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HomeMy WebLinkAbout05-3605 CORCHIN & ROSATO, P.c. By: James R. Rosato, Jr., Esquire Attorney I.D. #39132 Suite 7 Valley Forge Commons 1220 Valley Forge Road P.O. Box 987 Valley Forge, PA 19482 610-983-3500 ATIORNEY FOR PLAINTIFF Maribeth Chudyk-Heishman : COURT OF COMMON PLEAS OF : CUMBERLAND COUNTY, P A Liberty Mutual Insurance Company : No. O~- 310DS Cio,L ~8LYV) vs. APPEAL OF THE AWARD OF THE ARBITRATORS MOTION TO VACATE AND/OR MODIFY THE AWARD OF THE ARBITRATORS AND NOW, comes the Petitioner Maribeth Chudyk by and through her attorney James R. Rosato and files this Petition to Vacate and/or ModifY the Award of Arbitrators entered in this case and in support thereof avers the following: 1. This case arises from an automobile accident which took place in Cumberland County on May 5, 2000, involving Petitioner Maribeth Chudyk. 2. The accident occurred when the Petitioner was traveling in the left hand lane of Interstate 80 and was rear ended by another vehicle operated by Mr. Steven Verdensky. 3. Immediately prior to impact, Petitioner was forced to slow her vehicle because the vehicle directly in front of her operated by Ms. Abigail Mearig had applied its brakes and pulled off onto the left hand shoulder/median strip of the highway. 4. Suit was filed in the Court of Common Pleas by the Petitioner against both Mr. Verdensky and Ms. Mearig. 5. With the consent of Liberty Mutual Insurance Company, the Petitioner settled her claim with defendant Verdensky for his policy limits by I entering into a Pro Rata Release which destroyed any potential joint and several liability on the part of non settling defendant Mearig. 6. Prior to receiving consent to settle, plaintiff confirmed with Liberty Mutual that if joint and several liability was destroyed, defendant Mearig would only be legally responsible far her "pro rata share" of the total verdict and therefore Liberty Mutual would only receive credit for Mearig's pro rata share in any underinsured motorist claim. (See Plaintiffs Exhibit "A", letter dated May I, 2001). 7. Petitioner then made a claim for underinsured benefits with Liberty Mutual at which time the plaintiffs asked the arbitration panel to determine if Mearig was negligent and if so, her "pro rata" percentage of responsibility. 8. In May 2003, the arbitrators issued a decision that if Petitioner proceeded to underinsured arbitration prior to resolving the third party claim against Mearig, Liberty Mutual would receive credit far the entire insurance policy of Ms. Mearig as opposed to only her pro rata share of responsibility. (See opinion attached as Exhibit "B".) 9, Shortly thereafter Petitioner settled with defendant Mearig for an amount less than the policy limits of her insurance coverage which was done with the full knowledge and consent of Liberty Mutual Insurance Company. 10. On May 24, 2005, an arbitration hearing was held pursuant to the Pennsylvania Uniform Arbitration Act at which time the issue of what if any credit Liberty Mutual Insurance Company should receive from the settlement with Mearig was again argued. II. The portion of the Liberty Mutual policy dealing with exhaustion of the underlying limits states that Liberty Mutual will pay underinsured motorist benefits but only if "The limits of liability under any applicable bodily injury bonds or policies have been exhausted. . . . " (See copy of the UM-UIM portion of the insurance policy attached as Exhibit "e") 12. On June 16, 2005, Petitioner received the decision of the arbitrators in this matter awarding gross damages in the amount of $300,000.00 to Petitioner, giving Liberty Mutual credit for the entire policy limits applicable to both 2 Verdensky and Mearig but without determining Mearig's "pro rata" share of responsibility (Exhibit "D"). 13. Petitioner asserts that the language in the Liberty Mutual Policy violates public policy in that it does not permit/require the arbitration panel to determine whether Ms. Mearig was causally negligent so as to determine whether the insured is legally entitled to recover from her. 14. Petitioner also asserts that the language of the Liberty Mutual policy violates public policy that it does not allow or permit the arbitration panel to decide the comparative negligence of multiple tortfeasors (i.e. Mearig) so as to determine the amount that the insured is "legally entitled to recover from potential tortfeasors" . 15. The language in the Liberty Mutual policy has the affect of forcing the insureds to proceed to trial against various tortfeasors who mayor may not be legally responsible thereby incurring additional costs and exhausting time and resources when it is not necessary to do so, 15 Title 75 MVFRA ~ 1731 reqUires that victims of motor vehicle accidents receive UIM benefits that he/she is "legally entitled to receive" from an underinsured driver. By not allowing/requiring the panel to determine the comparative negligence of the tortfeasor and what the insured is legally entitled to recover, the Liberty Mutual policy violates this section of the Act. For all the foregoing reasons Petitioner respectfully asks this Honorable o Court to issue a Rule to Show Cause why the instant arbitration award should not be vacated and/or modified. CORCHIN &ROSATO,P.C. mes R. Rosato,Jr., Esquire 1\ttorney for Petitioner Date: 7#'7/0) ", , 3 CORCHIN & ROSATO, P,C. Atlorneys~al-Law CorchinLJ.w@aol.com The Commons at Valley Forge Suite Seven, PO Box 987-23 Valley Forge. PA [9432 Mark A. Corchin, LL.:-'I.' James R. Rosato, Jr. . \1"'31r.R OF LAWS TRI,\L ,\!)Vrx,ICY f 611)) 983-3500 (314) 231.2370 Fox (610) 9.1:-1)610 :Vlav L 21)1)! ['vIs, Trina Berry Liberty ZvlutuCll Insur:mce Compan'i PO. Box 1128 Blue BelL PA 19423 RE: Our Client/Your Insured: :VIJ.flbeth Chudvk-Heishmun First P:u'tV Claim ~: .