Summary
In Bauso v. Allstate Insurance Company, 643 N.Y.S.2d 190 (N.Y. App. Div. 1996), the insured claimed underinsured motorist benefits from the insurer after settling his claim against the tortfeasor for his policy limits of $50,000.00.
Summary of this case from Allstate Insurance Co. v. BradtmuellerOpinion
May 28, 1996
Appeal from the Supreme Court, Orange County (Rosato, J.).
Ordered that the order is reversed insofar as appealed from, on the law, with costs, the defendant's motion to dismiss the complaint is granted, and the arbitration award is confirmed in the amount of $10,000.
The plaintiff was involved in a car accident with another vehicle. With the consent of his insurer, Allstate Insurance Company (hereinafter Allstate), the plaintiff settled his claim against the insurer of the other vehicle for $50,000. The plaintiff thereafter sought underinsured motorist coverage from Allstate. When the parties could not agree as to the amount of underinsured motorist compensation, the plaintiff's claim was arbitrated pursuant to the terms of the policy. The arbitration resulted in an award to the plaintiff in the amount of $60,000. The award expressly noted that it was without consideration of any "offsets or other payments". Pursuant to the terms of the Allstate policy, each party has the right to a trial de novo of all issues if, inter alia, the arbitration award exceeded the "Financial Responsibility Limits of New York" (i.e., $10,000) ( see, Insurance Law § 3420 [f]; Vehicle and Traffic Law § 311). The plaintiff commenced this action, inter alia, to enforce this provision of the policy. Allstate moved to dismiss the complaint, asserting, inter alia, that the arbitration award was insufficient to trigger the policy's trial de novo provision. The plaintiff cross-moved, inter alia, to confirm the award.
Pursuant to the relevant policy endorsement, Allstate's obligation to pay uninsured/underinsured motorist benefits is limited to the coverage provided offset by payments from "all liability protection in effect and applicable at the time of the accident". Thus, the amount of the plaintiff's damages and the amount of compensation he has received must be determined before Allstate's liability under the uninsured/underinsured motorist endorsement can be calculated. Here, the arbitration panel determined the plaintiff's damages to be $60,000. The plaintiff contends that this determination is supported by substantial evidence and should be confirmed. However, it is not disputed that the plaintiff has already received compensation in the amount of $50,000 from the alleged tortfeasor. Accordingly, Allstate's obligation under the policy for the plaintiff's underinsured motorist claim is $10,000 ( see, Matter of Allstate Ins. Co. [Stolarz — New Jersey Mfrs. Ins. Co.], 81 N.Y.2d 219; Matter of Zurich Ins. Co. v. Wilburn, 212 A.D.2d 620; 12A Couch, Insurance § 45:620-28 [2d ed]; cf., 11 NYCRR 60-2.1).
Contrary to the plaintiff's contention, Allstate did not waive its right to the $50,000 offset by failing to seek a stay of the arbitration ( see, Matter of Zurich Ins. Co. v. Wilburn, supra; Matter of Brentnall v. Nationwide Mut. Ins. Co., 194 A.D.2d 537; Matter of Valente v. Prudential Prop. Cas. Ins. Co., 157 A.D.2d 732). Further, because the provision at issue is a combination uninsured/underinsured motorist endorsement, the offset is enforceable ( see, Matter of Allstate Ins. Co. [Stolarz — New Jersey Mfrs. Ins. Co.], supra; cf., 11 NYCRR 60-2.1). Accordingly, the arbitration award is confirmed in the amount of $10,000. Because this sum is insufficient to trigger the policy's trial de novo provision, the defendant's motion to dismiss the complaint should have been granted. Mangano, P.J., Miller, Ritter and Pizzuto, JJ., concur.