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Shiffer v. Liberty Mutual Fire Insurance Co.

United States District Court, M.D. Pennsylvania

July 22, 2019

TIMOTHY SHIFFER, Plaintiff,
v.
LIBERTY MUTUAL FIRE INSURANCE COMPANY Defendant.

          MEMORANDUM OPINION

          ROBERT D. MARIANI UNITED STATES DISTRICT JUDGE

         I. Introduction and Procedural History

         The above-captioned action was filed by Plaintiff, Timothy Sniffer, in the Lackawanna County Court of Common Pleas against Defendant Liberty Mutual Fire Insurance Company (hereinafter "Liberty Mutual") for breach of contract (see Doc. 2). Defendant thereafter removed this action to federal court on June 6, 2017 (Doc. 1).

         Following the completion of fact discovery, Defendant filed a Motion for Summary Judgment (Doc. 15) asserting that Plaintiffs claims against Liberty Mutual are barred by the doctrine of collateral estoppel. The parties have fully briefed the motion, and it is now ripe for adjudication. For the reasons set forth below, the Court will grant Defendant's motion.

         II. Statement of Undisputed Facts

         Defendant Liberty Mutual has submitted a Statement of Material Facts (Doc. 17) as to which it submits there is no genuine issue or dispute for trial, as well as a number of exhibits[1] attached thereto. Plaintiff submitted a Response to the Statement of Material Facts (Doc. 25), with the result being that the following facts have been admitted except as specifically noted.

         The above-captioned action arises out of a two-car accident that occurred on March 14, 2013, when Timothy Shiffer's car was hit by a vehicle driven by Ann Malysa. (Doc. 17, at ¶ 1). Shiffer seeks to recover underinsured motorists coverage pursuant to his insurance policy provided and underwritten by Liberty Mutual Fire Insurance Company, policy number A02-281-125861-60 2 9, with effective dates from August 14, 2012, to August 14, 2013 (hereinafter the "Policy"). (Id. at ¶ 2).

         Shiffer's Policy contains a section entitled "Underinsured Motorists Coverage - Pennsylvania (Stacked)", which includes, in relevant part, the following provision:

         INSURING AGREEMENT

         A. We will pay compensatory damages which an "insured" is legally entitled to recover from the owner or operator of an "underinsured motor vehicle" because of "bodily injury":

1.Sustained by an "insured"; and
2.Caused by an accident.

         ("Policy", Doc. 17-1, Ex. 2, at 45; see also, Doc. 17, at ¶ 3). The Policy further defines the term "underinsured motor vehicle" as follows:

         C. "Underinsured motor vehicle" means a land motor vehicle or trailer of any type to which a bodily injury liability bond or policy applies at the time of the accident but the amount paid for "bodily injury" under that bond or policy to an "insured" is not enough to pay the full amount the "insured" is legally entitled to recover as damages.

         ("Policy", Doc. 17-1, Ex. 2, at 45).

         At the time of the car accident at issue, Ann Malysa maintained an automobile insurance policy with Allstate which provided up to $300, 000.00 in liability coverage. (Doc. 17, at ¶ 6).

         [2]

         Plaintiff filed a separate lawsuit against Malysa in the Court of Common Pleas of Lackawanna County (hereinafter "third party claim") as a result of the March 14, 2013 car accident. (Id. at ¶ 7). Shiffer and Malysa, through their respective counsel, agreed to submit the third party claim to a "binding arbitration" and entered into a written "Binding Arbitration Agreement" signed by both Shiffer and his counsel on December 20, 2016. (Id. at ¶ 8; see also, Binding Arbitration Agreement, Doc. 17-1, Ex. 3-A).[3]

         Shifter testified at his deposition in the present action that he chose to sign the binding arbitration agreement, that nothing prevented him from reading it before he signed, that he did not make any changes before he signed it, and that he was represented by counsel when he signed it. (Doc. 17, at ¶ 9).

         Pursuant to the Binding Arbitration Agreement, "[t]he Arbitrator will make his decision regarding all disputed issues using the law of this jurisdiction." (Binding Arbitration Agreement, Doc. 17-1, Ex. 3-A, at ¶ 1). The Agreement provided that "[t]he parties agree that the decision of the Arbitrator is final and binding with no right of re-hearing or appeal in any forum or court, and that any award ultimately rendered will constitute full settlement of all claims submitted to this arbitration." (Id. at ¶ 2; see also, Id. at ¶ 10 ("If the Arbitrator's Award less the credits and off-sets falls within the low/high parameters [$30, 000.00/$300, 000.00], that sum is the amount that Defendant [Malysa] shall pay Plaintiff [Shifter] as full and final settlement of this claim.")). The Binding Arbitration Agreement further contained a statement that "[t]his agreement is not intended to prevent the Plaintiff from pursuing an underinsured motorist claim against his own insurance company." (Id. at¶ 16).