~L 331)\ [.!. 7f); -99 DI,~: . 51.!.,QQ l'ndermsured :Vlotcrist CiJlm Dear ;"[s. Berry: This letter is a follow up to mv .~pril 26. :CO I letter asking :'C[ ;~onsent to settle and enter into ajoint tOrlfeasor release wah one ot- the Defendants. Ste':e Verdenskv In order to clarify our position. I have enclosed my lastest draft of the proposed Release. Please note that although the Release is in effect a "Pro Rata" Release, I have included wordin~ to the effect thut a11 non se[[lln~ co-defendants. are still jointly and severlv liable for the fu11 Jm-ount of the verdlct. This wOllld theoreticCllly a110w me to collect any short fall from the non settling Defendant even though he has no right of contribution against the settljni:>: Defendant. In the event that mv reading of this Release is not followed bv a Court. I contend thit I should be oermitted to gO to Libertv Mutual as the underinsured cani'er to collect the short fall. \i.e, the diffe~ence betwee~ the amount the non-settling Defendant must pay by law and the amount of the verdict). As an example. assume a trial results In a verdict in the amount of $500,000,00 and the jury apportions liability 75% to Mr. Verdensky (settling Defendant) and 25% Ms. :Ylearig (non-settling Defendant). If by law, Ms. Mearig is oniv req!;lired to pay the Pro Rata share (;5'70 .'(,5500,000.001 which Is 5 125,OOO,CO, and she receives $115,000.00 from Mr. Verdensky. she would obtain S235.00000 out of a possible S500.000.CO from the tortfeasors. We contend that the short fall of $265.000.00 should be paid through her underinsured motorist benetits, up to the limits of her policy. In order for me to go forward with this settlement. it is impero.tive that I receive your consent in writing, not only to the settlement itself, but also to this Interpretation of the Release and the underinsured motorist provisions of her policy. I look forward to hearing from you in regards to receiving your consent to settle according to these terms. If you would like to discuss this, please feel free to contact our office. Thank you for your courtesy and cooperation in this matter. Verv_trulv vours"~ . .. PLAINTIFF'S EXHIBIT ._-- ---- ,- "AU -.' :~::::~';?? ''';.~~c. ALl.STATEe INTERNATIONAL MARIBETH CHUDYK-HEISHMAN UIM ARBITRATION v. LIBERTY MUTUAL DECISION OF THE ARBITRATORS On May 14, 2003, argument was held before the panel of arbitrators regarding a legal issue raised by the parties. Specifically, prior to proceeding to arbitration on the issue of liability and damages, the parties requested the arbitrators to make a ruling as to the amount of "credit" to which Liberty Mutual would be entitled. This claim arises out of an accident that happened on May 4, 1999, on Route 81. The Plaintiff, Maribeth Chudyk-Heishman, was operating a 1997 Ford Escort LX. Directly in front of the Chudyk-Heishman vehicle was an automobile being operated by Abigail Mearig. Behind the Chudyk-Heishman vehicle was a 1997 Ford Clubwagon being operated by Steven Verdensky. Apparently Ms. Mearig applied her brakes in order to pull off the roadway and perhaps make a U-turn. Ms, Chudyk-Heishman was then rear-ended by the vehicle being operated by Steven Verdensky, Ms. Chudyk-Heishman has settled her claims against Steven Verdensky in exchange for a release and payment of the policy limits of $100,000. No settlement has occurred regarding the claim against Abigail Mearig. The parties have requested the arbitrators to render a decision as to what "credit" Liberty Mutual would be entitled to if the matter is arbitrated at this time. The parties PLAINTIFF'S EXHIBIT IIBII All-STATEe INTERNATIONAL disagree as to the interpretation of Krakower v, Nationwide Mutual Insurance Company, 2001 Pa.Super. 372 (2001). After careful consideration, the arbitrators have determined that if the claim is submitted to them for arbitration at this time, the arbitrators would first Getermine whether there is any negligence on Ms, Mearig. If the arbitrators determine that there is causal negligence attributed to Mearig, the arbitrators would give Liberty Mutual a credit for the entire amount of the Mearig policy. In light of this decision, the arbitrators recognize that Plaintiff may not wish to arbitrate at this time and proceed instead with the pending tort action. If the Plaintiff decides to pursue that option, the arbitrators believe that under the terms and conditions of the policy issued by Liberty Mutual that Liberty Mutual would be bound by any decision of the court in the pending tort action, This would include a decision as to the respective liability of the parties, damages, and effect of th re ase, James G. Nealon, III, Esquire THIS ENDORSEMENT CHANGES THE POLlCY. PLEASE READ IT CAREFULLY. UNDERINSURED MOTORISTS COVERAGE. PENNSYLVANIA (NON-STACKED) AS 2050 02 96 (PP 04170695) With respect to the coverage provided by this endorsement, the provisions of the policy apply unless modified by the endorsement. SCHEDULE UNDERINSURED MOTORISTS COVERAGE Description Limit of of Vehicle Liability Premium $ $ $ $ $ $ INSURING AGREEMENT A. We will pay compensatory damages which an "in- sured" is legally entitled to recover from the owner Dr operator of -an "Underinsured motor vehicle" because of "bodily injury": . 