Is It An Arbitration Award or Not?

In the case of Martinez v. Nationwide Ins. Co., No. 18-2972 (E.D. Pa. Feb. 18, 2020 Perkin, U.S.M.J.), the court denied a carrier’s Motion for Summary Judgment in a UIM claim where there were issues of fact over whether the ADR proceedings resulted in a settlement recommendation or a binding arbitration award for less than the tortfeasor’s limits.

According to the Opinion, the Plaintiff proceeded in the third party auto accident matter to an alternative dispute resolution proceeding which resulted in an arbitrator entering a finding in favor of the Plaintiff for $22,500.00 after which the Plaintiff’s lawsuit was subsequently marked as settled, discontinued and ended.

Thereafter, the Plaintiff’s attorney responded to the carrier’s inquiries about the status of the arbitration of the third party matter. After receiving the arbitrator’s award, the Plaintiff’s counsel notified the carrier of the “settlement” via a Dailey-Sands letter with a request that the UIM carrier either approve the “settlement” or tender the amount of the “settlement” to preserve its subrogation rights.

The carrier filed a Motion for Summary Judgment in this matter asserting that the Plaintiff had received a binding arbitration award for less than the third party tortfeasor’s limits such that there was no valid UIM claim.

In this matter, the Federal Magistrate Judge found that there were issues to be resolved that prevented the entry of summary judgment.

The court agreed with the Plaintiff that the ADR proceedings merely resulted in a non-binding settlement recommendation from an arbitrator. The court noted that the arbitrator’s document used terms such as “recommendation” and “recommend” rather than language indicating that the arbitration award document was meant to be a binding arbitration award on the Plaintiff. 

The court additionally noted that, if the document was determined to be a settlement recommendation, then there would be no final judgment that would preclude the Plaintiff from litigating her damages under the doctrine of collateral estoppel.

Anyone wishing to review a copy of this decision may click this LINK.  The Order related to this Opinion can be found HERE.

Source: “Digest of Recent Opinions.” Pennsylvania Law Weekly (March 3, 2020).