Wednesday, June 11, 2008

No UM Coverage for Claimant Who Already Recovered from Driver's Insurer

Matter of Government Employees Ins. Co. v. Dunbar
(1st Dept., decided 6/10/2008)

Dunbar was injured while a passenger in a motor vehicle owned and operated by Chambers, which was involved in a hit-and-run accident. Geico insured the Chambers vehicle. Dunbar received a settlement payment of $25,000 from Geico, based on the negligence liability of Chambers.

Dunbar then sought to arbitrate a UM coverage claim for that same amount, which was the UM coverage limit of Chambers policy, based on the responsibility of the unidentified hit-and-run driver. Geico commenced this special proceeding to stay that arbitration on the ground that any recovery based on UM benefits (to a limit of $25,000) was offset by the $25,000 Dunbar had already recovered for this same injury.

Bronx Supreme denied Geico's petition to stay, and the First Department REVERSED:

Respondent's demand for arbitration clearly refers to the policy issued to driver Chambers. However, the only policy included in the record, in this proceeding to stay arbitration, is a separate policy issued by petitioner to the injured respondent passenger himself, in which respondent purchased supplemental uninsured/underinsured (SUM) coverage, and the court appears to have denied the petition to stay arbitration on the ground that petitioner failed to make a sufficient showing that recovery under the Chambers policy precludes recovery under the SUM provision of the policy issued to respondent.

Since respondent received $25,000 in settlement of his claimed injuries, any potential UM claim under either the Chambers policy or a SUM claim under respondent's own policy was offset by the prior settlement payment (citation omitted]). Sufficient evidence was presented to the court to make such determination, inasmuch as there was no dispute as to the existence and terms of the Chambers policy or the amount of payment of the settlement in the underlying action.

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