., 4 A.3d 1090, 1098 (Pa. Super. 2010), in which that court held that an umbrella policy could be factored into the credit due even though it was not an auto liability policy.

The court also rejected the Plaintiff's contention that set-offs in the UIM context are void as against public policy.

Under these rulings the court held that the UIM carrier was entitled to a credit of the $100,000 paid by the driver and the $75,000 paid by the flagger company's carrier so as to prevent any double recovery by the Plaintiff for the same damages.

Under the particular UIM policy language at issue in this case, the court went on to reject the carrier's assertion that it was entitled to a credit of the flagging company's $2 million dollars in liability limits.  The applicable clause in the GEICO UIM policy at issue in this case provided that the UIM payments paid under the policy would be "reduced by all amounts...paid by or for all persons or organizations liable for the injury."

The court noted that the policy did not contain the typical exhaustion clause which typically enables a UIM carrier to claim a credit for the liability limits of all tortfeasors involved.

As such, the court ruled in this case that the UIM carrier was only entitled to a credit or offset in the amount of the sum of the payments by the tortfeasors, not the amount of their liability limits contained in their respective policies.

In the end, the carrier's motion for summary judgment was denied under the above analysis and given that the Plaintiff's entitlement to UIM benefits had not yet been determined.

Anyone wishing to review a copy of this case may click this LINK.

I send thanks to Attorney Joseph Hudock of the Pittsburgh law firm of Summers, McDonnell, Hudock, Guthrie & Rauch, P.C. for bringing this case to my attention.

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