UIM Carrier Only Entitled to Credit of Tortfeasor's Liability Limits and Not Amount of Excess Verdict Paid

The Pennsylvania Superior Court issued a notable but "Non-precedential" decision on May 28, 2019 in the case of IDS Prop. Cas. Ins. Co. v. Piotrowski, No. 2546 EDA 2018 (Pa. Super. Ct. May 28, 2019 Lazarus, J., Colins, J., Kunselman, J.) (Non-Precedential Mem. Op. by Kunselman, J.), involving the amount of the credit due to a UIM carrier.

In this underinsured motorist claim there was a dispute over how much of a credit the underinsured motorist carrier was entitled to on a policy which had $100,000 of liability coverage but where there was a jury verdict of over $1 million against the third party tortfeasor.

Before trial the third party insurance carrier offered $36,001.00 which was rejected.  The third party insurance carrier agreed to pay any amount of a verdict even if it exceeded the liability limits.  

The jury returned a verdict of over $1 million and then the case was settled for $485,000 before the trial court’s decision on the defendant’s post-trial motions.  

A UIM claim was pursued and the insured argued the UIM carrier was entitled to a credit on the third party policy limit of $100,000.  

The UIM carrier argued that it was entitled to a $485,000 credit.  The trial court allowed a credit of $100,000 and the carrier appealed.  

On appeal, the Superior Court held that the carrier was entitled to a credit of only the $100,000 limits set forth in the tortfeasor’s liability policy. The Superior Court adopted the trial court’s rationale that the additional $385,000 “was not made because of Piotrowski’s bodily injury, but rather to avoid a potential bad faith claim, including punitive damages.’” 

As such, the trial court’s decision that the UIM carrier was entitled to a credit in the amount of the tortfeasor’s policy limits was affirmed.

Anyone wishing to review this decision may click this LINK.

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