Harnden v. State Farm Mut. Auto. Ins. Co.

• Court: Superior Court of Maine
• Decided: April 9, 2010
• Docket: CUMcv-09-289
• Status: Unpublished

Opinion

STATE OF MAINE SUPERIOR COURT CUMBERLAND, ss. CIVIL ACTION DOCKET NO: CV-09-289 D ,I n' :1 .. 1.,.1, Vi./'" STATF or- M:\;NE . VICKIE HARNDEN ' ,,' , '", " "" r)fr'r.e C urn b enC:Ii:'" C'''''' ,,~

SUPEf,'.:C'ri C(:~HH Plaintiff,

v. ORDER

STATE FARM MUTUAL RECEIVED AUTOMOBILE INSURANCE CO.,

Defendant

Plaintiff Vicki Harnden seeks a declaration that defendant State Farm

Mutual Automobile Insurance Co. has illegally withheld funds due to her under

an arbitration award. Defendant State Farm has filed for summary judgment.

BACKGROUND

On June 25, 2005, plaintiff Vickie Harnden was a passenger in a vehicle

driven by Elwin Ellis. (Supp. S.M.F. 111.) While Ms. Harnden and Mr. Ellis were

in the vehicle, they were struck by another car driven by an uninsured motorist.

(Supp. S.M.F. 9[ 2.) Ms. Harnden was injured in the crash. (Supp. S.M.F. 11 3.)

At the time of the accident, Mr. Ellis had an insurance policy from

defendant State Farm with a medical payments coverage limit of $100,000 per'

person. (Supp. S.M.F. 11115-6.) Ms. Harnden carried two insurance policies, also t

issued by State Farm, each of wluch provided medical payments coverage limits

of $5,000 per person and uninsured motorist coverage limits of $100,000 per

person. (Supp. S.M.F.

aspects of all three policies for the purposes of this accident. (Supp. S.M.F. 1111 6­

9.)

1 Ms. Harnden made claims under all three policies, and while she was

being treated for her injuries State Farm made payments totaling $23,512.R8 on

her behalf. These payments were allocated to Mr. Ellis's medical payments

coverage. (Supp. S.M.F.

advance to Ms. Harnden and attributed the payment to Mr. Ellis's uninsured

motorist coverage. (Supp. S.M.F. 115.) Ms. Harnden and State Farm then entered

binding arbitration to determine the extent of Ms. Harnden's damages. (Supp.

S.M.F. (11 16.) Ms. Harnden submitted medicil bills totaling $38,762 to the

arbitrator. (Supp. S.M.F. 118.) These included the bills that State Farm had

already paid on Ms. Harnden's behalf. (Supp. S.M.F. 118.)

After considering all the evidence, the arbitrator awarded Ms. Harnden

$38,762 for past medical expenses, $32,589 for lost wages, and $60,000 for pain

and suffering, for a total award of $131,351. (Supp. S.M.F. err 19; Pl.'s Comp!. Ex.

A.) Following the arbitrator's decision, State Farm issued a $50,000 settlement

draft to Ms. Harnden under Mr. Ellis's uninsured rnotorist coverage, and a

$7,838.12 settlement draft under her own uninsured motorist coverage. (Supp.

S.M.F. 9f 20.) Wi th these settlement drafts, State Farm disbursed to Ms. Harnden

or disbursed on her behalf a total of $131,351, the precise amount of the

arbi tration award.

To review, Ms. Harnden had a total insurance coverage limit of at least

$230,000, consisting of a $25,000 medical payments coverage limi t and a $100,000

uninsured motorist coverage limit under Mr. Ellis's policy, and a $5,000 medical

payrn.ents coverage limit and a $100,000 uninsured motorist coverage limit under

2 Ms. Harnden's own policy.1 At arbitration, Ms. Harnden was awarded $131,351

in damages, which included her past medical bills that State Farm had already

paid. State Farm paid to Ms. Harnden or paid on her behalf a total of $131,351,

consisting of: (1) $23,512.88 under Mr. Ellis's medical payments coverage; (2) a

$50,000 J.dvance under Mr. Ellis's uninsured motorist coverage; (3) a $50,000

settlement draft under Mr. Ellis's uninsured motorist coverage; J.nd (4) J.

$7,838.12 settlement draft under Ms. Harnden's own uninsured motorist

coverJ.ge.

Ms. HJ.rnden filed her complaint on May 15, 2009, ,1mended August 25,

2009, arguing that State Farm was not entitled to credit the $23,512.88 it first paid

under Mr. Ellis's medical payments coverage toward the satisfaction of Ms.

