gavel.gif (3462 bytes) Auto Insurance Law

Dual recovery exclusion does not 
apply when more than one tortfeasor

A plaintiff may recover damages from multiple insurers when there is more than one tortfeasor involved in an accident, the United States Court of Appeals for the Third Circuit has ruled. "We hold that, on the facts of this case, the "dual recovery" prohibition is invalid and unenforceable pursuant to Pennsylvania�s Motor Vehicle Financial Responsibility Law," the court said in its opinion of Nationwide v. Cosenza.

According to the opinion, in July of 1995, Mrs. Cosenza was driving a vehicle and her husband and mother (Dezii) were passengers. Cosenza�s car collided with a car driven by Angela Nicolucci. Cosenza�s huband and Dezii were seriously injured in the crash. Cosenza was also injured. The Cosenza�s and Dezii filed suit against Nicolucci. Nicolucci joined Cosenza as a defendant, claiming she was contributorily negligent.

Cosenza�s insurer, Nationwide, consistently asserted her lack of fault in the accident. The suit was settled before it went to court. In the agreement, the Cosenzas and Dezii received $15,000 from Nicolucci�s insurer, the full amount her coverage allowed.

The Cosenzas� car was covered under a policy with Nationwide that provided $500,000 in liability coverage and the same in underinsured motorist coverage. Cosenza�s husband also held an umbrella policy that provided $1,000,000 in total liability coverage and $500,000 in underinsured motorist coverage. The settlement did not include payments from any of these policies.

The Cosenzas and Dezii then sued Nationwide for damages and Mrs. Cosenza sued for loss of consortium due to her husband�s injuries. Nationwide said that the plaintiffs could not recover from them under the dual recovery exclusion.

The court stated in its opinion that, "allowing the insurers to evade payment of UIM benefits in [such a] case, where the insured had paid a premium to procure UIM coverage would be against public policy."

"To prohibit recovery denies them the UIM benefits that they paid for for many years and is contrary to the Pennsylvania Supreme Court�s statement that insureds should receive the coverage for which they pay and that voluntarily choosing to purchase UIM insurance policies reasonably created an expectation that they would be covered�the expectation of coverage prevails over the language of the policy."

The court also stated, "the MVFRL is a remedial statute that must be broadly construed to effectuate its goal of fully compensating victims injured on Pennsylvania highways. Accordingly, Pennsylvania courts narrowly construe exclusions such as the one at issue here."

"We conclude that enforcement of the dual recovery prohibition in multiple tortfeasor cases such as this one is violation of the MVFRL� we construe the dual recovery prohibition as speaking only to single tortfeasor accidents where allowing recovery would effectuate a conversion of UIM coverage."

The court remanded the case back to the District Court to determine the amount of awards under both the underinsured motorist and umbrella policies.


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