Under some auto insurance policies, it is required of plaintiffs to handle any claims against the insurance company through arbitration. Although the proceedings differ from those that take place in a courtroom, it is no less a necessity for accident victims to secure experienced legal representation. The total amount of damages one receives could highly depend on it.
Arbitration is a type of alternative dispute resolution process in which a neutral third party (arbitrator) hears the evidence and makes a decision – much the same way a judge would. However, there are no technical rules of evidence, which can either help or hurt your case, depending on your situation. Either way, you can bet the insurance company is going to fight aggressively to whittle down your overall compensation.
The recent case of Cedillo v. Farmers Insurance Co., weighed by the Idaho Supreme Court, was an appeal stemming from an arbitration decision regarding damages in a motorcycle accident.
According to court records, plaintiff was injured in May 2008 when riding as a passenger on a motorcycle. The owner/operator of the motorcycle drifted to the right and struck a concrete barrier. (The two later married.)
Plaintiff had an insurance policy with defendant, and the contract obligated the insurer to compensate insured for damages caused by an underinsured motorist (UIM). The motorcycle operator had his own insurance policy that allowed for up to $100,000 in bodily injury coverage, plus $5,000 in medical payment coverage.
A year after the crash, plaintiff notified insurer she settled the claim with the operator’s insurance company for his policy limits. She then demanded her policy limits of $500,00, and asked that the matter be resolved in a month. The insurer responded by sending her a check for $25,000, which the company indicated was the valuation of her UIM claim.
The policy required disputes be handled through an arbitrator, and that’s what happened. Arbitrator issued an interim award indicating plaintiff suffered $122,000 in medical expenses, $135,000 in lost income and $150,000 in non-economic damages. This meant the total award was $407,000, without any adjustments.
Arbitrator then adjusted for the amount operator’s insurance had already paid, reduced for a pre-existing condition plaintiff had (with unsupported medical expenses) and the earlier $25,000 payment. After all these reductions, final award came to $100,333. Arbitrator determined interest from a year after the crash (when the $25,000 was paid) because that was the point at which insurer had sufficient information to investigate and determine liability fairly and accurately. After several tabulations, arbitrator determined total prejudgment interest to be $100,300.
Plaintiff sought to affirm the award by the district court, and also to secure attorney fees. Insurer meanwhile filed a motion to reconsider on the prejudgment interest, arguing it had paid before the arbitration order was final. The award was amended for a reduction of $1,000.
District court affirmed arbitrator’s final award and declined to modify the prejudgment interest, as requested by insurer. The court also awarded $121,000 in attorney’s fees.
Insurer appealed, arguing the prejudgment interest was miscalculated and plaintiff wasn’t entitled to attorney’s fees, but the Idaho Supreme Court affirmed.
This case shows that even if a motorcycle accident lawsuit starts in an arbitrator’s office, it may not end there. You will need an experienced legal team to guide you each step of the way.
Contact the Carolina injury lawyers at the Lee Law Offices by calling 800-887-1965.
Cedillo v. Farmers Insurance Co., March 3, 2015, Idaho Supreme Court
More Blog Entries:
Vargas v. FMI, Inc. – Graves Amendment Protection Not Granted to Motor Carrier, Feb. 12, 2015, Asheville Accident Lawyer Blog