         Pursuant to the signed "Binding Arbitration Agreement", the third party claim proceeded to an arbitration hearing on or about January 4, 2017, before Judge Thomas A. Wallitsch (Ret.), as the sole arbitrator. (Doc. 17, at ¶ 10). In connection with the binding arbitration of the third party claim, Sniffer submitted two arbitration briefs and exhibits to Judge Wallitsch and testified at the hearing. (Id. at ¶¶ 11, 12). Sniffer was represented by counsel throughout the entirety of his third party claim against Malysa. (Id. at¶ 14).

         In Plaintiffs "Arbitration Brief on Behalf of Plaintiff, Timothy G. Shifter", submitted in the third party claim, Plaintiffs counsel alleged that "[a]s a result of the [accident with Malysa], Mr. SHIFFER sustained a cervical disc disruption at ¶ 5-C6, C6-C7 central disc protrusion, and L3-4 and L4-5 disc bulging." (Plaintiffs Arbitration Brief, Doc. 17-1, Ex. 3-B, at 2). Plaintiffs Brief further asserted that:

According to Dr. Bednarz, Dr. Wolk, Dr. Henderson, and Dr. DePietro, Mr. SHIFFER will continue to suffer from his injuries into the future since they have not resolved. Further, Dr. Henderson has discussed with Mr. Shifter an anterior cervical fusion at ¶ 4-6 with the likelihood of a multilevel fusion with instrumentation. Accordingly, Mr. SHIFFER, is seeking future damages, past and present damages.

(Id. at 5-6). (See also, Id. at 7 (Plaintiff "has been totally disabled from his pre-injury employment as a truck driver and will continue to suffer continued pain and flare-ups from his injuries"); id. (Plaintiff "is also seeking compensation for his past loss of income.... and the diminution of his future earning capacity and economic horizons"); id. at 8 ("Plaintiff was and is presently unable to perform all of the physical demands of her [sic] pre-injury position" and Plaintiff's "treating physicians have opined that due to his injuries and limitations imposed he will never be able to perform that position"); id. at 8-9 ("Plaintiff is seeking both past, present and future damages in each of the categories of damages indicated above")).

         In Plaintiffs second Arbitration brief submitted to Judge Wallitsch, he summarized his injuries as "severe and permanent injuries to his cervical and lumbar spine." (Doc. 17-1, Ex. 3-C, at 1). Plaintiffs brief set forth the opinions of several physicians who had diagnosed him with, among other injuries, cervical strain, thoracic strain, lumbar strain, and neck and back pain (id. at 2). Plaintiff further asserted that an MRI of his cervical spine on August 6, 2013,

revealed C4-5 mild/moderate left paracentral disc protrusion impressing on the ventral thecal sac with mild deformity of the central spinal cord, C5-C6 mild broad-based disc bulge with osseous ridging more eccentric to the right impressing upon the ventral thecal sac causing mild flattening of the central spinal cord with moderate right neural foraminal narrowing, and C6-C7 minimal central disc protrusion impressing upon the ventral thecal sac.

(Id. at 3). (See also, Id. (stating that Dr. Lyness diagnosed Plaintiff with "C4-5 small right disc bulge with mild neural foraminal stenois and C5-6 left disc osteophyte with mild neural foraminal stenosis"); id. at 3-4 (stating the Dr. Wolk "diagnosed myofascial pain of thoracic spine, lumbosacral spine and cervical spine from sprain/strain type of injuries, aggravation of underlying degenerative problems within the cervical spine particularly at the right C5-6 level with aggravation of underlying degenerative disc disease and foraminal stenosis resulting in some radicular symptomology"); id. at 4 (stating that Dr. Bednarz "diagnosed cervical disc disruption at ¶ 5-C6 and lumbar myoligamentous sprain/strain with sight sided sciatica"); id. at 4, 5 (stating that Dr. Henderson twice "diagnosed cervical degenerative disc disease with radiculopathy and lumbar degenerative disc disease with radiculopathy")).

         Plaintiffs counsel attached twenty-five exhibits to his second Arbitration brief, including Emergency Room records and physical therapy records, MRIs of Cervical Spine, and reports by Drs. Bednarz, Wolk, Henderson, Lyness, Lawrence, and DePietro.

         Following binding arbitration of the third party claim, Judge Wallitsch issued an "Award of Arbitrator" on January 9, 2017, in the amount of $214, 298.37. (Doc. 17, at¶ 13).