Harnden's arbitration award. She characterizes this as an illegal setoff J.nd ,1n

attempt by State Farm to deprive her of a full recovery. State Farm first contends

that Ms. Harnden is not enti tIed to recover more than the sum dictated by the

arbitrc1tion aVl/ard, and further argues that the law and the insurance policies

allow it to count the initial medicc1l payments toward Ms. Harnden's total

recovery.

DISCUSSION

Summary judgment is appropriate where there are no genuine issues of

material fact and the moving party is entitled to judgment ,1S a matter of law.

M.R. Civ. P. 56(c); see nlso Levine v. R.B.I<. Cnly Corp., 2001 ME 77, (114, 770 A.2d

653, 655. Ms. Harnden admits to the material facts offered by State Farm, leaving

only the legal issues raised by those facts for this court's review.

I The court is not asked to determine whether Ms. Harnden's second insurance policy would stack on the first, effectively doubling the first policy's coverage 1i mi ts. 3 The oft-stated purpose of Maine's uninsured rnotorist statute is "to assure

a person injured by em uninsured motorist that he will be Zlble to recover, from

whc,tever source availc,ble, up to the total amount of his damages." Wescott v.

Allstnte [115., 397 A.2d, 167 (Me. 1979); sce 24-A M.R.S.A. § 2902 (2009). In this case

the court must first determine whether the arbitration award was intended to

comprise the full measure of Ms. Harnden's dc1mages. If so, the facts demonstrate

that those damages have been fully satisfied, depriving Ms. Harnden of a cause

of (Iction. Sec Peerless [115. Co. v. Progressive IllS. Co., 2003 ME 66, 9f 8, 822 A.2d

1125, 1128 (noting thZlt "the legisl

insurance," and thZlt questions generally only "mise when insurance is

insufficient to fully compensZlte the victim"); Tmsk v. AlItol/lolJ/1e 1115. Co., 1999 ME

94,91 4, 736 A.2d 237, 237-238 (crediting insurer's prior payments under medicc,l

payment coverClge toward total dClmages recovery); Wcscott, 397 A.2d at 167

(uninsured motorist coverClge intended to enable recovery only up to totClI

dClmages); Tl/criallit v. Swnll, 558 A.2d 369, 372 (Me. 1989) (prohibiting double

recovery for same loss); 22 Am. Jur. 2d Dal/lagcs § 36 (2008) (injured plaintiff is to

be mClde whole, not enriched). If Ms. Hmnden hZls recovered the full measure of

her damZlges, the issue of whZlt policies or accounts funded her recovery becomes

Zln Zlccounting question in which Ms. Hmnden hCls no demonstrated interest.

The (,rbitrZltion award itself docs not explicitly characterize the aWZlrd as

dZlmages. However, the Zlrbitrator considered all the relev,mt fZlcts and Zlwarded

Ms. Hmnden sums for lost wages and pain and suffering in addition to her

medical expenses. Treatment of these elements of damages is consistent \""ith the

arbitration clauses of the uninsured motorist coverage policies, which state:

Two questions must be decided by agreement between the insllred and us:

4 1. Is the il/sured Icgal1y entitled to collect damages fronl the owner or driver of the IIl1inslIred lIlotor vefticle; and 2. If so, in what amount?

If there is no agreement, these questions shall be decided by arbitrCition ....

(Druary Aff. Ex. A at 15.) By the terms of the policy, the arbitration aW

meant to stclnd for the total amount of damages Ms. Harnden had suffered. Ms.

I-{arnden admits as much in her c1l11ended complaint, where she states that the

parties entered into Cirbitrcltion to resolve Zl dispute over "the Zlrnount of dCllT1ages

[duel to compensc,te Ms. I-{Jxnden for her injuries." (Pl.'s Compl. el[err R-9.)

The record mCikes it cleCir thc,t the CirbitrCition JWCird of $131,351 represents

the totJl dc,mZlges Ms. J-brnden suffered in connection with the collision. It is

equally cleCir thClt f'vIs. H

c,mount of her dc,mCiges. Her medical expenses hCive been pCiid, Zlnd she hCis

received cCish for her lost wClges Cind pClin Clnd suffering. She is entitled to no

more. Sec Wescott, 397 A.2d CIt 167.

Ms. H

reimbursed ClgJin for the $23,512.RR in medica] bills State Farm JlreCldy paid on

her behJlf, becJuse in the first instClnce they were pCiid out of the medicc,l

payments coverJge rCither thCln the uninsured motorist coverJge. vVhc,t StCite

Farm chCirCicterizes as essentially Ci credit toward the satisbction of her dJmages,

Ms. HClfnden CJlls In "offset." By doing so she attempts to bring this case into

that line of CClses in which insurance companies hClve attempted to usc pCiyments

made under one policy coverJge to reduce the aVJiJable limits under another.

