Can a party to an automobile accident matter claim uninsured motorist coverage when he or she can’t identify the driver who injured him or her?
That will be decided by an arbitrator, a Lackawanna County judge has ruled, finding that the question of fault and the definition of uninsured motorist vehicle were “inextricably interwoven” in Roberts v. Travelers Insurance.
Court of Common Pleas Judge Terrence R. Nealon decided two injured parties who were in the same car during a multi-car accident may arbitrate their claim even though they cannot identify which of the eight other vehicles in a 2008 crash was the one to strike theirs.
Their insurer, Travelers Insurance Co., contended there was no evidence the pair were involved in an accident with an uninsured motorist and, therefore, nothing would trigger the arbitration clause in the plaintiff driver’s policy.
Travelers argued an arbitrator, per the language of the policy, is empowered to decide fault and recoverable damages, but not the applicability of UM coverage or the policy interpretation. The insurer contended only a trial court may consider the UM claim because it involved policy interpretation.
The plaintiffs, Douglas Roberts and Michelle Johnson-Favor, hinged their argument on the UM coverage language, which provides for arbitration of a matter “‘whether the owner or operator of the ‘uninsured motor vehicle’ … is legally liable to that ‘insured’ for bodily injuries sustained and caused by an accident,’” according to Nealon.
The paragraph of Travelers’ policy on uninsured motorist coverage defines an uninsured motorist vehicle as one “‘which is a hit and run vehicle whose operator or owner cannot be identified and which hits or which causes an accident resulting in bodily injury without hitting’” the insured or the insured’s “‘covered auto,’” according to Nealon.
Nealon said this was a “slightly different” definition for an uninsured motor vehicle, citing in a footnote the Motor Vehicle Financial Responsbility Law definition.
The MVFRL version, paraphrased, defines an uninsured vehicle as including an unidentified vehicle that causes an accident resulting in injury, provided the accident is reported to police and the claimant notifies his or her insurer that he or she has a legal action stemming from the accident.
Nealon noted there was no debate over whether Roberts and Johnson-Favor were “insureds” under the policy and no issues concerning the stacking of UM coverages, the sufficiency of Roberts’ coverage, the residency of any insured or the statute of limitations.
“Roberts’ and Johnson-Favor’s recovery of UM benefits from [Travelers] is contingent upon their ability to prove that the operator of an ‘uninsured motorist vehicle’ … is ‘legally liable’ to them for compensatory damages,” Nealon said. “While that issue is affected by the definition of an ‘uninsured motorist vehicle’ in the [MVFRL] and [Travelers'] policy, it will be primarily determined by evidence relating to the factual cause of the subject accident and the resulting injuries to Roberts and Johnson-Favor.”
“Simply stated, the question of fault and the definition of an ‘uninsured motorist vehicle’ are inextricably interwoven in this case,” he added.
Nealon cited a 1990 Pennsylvania Supreme Court case — Brennan v. General Accident Fire and Life Assurance — in support of his decision.
In that case, the underlying insurance policy provided for arbitration if the insured and insurer disagreed about whether the insured was entitled to recover damages from the driver of an uninsured vehicle or they disagreed about the amount of damages.
The trial court, according to Nealon, decided that arbitrators had authority over whether the insurer was entitled to a set-off for money the insured got from the tortfeasor’s insurer. The Superior Court reversed, deciding the set-off was out of the scope of the arbitration provision.
Reversing the Superior Court, the Supreme Court reasoned the matter was fit for arbitration given the “broad scope of authority given the arbitrators,” according to Nealon.
Nealon said a number of decisions to follow Brennan have enabled arbitrators to decide coverage questions and to construe policy definitions, but noted the terms of the arbitration provision may limit the scope of the arbitrator’s authority.
A 2006 case out of the U.S. District Court for the Middle District of Pennsylvania was instructive, he said. In that case — Nationwide Mutual Insurance v. Wisniewski — the policy called for arbitration if the insured and insurer disagreed about the right to recover or the amount of damages, but excluded coverage issues from the scope of the clause.
The facts were different, but the issue was the same, Nealon said.
In that case, the plaintiffs submitted their tort claims to binding high/low arbitration, but the ceiling was less than the third-party tortfeasor’s liability coverage limits. The underinsured motorist carrier for the Wisniewskis denied their UIM claims on the grounds that the arbitration award did not constitute a settlement offer and followed with a federal declaratory judgment action asking the court to rule the insurer did not owe UIM coverage to the Wisniewskis.
The insurer also asked the court to stay the arbitration proceedings because the dispute involved a “question of coverage” that was outside the scope of the agreement because, as the federal court put it, “the applicability of the coverage depends on the definition of underinsured motorist vehicle, which in turn depends on whether [the tortfeasor's] liability coverage was sufficient to pay the damages the Wisniewskis are entitled to recover.”
The judge dismissed the declaratory judgment complaint and denied Nationwide’s request to stay the UIM arbitration, finding that the question of whether the tortfeasor’s vehicle was, in fact, underinsured dealt with the Wisniewskis’ “right to recover damages” from the tortfeasor.
“Notwithstanding the fact that resolution of that issue was dependent upon the policy’s definition of an underinsured motorist vehicle, the Wisniewski court reasoned that ‘the Wisniewskis’ right to recover damages from [the underinsured motorist] and the amount of the damages is a question for the arbitrators even though it affects a coverage issue,’” Nealon said, quoting U.S. District Judge James M. Munley.
He called the case “compelling and instructive” in determining the Roberts matter.
James A. Kilpatrick of Munley, Munley & Cartwright represented the plaintiffs and did not return a call requesting comment.
Brooks R. Foland of Thomas, Thomas & Hafer represented Travelers and did not return a call by the Law Weekly.
Daniel Cummins, who writes a litigation column for the Law Weekly, said the decision follows a pattern of courts generally favoring arbitration with judicial economy in mind. The insurers, Cummins said, likely aimed to keep the issue in court, in the hopes of presenting it to a jury.
He added courts have viewed “phantom vehicles” as uninsured motorists under policy language, as opposed to underinsured, where the driver is typically identified as such.
“The issue would ultimately come down to whether the plaintiffs’ injuries were a result of the accident in question, as opposed to trying to figure out which vehicle hit the plaintiffs’,” Cummins said.
(Copies of the 18-page opinion in Roberts v. Travelers Insurance Company, PICS No. 12-1742, are available from Pennsylvania Law Weekly. Please call the Pennsylvania Instant Case Service at 800-276-PICS to order or for information.) •