Wednesday, September 7, 2022

Delay Damages To Be Calculated on UIM Award After Award Is Molded Down To Policy Limits


In the case of Fertig v. Horace Mann Ins. Co., No. 16-CV-4801 (C.P. Lacka. Co. Aug. 19, 2022 Nealon, J.), the court addressed issues regarding the molding of a jury verdict to the amount of the UIM carrier’s policy limits and how to handle a claim for delay damages based upon the verdict in this context.

According to the Opinion, there were two (2) separate jury trials in this matter given issues that were raised following the first trial.

After the juries in the separate UIM benefits trial awarded the Plaintiff $75,000.00 in economic damages and $175,000.00 in non-economic damages, for an aggregate gross award of $250,000.00, the combined verdicts were reduced to a net UIM award of $150,000.00 after the application of a credit for the tortfeasor’s liability insurance coverage limits of $100,000.00.

Thereafter, the UIM Defendant filed a Post-Trial Motion pursuant to Pa. R.C.P. 227.1(a)(4) seeking to mold the $150,000.00 net award further downward to the amount of the UIM coverage available of $100,000.00.

At the same time, the Plaintiff filed her own Post-Trial Motion requesting an award of delay damages under Pa. R.C.P. 238 based upon the higher net award of $150,000.00.
Judge Terrence R. Nealon
Lackawanna County


Judge Terrence R. Nealon of the Lackawanna County Court of Common Pleas reviewed Pennsylvania precedent and confirm that, absent bad faith liability on the part of the UIM carrier, the law of Pennsylvania limits the maximum legally recoverable damages in a UIM trial to the UIM policy limits set forth in the insurance contract and requires that an award that is in excess of those policy limits be molded down to the amount of the UIM policy limits. 

 As such, the court agreed to grant the JUIM carrier’s Motion to Modify the Net UIM Verdict of $150,000.00 down to the UIM policy limit of $100,000.00.

Relative to the claim for delay damages presented by the Plaintiff, the carrier initially asserted that delay damages are not recoverable in connection with a UIM benefits claim.

Judge Nealon disagreed and noted that, although arbitrators in a UIM Arbitration proceeding do not have the authority to award delay damages under Rule 238 unless the insurance contract grants the arbitrators that authority, the parties in this case chose to litigate the UIM claim in a civil action in the Court of Common Pleas, thereby rendering Pa. R.C.P. 238 applicable to the matter.

Judge Nealon further held that, since the UIM carrier did not make a written settlement offer and did not establish that the Plaintiff caused any delay of the trial, the Plaintiff’s Motion for Delay Damages was granted. 

However, the court noted that the delay damages would be calculated upon her legally recoverable damages of the $100,000.00 UIM policy limits, rather than the net award of $150,000.00.

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

Source of image:  Photo by Olia Danilevich on www.pexels.com.

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