For example, in Wescott v. Allstate Illsllmllce, the plJintiff WJS Ci passenger

in Cin insured vehicle struck by Cin uninsured motorist. 397 A.2d at 160. The

5 p1aintiff recovered $20,000 from the insured driver's insurance company under

the driver's uninsured motorist coverage. fri. \Vhen the p1aintiff attempted to

recover additional funds from her own insurer, the defendant insurance

company claimed that the coverage limits under the plaintiffs policy should be

offset, or reduced, by the settlement figure. fri. clt 163,165. 'rhe Law Court ruled

for the pbintiff, holding that Maine's uninsured motorist statute allows an

insured to recover the full limit of each clpplicabJe uninsured motorist policy. fri.

at 170. The Court also noted, however, that the plaintiff had to "prove her legal

entitlement to dclmages from the uninsured motorist, as in tort, in order to

recover ...." fd.

More recently, in Mol/clIr v. Onirylnllri fllslImllcc Co. the plaintiff was a

passenger on a motorcycle involved in an accident with two other drivers. 2008

ME 46, {If 2, 942 A2d 1197, 1199. The first driver WclS insured for $15,()()() in

liability coverage, and the plaintiff settled with the second driver's liability

insurer for $3,000. fri. {II 4. The plaintiff also recovered $80,000 from the

motorcycle driver's insurer under the liability coverage of the driver's policy. fri.

Together, the plaintiff's total recovery from the drivers' liability po1icies was

$98,000, which the parties stipulated was less than her total damages. fri. 9[9\ 4, 7

n.3, 942 A.2d clt 1199, 1200 n.3.

Wi th her damages unsatisfied, the plaintiff filed an action to recover as an

insured under the motorcycle driver's underinsured motorist coverclge policy. fri.

9I 5, 942 A2d at 199. The policy provided a $50,000 underinsured motorist coverage limit. lri. As an insured, the plaintiff sought $35,000 under the policy, an

amount reflecting "the $50,000 policy limit offset by the $15,000 previously

recovered" from the first driver's liability insurer. fri. The defendant insurer

6 argued that the $80,()()O it had paid under the policy's liability COVeri:1ge should

offset or reduce its obligation under the policy's underinsured motorist covcrClge.

lri. err 6. The Lnv Court disagreed with the insurer and ruled for the plaintiff,

holding that payments made under the policy's fiolJility coverage could not offset

or reduce the cover(lge available under the policy's IIl/ricril/sllrer! /llotorist

coverage. fd. 91(1116-17,942 A.2d Clt 1202.

Applied to this case, Mollcl/r Zlnd Wescott show thZlt State Farm mClY not

limi t the coverage lirni ts available under one of the three policies due to

payments made under another. Similarly, St,lte Fi:lrm may not reduce the

coverage limit available under a policy's uninsured mot(wist provision for

payments made under the medical pi:1ymcnts provision. If Ms. HClrnden's

damages approached or exceeded the coverage limits available to her under the

three Sti:1te Fi:lrm policies, the ,1110cation of disbursements arnong the various

coverage provisions might give rise to i:1 legi:1] controversy. However, the facts at

hi:1nd are markedly different from such a hypothetical.

In this case, Ms. Harnden has been fully compensated fur her damZlges,

the amounts of which were well within the ,wailable coverage limitations. There

is no evidence thi:1t State Farm has <1ttempted to reduce the coverage available to

Ms. Harnden or otherwise deprive her of (1 full recovery. Quite the contrary, the

record shows that StZlte Farm provided Ms. f-lClrnden wi th medicZll coverage

during her treatment and promptly pZlid her the full balClnce of her di:1mages after

they were determined through Zlrbitration.

7 The entry is:

Defendant State Farm Mutual Autornobile Insurance CO.'s rnotion for

sU1Tlmary judgment is granted.

DATE: ~ I 1-0 10

8 UTN:AOCSsr -2009-0052769 CASE #:PORSC-CV-2009-00289

01 0000006976 DRUARY, J WILLIAM JR -----'---------------------------­ 44 ELM STREET PO BOX 708 WATERVILLE ME 04901-0708 F STATE FARM MUTUAL AUTOMOBILE INSURANCE C DEF RTND 06/08/2009 .:........:;-------=-:....:...:..:.....-_--=-.;;..;....-=---.;......::....;,..,;~

02 0000002837 TEPLER, SHELDON J -----'---------------------------­ 186 LISBON ST PO BOX 3065 LEWISTON ME 04243-3065 F VICKIE HARNDEN PL RTND 05/15/2009 ----------------