January 11, 2010
When You Assume...
A person injured in a motor vehicle accident received a policy limits payment from the responsible tortfeasor. He then sought additional payment from his insurance company. The attorney who had handled the claim against the tortfeasor referred the person to a second lawyer, who was present for the arbitration of the claim against his insurer. The arbitrator awarded the person nothing. Both lawyers received notice of the decision but failed to initiate litigation within the time prescribed by the insurance contract.
"In a preemptive strike," the insurer filed a petition to confirm the arbitration award. Both attorneys "submitted separate affidavits explained that they each 'assumed' that the other would notify [the insurer] that the award was not satisfactory." Neither did so.
The Rhode Island Supreme Court held that the contract provision was binding and that the failure to object to the award within 60 days required that the arbitration be confirmed. (Mike Frisch)
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