 |
 |
to fill out a simple form to connect to Personal Injury Lawyers in your area.
|
|
|
|
|
Connelly v. McVeigh1/7/2005
would bar subrogation by providing a general release to the tortfeasor. See Rivers v. Allstate Ins. Co., 312 N.J. Super. 379, 383-84 (App. Div. 1998) (summarizing the"three-step procedure" required of the injured party by Vassas and Longworth to protect a UIM claim). In other words, the injured party must preserve his UIM carrier's subrogation rights. A UIM carrier that does not respond to a request for consent to settle within a reasonable time may have waived its right to withhold consent and thus forfeit its potential subrogation claim. See Vassas, 139 N.J. at 174-75.
Zirger involved a somewhat different but related issue concerning the potential for duplicative legal proceedings engendered by the co-existence of contractual UIM arbitration and auto negligence litigation. In Zirger, the Court emphasized that duplicative, expensive, and delaying proceedings are contrary to the legislative intent and the rationale behind statutorily mandated UM/UIM coverage. 144 N.J. at 342-44. The Court held that a UIM carrier has no right to UIM arbitration after a trial of its insured's claim against the tortfeasor, as long as the carrier had notice and the opportunity to intervene as a defendant in that action. 144 N.J. at 342; see also Wylie v. Hamilton, 365 N.J. Super. 153, 155 (App. Div. 2004) (holding that the UIM carrier was bound by an auto arbitration award when the carrier fully participated and failed to seek a trial de novo; the UIM arbitration clause was unenforceable under Zirger). Cf. Scheer v. DiBenedetto, 346 N.J. Super. 550 (App. Div. 2002) (holding that the UIM carrier should have been permitted to remain as a defendant at trial after its insured settled with one of the two named defendants with the carrier's consent).
NJM's reliance upon Zirger is misplaced, and its contention that Zirger and Longworth are mutually exclusive is mistaken. In Zirger, the Court held that a UIM carrier's acquiescence in its insured's intention to try its damage claim against the underinsured tortfeasor, without first seeking contractual arbitration of the UIM claim, constituted a waiver of its right to arbitration, with the result that it was bound by the jury's verdict on damages under principles of collateral estoppel. 144 N.J. at 342. NJM would have us conclude that plaintiff here is equally bound by the jury's no-cause verdict. Such a conclusion is neither logical nor fair on these facts, in light of Vassas and Longworth.
In this case, NJM refused to allow plaintiff to accept the $100,000 Allstate policy limit, thereby obligating itself to pay that sum to plaintiff in order to preserve its subrogation claim. Neither NJM nor plaintiff demanded arbitration of the UIM claim before the trial against the tortfeasor, as Paragraphs 3 and 4 of the Resolution and Trust Agreement allowed, and NJM was permitted to intervene as a defendant in the negligence action against McVeigh. Thus each accepted the risk of being bound by the damages award in that action.
The question presented by this appeal is the effect of that decision. NJM argues in effect that the collateral estoppel effect of Zirger bars Connelly from retaining the $100,000 he received from NJM. That position is based on a misunderstanding of the nature of NJM's obligation to Connelly. NJM owed $100,000 to Connelly as the price of preserving its own subrogation rights against McVeigh, and not as a measure of Connelly's damages. While plaintiff obviously cannot recover any additional sum from NJM, having failed to prove damages in excess of the tortfeasor's policy limits, NJM nonetheless remains obligated for the payment it made to preserve its own right of subrogration. That payment was due as a consequence of its refusal to allow p
Page 1 2 3 4 5 6 New Jersey Personal Injury Attorneys
Personal Injury Lawyers
|
| |
to fill out a simple form to connect to Personal Injury Lawyers in your area.
|
|