Silver v. State Farm Mutual Automobile Insurance Co.5/28/1999
Source of Appeal: Appeal from Superior Court of Pierce County
Date filed: 06/19/1998
Judge signing: Hon. Brian M. Tollefson
Judges:
Authored by Carroll C. Bridgewater
Concurring: David H. Armstrong J. Robin Hunt
Counsel:
- State Farm Mutual Automobile Insurance Company appeals a declaratory Judgement entered against it for $10,000, the amount State Farm withheld from an arbitration award payment as offset for PIP payments to its insured. We reverse.
On August 11, 1994, Dexter A. Silver was involved in an automobile accident. Because the driver of the other car was uninsured, Silver sought coverage for his injuries from his own insurance company, State Farm, under the underinsured motorist (UIM) and personal injury protection (PIP) provisions.
Silver and State Farm could not agree on the value of his UIM claim and, therefore, under the UIM provision of the policy, the parties submitted the issue to arbitration. On May 27, 1997, the arbitrator awarded a total of $55,000 to Silver, which included $10,000 in medical special damages, $40,000 in general damages, and $5,000 for loss of consortium.
On June 3, 1997, State Farm sent Silver's attorney a check for $45,000, which was the total award, minus $10,000 for the PIP offset for medical specials already paid to Silver. State Farm claimed the right to offset this amount under the terms of the policy.
Nearly one year later, on May 27, 1998, Silver filed a motion to confirm the arbitration award and a request for entry of Judgement against State Farm for the remaining $10,000. On June 19, 1998, the superior court entered an order confirming the arbitration award and ordered Judgement against State Farm for $10,000. State Farm appealed the Judgement and order and filed a motion for reconsideration. The motion for reconsideration was denied and State Farm subsequently appealed that order, too. The two appeals have been consolidated for our review.
State Farm argues that the trial court was correct to confirm the arbitration award, but erred by entering Judgement for $10,000 against State Farm while this amount was in dispute. Silver concedes that State Farm paid him $10,000 in PIP benefits, but contends that the trial court was required by the arbitration statute to confirm the award and reduce it to Judgement and that any claim for offset must be brought as a declaratory Judgement action under the court's general jurisdiction. Both State Farm and Silver rely exclusively on Price v. Farmers Ins. Co., 133 Wn.2d 490, 946 P.2d 388 (1997), for support of their conflicting positions.
Price, like this case, involved a dispute over UIM benefits for injuries sustained in an automobile accident. Price settled with the tortfeasor for the limits of his policy, $208,415; $5,000 from the city; and $24,339 in PIP benefits from his own insurance company, Farmers Insurance. Price v. Farmers Ins. Co., 82 Wn. App. 20, 22, 916 P.2d 949 (1996). However, Price, claiming that his actual damages exceeded the limits of the tortfeasor's policy, sought a further award under his UIM coverage. Farmers and Price were unable to agree on the amount of damages sustained and therefore submitted the matter to arbitration pursuant to the arbitration provision of their policy. Ultimately, an arbitration award for $275,000 was entered. Price, 82 Wn. App. at 22. Price sought confirmation of the arbitration award in superior court, arguing that Farmers owed him $66,585 in UIM benefits, the difference between the arbitration award and the settlement received under the tortfeasor's policy. Price, 82 Wn. App. at 22. Farm
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