1. Sustained by an 'insured'; and 2. Caused by an accident, The owner's Of operator's liability for these damages must arise out of the ownership, maintenance or use of the "underinsured motor vehicle", We will pay under this coverage only if 1. or 2. below applies: 1. The Hmits of liability under any applicable bodily in- jury liability bonds or poHcies have been exhausted by payment of judgments or settlements; or 2. A tentative settlement has been made between an "insured" and the insurer of the 'underinsured motor vehicle' and we: a Have been given prompt written notice of such tentative settlement; and b. Advance payment to the 'insured' in an amount equal to the tentative settlement within 30 days after receipt of notifICation. No judgment for damages arising out of a suit brought against the owner or operator of an "underinsured motor vehicle' is binding on us unless we: 1. Received reasonable notice of the pendency of the suit resulting in the judgment; and 2. Had a reasonable opportunity to protect our interests in the suit. B. 'Insured" as used in this endorsement means: 1. You or any "family member". 2. Any other person 'occupying' 'your covered auto". 3. Any person for damages that person is entitled to recover because of "bodily injury" to which this coverage applies sustained by a person described in 1. or 2. above, C. 'Underinsured motor vehicle' means a land motor v~ hicle or trailer of any type to which a bodily injury liabil- ity bond or policy applies at the time of the accident but the amount paid for "bodily injury" under that bond or policy to an 'insured" is not enough to pay the full amount the 'insured' is legally entitled to recover as damages. However, 'uninsured motor vehicle" does not include any vehicle or equipment 1. For which liability coverage is provided under Part A of this policy. 2. Owned by any governmental unit or agency, 3. Operated on rails or crawler treads. 4. Designed mainly for use off public roads while not on public roads. 5. While located for use as a residence or premises, EXCLUSIONS A, We do not provide Underinsured Motorists Coverage for 'bodily injury" sustained: 1. By you while 'occupying', or when struck by, any motor vehicle you own which is not insured for this coverage under this policy. This includes a trailer of any type used with that vehicle. 2. By a "family member": a. Who owns an auto, while 'occupying", or when struck by, any motor vehicle owned by you or any "family member" which is not insured for this coverage under this policy. This includes a trailer of any type used with that vehicle, b. Who does not own any auto, while 'occupying', or when strucf< by, any motor vehicle you own which is insured for this coverage on a primary basis under any other policy. B. We do not provide Underinsured Motorists Coverage for "bodily injury" sustained by any person: 1. While "occupying" 'your covered auto" when it is being used as a public or livery conveyance, This exclusion (B.1.) does not apply to a share-th~ expense car pool. 2. Using a vehicle without a reasonable belief that that person is entitled to do so. C. We do not provide Underinsured Motorists Coverage for 'noneconomic loss' sustained by any person to whom the limited tort alternative apPlies, resulting from "bodily injury' caused by an accident involving an "underinsured motor vehicle', unless the 'bodily injury" sustained is a "serious injury". This excl 1. If v PLAINTIFF'S EXHIBIT Iy: e 'underinsured motor "e" Page 1 of3 All.STATE~ INTERNATIONAL :) ". I a. Is convicte<l, or accepts Accelerated Rehabil- itative Disposition, for driving under the influence of alcohol or a controlled substance in that accident; b. Is operating a motor vehicle registered in another state; or c. Intends to injure himself or another person, provided that the individual does not intent- ionally injure himsell or another person merely because his act or failure to act is intentional or done with his realization that it creates a grave risk of causing injury if the act or omission causing the injury is for the purpose of averting borlily harm to himself or another person. 