Two days later, on January 11, 2017, Plaintiffs counsel wrote to Liberty Mutual and indicated, in part:
Please accept this correspondence as notice of presenting an underinsured motorist claim on behalf of Mr. Sniffer.
We have received an offer to settle Mr. Shiffer's third-party claim in the amount of Two Hundred Fourteen Thousand Two Hundred Ninety-Eight Dollars and thirty-seven cents ($214, 298.37) which Mr. Shiffer would like to accept in lieu of pursuing further litigation in the third party claim- Please have an underinsured motorist adjuster assigned to this claim-

(Doc. 17, at ¶ 15; see also, Doc. 17-1, Ex. 3-E).

         On January 20, 2017, a claims department representative for Liberty Mutual responded to Plaintiffs counsel stating, in part:

Please be advised that we have waived our subrogation rights against Ann Malysa and Robert Malysa, for this loss. We have no objection to your client completing a release for Geico.
Please be advised that we will be taking credit for the tortfeasor's full liability limits of $300, 000 in the Underinsured Motorist claim.

         (Doc. 17, at ¶ 16; see also, Doc. 17-1, Ex. 3-F).

         Prior to requesting and subsequently receiving Liberty Mutual's consent to settle, Shiffer did not disclose to his insurance company that the third party claim had already proceeded to a binding arbitration. (Doc. 17, at ¶ 17).

         Shiffer signed a "Release and Settlement Agreement" between himself and Ann Malysa on January 20, 2017. (See Release and Settlement Agreement, Doc. 17-1, Ex. 3-G). The release amount was $214, 298.37, the same amount of the third party binding arbitration award. (Id.). At Shiffer's deposition, he testified that it was his choice to sign the release and that he was not forced to sign it, and that he was represented by counsel when he signed it. (Doc. 17, at ¶ 19; Dep. of Shiffer, at 17).

         On January 30, 2017, "upon Praecipe for Discontinuance", the Prothonotary for the Court of Common Pleas of Lackawanna County issued an Order of Discontinuance in Shiffer's action against Malysa and discontinued the action with prejudice. (Doc. 17-1, Ex. 3-H; see also, Doc. 17, at ¶ 20).

         On February 14, 2017, Liberty Mutual sent an email to Plaintiffs counsel requesting that counsel "[p]lease advise whether or not this matter went to arbitration or mediation in the third party claim. If it did, I will need a copy of the arbitration or mediation agreement." (Doc. 17, at¶ 21). That same day, Plaintiffs counsel responded to Liberty Mutual stating, in part, that "Mr. Sniffer's third party case was concluded with the execution of a third party release and settlement agreement which I previously forwarded to you when we sought consent to settle." (Id. at ¶ 22).[4]

         On March 3, 2017, Liberty Mutual again requested a copy of the arbitration or mediation agreement with respect to the third party claim. (Id. at ¶ 23). On March 6, Plaintiffs counsel responded to Liberty Mutual stating that "the manner in which the third party case was negotiated and settled between Mr. Shiffer and Geico is not and should not be an issue or concern of Liberty Mutual regarding settlement of his underinsured motorist claim. You have granted consent to settle and waiver of subrogation." (Id. at ¶ 24).[5]

         III. Standard of Review

         Through summary adjudication, the court may dispose of those claims that do not present a "genuine dispute as to any material fact." Fed.R.Civ.P. 56(a). "As to materiality, ... [o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

         The party moving for summary judgment bears the burden of showing the absence of a genuine issue as to any material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once such a showing has been made, the non-moving party must offer specific facts contradicting those averred by the movant to establish a genuine issue of material fact. Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 888 (1990). Therefore, the non-moving party may not oppose summary judgment simply on the basis of the pleadings, or on conclusory statements that a factual issue exists. Anderson, 477 U.S. at 248. "A party asserting that a fact cannot be or is genuinely disputed must support the assertion by citing to particular parts of materials in the record ... or showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact." Fed.R.Civ.P. 56(c)(1)(A)-(B). In evaluating whether summary judgment should be granted, "[t]he court need consider only the cited materials, but it may consider other materials in the record." Fed.R.Civ.P. 56(c)(3). "Inferences should be drawn in the light most favorable to the non-moving party, and where the non-moving party's evidence contradicts the movant's, then the non-movant's must be taken as true." Big Apple BMW, Inc. v. BMW of N. Am., Inc., 974 F.2d 1358, 1363 (3d Cir. 1992), cert, denied 507 U.S. 912 (1993).

         However, "facts must be viewed in the light most favorable to the nonmoving party only if there is a 'genuine' dispute as to those facts." Scott v. Harris, 550 U.S. 372, 380 (2007). If a party has ...


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