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Regal Insurance Co. v. Canal Insurance Co.2/7/2002
(For Official Publication)
Third District, Salt Lake Department The Honorable Ronald E. Nehring
Defendant Canal Insurance Company (Canal) appeals from a summary judgment ruling in favor of Plaintiff Regal Insurance Company (Regal). The trial court awarded Regal reimbursement of personal-injury-protection benefits (PIP benefits), costs, prejudgment interest, and attorney fees. We vacate the award and remand.
BACKGROUND
In 1995, Donald Boyet borrowed a flatbed tractor trailer owned by KC Trucking and attached it to a tractor owned by Boyet and operated by Kelly Devey. While pulling the borrowed trailer with Boyet's tractor, Devey struck a pedestrian, Christina Chatwin. After receiving medical treatment for injuries caused by the collision, Chatwin submitted a claim for PIP benefits to her own automobile insurance carrier, Regal. Regal paid Chatwin the PIP benefit limit of $3,000 for her medical expenses.
Regal subsequently contacted Canal, the insurance carrier for KC Trucking, and requested reimbursement for the $3,000 PIP benefits paid to Chatwin. Canal refused Regal's request for reimbursement after concluding that 1) the trailer is not covered under a personal-injury-protection endorsement (PIP Endorsement) of the automobile insurance policy issued by Canal to KC Trucking; and 2) even if the trailer is covered under the PIP Endorsement, Regal must pursue a claim for reimbursement through arbitration. Rather than submit to arbitration, Regal filed suit against Canal, claiming that Canal breached its insurance contract by refusing "to pay PIP benefits to Christina Chatwin, or to [Regal] as her subrogee." In addition to seeking $3,000 in damages plus costs, Regal also sought prejudgment interest and attorney fees under Utah Code Ann. § 31A-22-309(5)(c) to (d) (1999).
After considering cross motions for summary judgment, the trial court granted summary judgment in favor of Regal. The trial court rejected Canal's arbitration argument in its final order and concluded in a minute entry that Chatwin was covered as an "eligible injured person" under Canal's PIP Endorsement. The trial court awarded Regal $3,000 for the PIP benefits it had paid Chatwin, plus costs, prejudgment interest, and attorney fees. Canal appeals the trial court's ruling.
ISSUES AND STANDARD OF REVIEW
On appeal, we consider two issues. First, Canal asserts that the trial court erred in not requiring Regal to pursue its claims through mandatory arbitration under section 31A-22-309(6). Second, Canal contends that the trial court erred in awarding Regal attorney fees and prejudgment interest under section 31A-22-309(5). Resolution of these issues is a matter of statutory construction. "Matters of statutory construction are questions of law that are reviewed for correctness." Platts v. Parents Helping Parents, 947 P.2d 658, 661 (Utah 1997).
ANALYSIS
This case turns on section 31A-22-309(6), which provides:
Every policy providing personal injury protection coverage is subject to the following:
(a) that where the insured under the policy is or would be held legally liable for the personal injuries sustained by any person to whom benefits required under personal injury protection have been paid by another insurer . . . the insurer of the person who would be held legally liable shall reimburse the other insurer for the payment, but not in excess of the amount of damages recoverable; and
(b) that the issue of liability for that reimbursement and its amount shall be decided by mandatory, binding arbitration between the insurers. Utah Code Ann. § 31A-22-309(6).
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