2. If that person is injured while 'occupying' a motor vehicle:insure<l under a commercial motor vehicle insurance policy. D. This coverage shall not apply directly or indirectly to benefrt any insurer or sell-insurer under any of the following or similar law: 1, Wor1<ers' compensation law; or 2. Disability benefrts law. E. We do not provide Underinsured Motorists Coverage for punitive or exemplary damages. UMIT OF LIABILITY A. The limit of liability shown in the Sche<lule or in the Declarations for Underinsured Motorists Coverage is our maximum limit of liability for all damages resulting from any one accident This is the most we win pay regardless of the number of: 1. 'Insureds'; 2. Claims made; 3. Vehicles or premiums shown in the Schedule or in the Declarations; or 4. Vehides involve<l in the accident. B. The limit of liability shall be re<luced by all sums paid because of the 'bodily injury" by or on behaH of persons or organizations who may be legally respons- ible. This includes all sums paid for an 'insured's' attorney either directly or as part of the amount paid to the 'insured'. It also includes all sums paid under Part A ofthis policy. C. No one will be entitled io receive duplicate payments for the same elements of loss under this coverage and Part A, Part B or Part C of this policy. O. We will not make a duplicate payment under this coverage for any element of loss for which payment has been made by or on behalf of persons or organization who may be legally responsible. E. We will not pay for any element of loss if a person is entitled to receive payment for the same element of loss under any of the following or similar law: 1. Wor1<ers' compensation law; or 2. Disability benefrts law. . / AS 2050 02 96 (PP 041706 95) OTHER INSURANCE If there is other applicable similar insurance available under more than one policy or provision of coverage: The following priorities of recovery apply: First The Underinsured Motorists Coverage applicable to the vehicle the 'insured" was 'occupying' at the time of the accident. Second The policy affording Underinsured Motor- ists Coverage to the 'insured" as a named insured or family member. 1. When there is applicable insurance available under the First priority: a. The limit of liability applicable to the vehicle the "insured" was 'occupying', under the policy in the First priority, shall first be exhausted; and b. The maximum recovery under all policies in the Second priority shall not exceed the amount by which the highest limit. for anyone vehicle under anyone policy in the Second priority exceeds the limit applicable under the policy in the First priority. 2. When there is no applicable insurance available under the First priority, the maximum recovery under all policies in the Second priority shall not exceed the highest applicable limit for anyone vehicle under arT'{ one policy. If two or more policies have equal priority, the insurer against whom the claim is first made shall process and pay the claim as if wholly responsible for all insurers with equal priority. The insurer is thereafter entitled to recover contribution pro rata from any other insurer for the bene- fits paid and the costs of processing the claim. If we are the insurer against whom the claim is first made, we will pay, subject to the limit of liabirlty shown in the Schedule or in the Declarations for Underinsured Motor- ists Coverage, after we and all other contributing insurers agree: 1. Whether the "insured' is legally entitled to recover damages from .the owner or operator of an 'under- insured motor vehicle'; and 2. As to the amount of damages. ARBITRATION A. If we and an 'insured' do not agree: 1. Whether that 'insured' is legally entitled to recover damages; or 2. As to the amount of damages which are recover- able by that "insured"; From the owner or operator of an 'underinsured motor vehicle' then the matter may be arbitrated. Either party may make a written demand for arbitra- tion. Arbitration shall be conducted in accordance with the provisions of the Pennsylvania Unifonn Arbi- tration Act,. Each party will select an arbitrator. The two arbitrators will select a third, If they cannot agree Page20f 3 '1 within 30 days, either may request that selection be made by a judge of a court having jurisdiction. Arbitration shall not, however, be a means of settle- ment should the dispute involve: 1. Any form of inter- or intra-policy stacking, or 2. Selection of a coverage option, or a waiver of such coverage, or 3. Determination of residency in defining who is or is not an insured under this coverage, or 4, Statutes of limitation, or 5. Determination of whether a claimant is an insured under t'1ese coverages. B. Each party will: 1. Pay the expanses it incurs; and 2. Bear the expenses of the third arbitrator equally. C. Unless both parties agree otherwise, arbitration will take place in the county in which the 'insured' lives. Local rules of law as to procedure and evidence will apply. A decision agreed to by two of the arbitrators will be binding. AOOmONAL DUTIES A person seeking Underinsured Motorists Coverage must also promptly: 1. Send us copies"of the legal papers if a suit is brought; and 2. Notify us in writing of a tentative settlement be- AS 2050 02 96 (PP 04170695) tween the 'insured' and the insurer of the 'under- insured motor vehicle' and allow us 30 days to advance payment to that 'insured" in an amount equal to the tentative settlement to preserve our rights against the insurer, owner or operator of such 'underinsured motor vehicle'. PART F. GENERAL PROVISIONS The following is added to the Our Right To Recover Payment provision of Part F: OUR RIGHT TO RECOVER PAYMENT Our rights do not apply under paragraph A. with respect to Underinsured Motorists Coverage if we: 1. Have been given prompt written notice of a tentative settlement between an 'insured' and the insurer of an 'underinsured motor vehicle'; and 2. Fail to advance payment to the 'insured" in an amount equal to the tentative settlement within 30 days after receipt of notification. If we advance payment to the 'insured" in an amount equal to the tentative settlement within 30 days after receipt of notification: 1. That payment will be separate from any amount the "insured" is entitled to recover under the pro- visions of Underinsured Motorists Coverage; and 2. We also have a right to recover the advanced payment This endorsement must be attached to the Change Endorsement when issued after the policy is written. Includes copyrighted material of Insurance SeJVices OIIice, Inc., with its permission. Copyright, Insurance Services Office, Inc., 1994 Page 30f3 MARIBETH CHUDYK-HEISHMAN UIM ARBITRATION v. LIBERTY MUTUAL DECISION OF THE ARBITRATORS The Arbitrators find that the gross amount of damages to which Maribeth Chudyk-Heishman is entitled is $300,000. The amount should be reduced by all payments made on behalf of Steven Verdensky and the policy limits applicable to the vehicle being driven by Abigail Mearig. Mr. Lyons dissents on the issue o~ Liberty Mutual should be given, James G. Nealon, III, Esquire PLAINTIFPS EXHIBIT flo" Alt-STATE~ INTERNATIONAL \2 ~ p l}( ~ \f ~ w Ul - ~ ~ ~ - In .c. r 1- ...> 0 (; c::> :::::c1 (." c,) "J' .....\ ~::__ -:C\~t\ :r'~_ .......'. ,- ",.,.\ r -;), ~;,~~(' -- -- ~ -' ~., t""-' -- OSBORNE & RETTIG, P,C, 126-128 Walnut Street Harrisburg, P A 17101 Telephone; 717-232-3046 Fax: 717-232-3538 By: Jeffrey B, Rettig, Esquire Attorney for Defendant Supreme Ct. #19616 iretti2:@hoslawoa.com MARIBETH CHUDYK-HElSHMAN IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYL V ANlA v, LIBERTY MUTUAL INSURANCE COMPANY NO. 2005-3605 REPLY OF RESPONDENT, LIBERTY MUTUAL INSURANCE COMPANY, TO MOTION TO VACATE AND/OR MODIFY THE AWARD OF ARBITRATORS AND MOTION OF RESPONDENT TO CONFIRM DECISION OF THE ARBITRATORS AND NOW, comes the Respondent, Liberty Mutual Insurance Company, by its attorneys, Osborne & Rettig, P.C., and Replies to the Motion to Vacate and/or Modify the Award of the Arbitrators filed on behalf of Maribeth Chudyk-Heishman as follows: L Denied. To the contrary, this case arises from an accident which occurred on May 4,1999, not May 5,2000. 2. Denied as stated. The accident occurred when the Petitioner (sometimes hereinafter referred to as "Plaintiff') was following too closely another vehicle in the left hand lane ofInterstate 81 and, when the other vehicle applied its brakes, Petitioner was unable to stop within the assured clear distance ahead. It is admitted that an impact occurred between the rear- end of Petitioner's vehicle and a following vehicle operated by Mr. Verdensky. I 3. Admitted with clarification. It is believed that Ms. Mearig unexpectedly slowed or stopped her vehicle in the left hand lane and, since Petitioner was unable to stop behind Ms. Mearig's vehicle, Petitioner then drove on to the left hand shoulder and median strip. 4. Admitted. 5. Denied as stated. It is admitted that Liberty Mutual consented to Plaintiff's settlement with Verdensky for his policy limits. It is denied that the Release was a "Pro Rata Release". To the contrary, the language in counsel's letter to Liberty Mutual seeking its consent stated that "I have included wording to the effect that all non co-settling defendants are still jointly and severly (sic) liable for the full amount of the verdict." It is admitted that counsel's letter also indicates that "In the event that my reading of this Release is not followed by a Court, I contend that I should be permitted to go to Liberty Mutual as the under insured carrier to collect the short fall." See Petitioner's Exhibit "A". To the best of Respondent's knowledge, there was never a court decision indicating that Petitioner's reading of the Release was incorrect. It is specifically denied that the Release signed by the Petitioner destroyed any potential joint and several liability on the part ofthe non settling Defendant, Mearig. 6. Denied. Plaintiff's Exhibit "A" speaks for itself, In further answer, Petitioner's counsel's correspondence indicated only that ifhis reading of the Release was not followed "by a court", then he felt he should be permitted to collect any short fall from Liberty Mutual. At no time did Respondent agree with Petitioner's interpretation that if a court did not follow his interpretation of the Release that the result would be that Liberty Mutual would have to pay any so-called shortfall. It is further denied that Petitioner's Exhibit "A" established an agreement for a "credit" for Mearig's pro rata share other than in the context of a trial with an allocation of liability by a judge or jury. Nowhere in Exhibit "A" does Plaintiffs counsel assert that an 2 allocation ofliability and thus a determination of pro rata responsibility was to be made by a panel of arbitrators as opposed to a court. 7. Admitted with clarification. It is admitted that the Petitioner asserted a claim for under insured motorist's benefits with Liberty Mutual. It is further acknowledged that at in the course of making that claim, Petitioner's attorney asked that the arbitration panel make a determination of Ms. Mearig's negligence and pro rata percentage of responsibility, 8, It is admitted that the arbitrators' decision rendered in May of2003 is attached as Exhibit "B" to the Petition. In that decision, the arbitrators determined that ifthey found any negligence on the part of Ms. Mearig, Liberty Mutual would be entitled to a credit for the entire amount of Ms. Mearig's policy. 9. Admitted with clarification. To the contrary, Petitioner settled with Defendant Mearig for a total payment of$175,000 in or about December 2003. Defendant Mearig had policy limits of $300,000. It is admitted that Liberty Mutual Insurance Company consented to the settlement with the understanding that it would receive credit for the full amount of Ms, Mearig's coverage ($300,000) as opposed to the amount paid ($175,000) or to some other amount determined by an allocation of responsibility between Ms. Mearig, Mr. Verdensky and Petitioner. 10. Admitted with clarification. It is admitted that Petitioner's counsel again urged the panel of arbitrators to accept his position which position had previously been rejected by the panel's earlier decision in May of 2003. 11. Denied as stated. The terms of the under insured motorist's endorsement issued by Liberty Mutual speak for themselves. 12. Denied as stated. It is admitted that the decision of the arbitrators is attached as Exhibit "D" to Petitioner's Petition and the terms of the award speak for themselves. As to the 3 date that Petitioner received the decision ofthe arbitrators, after reasonable investigation, Respondent is without knowledge or information sufficient to form a belief as the truth of this averment. However, Respondent does point out that the decision of the arbitrators was mailed by the Chairman of the Arbitration Panel on June 8, 2005 to Petitioner's counsel and Respondent's counsel. It was received by Respondent's counsel on June 9,2005. It is unknown whether it would have taken an additional seven days to be delivered to Petitioner's counsel. 13. Denied. It is denied that the language in Liberty Mutual's under insured motorist's endorsement violates public policy. To the contrary, it is consistent with the law in this Commonwealth to the effect that an injured party can settle with a tortfeasor for less than the policy limits of the tortfeasor on the condition that the UIM carrier is given credit for the tortfeasor's full liability limits regardless of the amount paid to settle the claim. 14. Denied as stated. It is denied that the language of the Liberty Mutual policy violates public policy. To the contrary, there is no public policy served by requiring an arbitration panel to decide comparative negligence of multiple tortfeasors when the law in this Commonwealth is that if an injured party settles with any tortfeasor for less than that tortfeasor's liability limits the VIM carrier is entitled to credit for the full amount of the tortfeasor's liability limits and thereby the UIM carrier cannot assert the "exhaustion" clause to deny arbitration, 15. Denied. The situation is no different with multiple tortfeasors than it is with one tortfeasor. The Plaintiff can either pursue his or her remedies in court or settle with the tortfeasor or tortfeasors on the condition that the UIM carrier receive full credit for the full amount ofliability coverage, regardless of the amount of the settlement. This has the effect of satisfYing the requirement that a tortfeasor's liability coverage be exhausted prior to pursuing a UIM claim. 4 15. Denied. It is denied that the Liberty Mutual policy violates the Motor Vehicle Responsibility Act. WHEREFORE, Respondent requests that Petitioner's Petition be dismissed. NEW MATTER 16. On June 8, 2005, the Chairperson of the arbitration panel mailed the decision of the arbitrators to Petitioner's counsel and Respondent's counsel at their correct addresses. See Respondent's Exhibit "A" attached hereto. 17. Respondent's counsel received the mailing from the Chairperson of the arbitration panel on June 9, 2005. 18. On information and belief it is averred that counsel for Petitioner received the decision ofthe arbitrators prior to June 15, 2005. 19. Petitioner's Petition fails to set forth a basis for vacating the award as enumerated in 42 Pa. C.S.A. 97314 odor modification of the award as listed in 42 Pa. C.S.A. 97315. WHEREFORE, Respondent requests that Petitioner's Motion be denied. RESPONDENT'S MOTION TO CONFIRM THE AWARD OF ARBITRATORS 20. Sections 7314(d) and 7315(b) of Title 42 ofPurdc.ms Consolidated Statutes authorize your Honorable Court to confirm the award made by the arbitrators. 21. As Petitioner's Petition is untimely, fails to set forth a basis for vacating or modifYing the award of arbitrators and is otherwise without merit, it should be denied and the arbitrators' award confirmed. 5 WHEREFORE, Respondent requests that the Court enter an Order confirming the awards of arbitrators issued in May 2003 and June 2005. Respectfully submitted, / ~~~7J 6 DOUGLAS LAW OFFICE 27 W. HIGH STREET P. O. BOX 261 WI LUAM P. DOUGLAS, ESQ. CARLISLE, PENNSYLVANIA 17013~026J (717) 243-1790 FAX (717) 243-8955 AI...50 ADMITTED TO PRACTICE IN FLOAIOA www.dcugl~slawoff.ce.com info@douglaslawoffic9.com CERTIF"Ie:O AS A CIVIL TRIAL ADVOCATE BY THE NATIONAL BO"'RO OF TRIAL. ADVOCACY June 8, 2005 RECEIVED JUN 0 9 2005 Jeffrey B. Rettig, Esquire Hartman, Osborne & Rettig, P.c. 126-128 Walnut St. Hanisburg,Pa.17101 James R. Rosato, Jr., Esquire Corchin & Rosato The Cornmons @ Valley Forge Suite 7 P.o. Box 987 Valley Forge, P A 19482 Re: Chudyk-Heishman v. Liberty Mutual Gentlemen: Enclosed is the Decision of the Arbitrators along with my statement for services. Thanks. WPD:a Enclosure Sincerely, -?:~, \ \ CERTIFICATE OF SERVICE I, Jeffrey B. Rettig, Esquire, hereby certify that I am this day serving a copy of the foregoing document upon the person(s) and in the manner indicated below, which service satisfies the requirements of the Pennsylvania Rules of Civil Procedure, by depositing a copy of same in the United States mail, first-class postage prepaid, as follows: James R, Rosato, Jr., Esquire Corchin & Rosato The Commons at Valley Forge Suite 7, P.O. Box 987 Valley Forge, PA 19482 OSBORNE & RETTIG, P.C. Dated: ?/2~/ rJ// (----- By: " , sqUIre (Supr me Ct. I.D. #19616 12 -128 Walnut Street Harrisburg, P A 17101 (717) 232-3046 Attorney for Respondent UNITED STATES DISTRICT CCrnRI MIDDLE DISTRICT OF PENNSYLVANIA MARIBETH CHUDYK-HEISHMAN CIVll. ACTION - LAW NO: )..cxJS- - 3<.0, Gt VII v, LIBERTY MUTUAL INSURANCE COMPANY NOTICE OF REMOVAL TO THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA: I. Liberty Mutual is a defendaot in a Motion to Vacate ,md/or Modify Award of Arbitrators filed on July 18, 2005 in the Cwnberland County Court of Common Pleas, Pennsylvania. Pursuant to provisions of Section 1441 and 1446 of Title 28 of the United States Code, the defendant removes this action to the United States District Court for the Middle District of P(:nnsylvania which is the judicial district in which the action is pending. 2, The grounds for removal of this action are; a, On July 18, 2005, Plaintiff filed a Motion to Vacate and/or Modify the Award of Arbitrators in the Cwnberland County Court of Common Pleas, Pennsylvania, No: 5002-3605. b. There is complete diversity of citizenship between the Plaintiff and Defendant in this action because: i) The Plaintiff is a citizen of the Commonwealth of Pennsylvania. ii) Defendant Liberty Mutual is a corporation that is organized and incorporated under the laws of the State of Massachusetts, with its principal place of business in Boston, Massachusetts. I c. More than $75,000, exclusive of interest and costs, is in controversy in this action. 3. This court would have had original subject matter jurisdiction of this action under the provisions of28 U.S,C, ~ 1332 ifthe action had originally been brought in federal court, Removal is, therefore, proper under 28 U.S.C. ~ 1441. 4. Removal of this case on the basis of diversity of citizenship is not precluded by the provisions of Section 1441(b) of Title 28 of the United States Code because none of the parties in interest properly joined and served as a defendant is a citizen of the Commonwealth of Pennsylvania, the State in which this action was brought, 5. The Notice of Removal is timely under Section 1446{b) of Title 28 of the United States Code because the Motion to Vacate and/or Modify was received by Defendant on July 18, 2005. This Notice of Removal is filed within 30 days of receipt of the Motion and within one year of the commencement ofthe action, so that is timely filed under 28 U.S,C, !i 1446(b), 6. All state-court papers served on the Defendant at the time of removal, consisting of: Motion to Vacate and/or Modify the Award of Arbitrators and Reply to the Motion are attached. Dated: AUl!Ust 3. 2005 Respectfully submitted, OSB & RETTIG, P,C, ~ J ,8 pI I 6- alnut Street Harrisburg, PA 17101 (717) 232-3046 2 __J ~ . ..",. <;f;RTIFICA TE OF SERYI<:~ I, Jeffrey B. Rettig, Esquire, hereby certify that I am this day serving a copy of the foregoing document upon the person(s) and in the manner indicated below, which service satisfies the requirements of the Pennsylvania Rules of Civil Procedure, by depositing a copy of same in the United States mail, first-class postage prepaid, as follows: James R. Rosato, Jr., Esquire Corchin & Rosato The Commons at Valley Forge: Suite 7, P.O. Box 987 Valley Forge, PA 19482 Dated: AUl!Ust 3. 2005 By: ey B. Rettig, E reme Ct. LD. # 616 6-128 Walnut Street Harrisburg, PA 17101 (717) 232-3046 Attorney for Respondent 3 CORCHIN & ROSATO, P.e. By: James R. Rosato,Jr., Esquire Attorney I.D. #39132 Suite 7 Valley Forge Commons 1220 Valley Forge Road P.O. Box 987 . Valley Forge, PA 19482 610-983-3500 '--'" i L\ I 1i'tVl ZOoS ,-,va I A TIORNEY FOR PLAINTIFF Maribeth Chudyk-Heishman COURT OF COMMON PLEAS OF CUMBERLANI) COUNTY, P A vs. - No. 't IPO. -' 3v. - 60 Liberty Mutual Insurance Company MOTION TO VACATE AND/OR MODIFY THE AWARD OF THE ARBITRATORS AND NOW, comes the Petitioner Maribeth Chudyk by and through her attorney James R. Rosato and f1]es this. Petition to Vacate and/or ModifY the Award of Arbitrators entered in this case and in support thereof avers the following: 1. This case arises from an automobile accident which took place in Cumberland County on May 5,2000, involving Petitioner Maribeth Chudyk. 2. The accident occurred when the Petitioner was traveling in the left hand lane of Interstate 80 and was rear ended by another vehicle operated by Mr. Steven Verdensky. 3. Immediately prior to impact, Petitioner was forced to slow her vehicle because the vehicle directly in front of her operated by Ms. Abigail Mearig had applied its brakes and pulled off onto the left hand shoulder/median strip of the highway. 4. Suit was filed in the Court of Common Pleas by the Petitioner against both Mr. Verdensky and Ms. Mearig. 5. With the consent of Liberty Mutual Insurance Company, the Petitioner settled her claim with defendant Verdensky fix his policy limits by I entering into a Pro Rata Release which destroyed any potential joint and several liability on the part of non settling defendant Mearig. 6. Prior to receiving consent to settle, plaintiff confirmed with Liberty Mutual that if joint and several liability was destroyed, defendant Mearig would only be legally responsible for her "pro rata share" of the total verdict and therefore Liberty Mutual would only receive credit for Mearig's pro rata share in any underinsured motorist claim. (See Plaintiffs Exhibit "A", letter dated May 1,2001). 7. Petitioner then made a claim for underinsured benefits with Liberty Mutual at which time the plaintiffs asked the arbitration panel to determine if Mearig was negligent and if so, her "pro rata" percentage of responsibility. 8. In May 2003, the arbitrators issued a decision that if Petitioner proceeded to underinsured arbitration prior to resolving the third party claim against Mearig, Liberty Mutual would receive credit for the entire insurance policy of Ms. Mearig as opposed to only her pro rata share of responsibility. (See opinion attached as Exhibit "B".) 9. Shortly thereafter Petitioner settled with defendant Mearig for an amount less than the policy limits of her insurance coverage which was done with the full knowledge and consent of Liberty Mutual Insurance Company. 10. On May 24, 2005, an arbitration hearing was held pursuant to the Pennsylvania Uniform Arbitration Act at which time the issue of what if any credit Liberty Mutual Insurance Company should receive from the settlement with Mearig was again argued. II. The portion of the Liberty Mutual policy dealing with exhaustion of the underlying limits states that Liberty Mutual will pay underinsured motorist benefits but only if "The limits of liability under any applicable bodily injury bonds or policies have been exhausted. . , . " (See copy of the UM-UIM portion of the insurance policy attached as Exhibit "C") 12. On June 16, 2005, Petitioner received the decision of the arbitrators in this matter awarding gross damages in the amount of $300,000.00 to Petitioner, giving Liberty Mutual credit for the entire policy limits applicable to both 2 Verdensky and Mearig but without determining Mearig's "pro rata" share of responsibility (Exhibit "D''). 13. Petitioner asserts that the language in the Liberty Mutual Policy violates public policy in that it does not permitlrequire the arbitration panel to determine whether Ms. Mearig was causally negligent so as to determine whether the insured is legally entitled to recover from her. 14. Petitioner also asserts that the language of the Liberty Mutual policy violates public policy that it does not allow or permit the arbitration panel to decide the comparative negligence of multiple tortfeasors (i.e. Mearig) so as to derermine the amount that the insured is "legally entitled to recover from potential tortfeasors". 15. The language in the Liberty Mutual policy has the affect of forcing the insureds to proceed to trial against various tortfeasors who mayor may not be legally responsible thereby incurring additional costs and exhausting time and resources when it is not necessary to do so. 15 Title 75 MVFRA ~ 1731 requires that victims of motor vehicle accidents receive UIM benefits that he/she is "legally entitled to receive" from an underinsured driver. By not allowing/requiring the p:mel to determine the comparative negligence of the tort feasor and what the insured is legally entitled to recover, the Liberty Mutual policy violates this section of the Act. For all the foregoing reasons Petitioner respectfully asks this Honorable o Court to issue a Rule to Show Cause why the instant arbitration award should not be vacated and/or modified. CORCHIN & ROSATO, P.e. ~ /~ By: ~/ ,:::::::---:::.' es R. Rosato,}r., Esquire 1\ttorney for Petitioner Date: '7/1'1/0) / ' 3 r-,) '::::l ~~ :"r-~' o " --1 T p1 (j -c1 ~) ...., ~iJ co .<