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S.B. 105 Enrolled

             1     

MOTOR VEHICLE ACCIDENT ARBITRATION

             2     
AMENDMENTS

             3     
2010 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Chief Sponsor: Stephen H. Urquhart

             6     
House Sponsor: James A. Dunnigan

             7     
             8      LONG TITLE
             9      General Description:
             10          This bill modifies the Insurance Code by amending provisions relating to the use of
             11      arbitration for certain motor vehicle accident claims.
             12      Highlighted Provisions:
             13          This bill:
             14          .    increases the arbitration award limit for a party that submits a bodily injury claim
             15      to arbitration;
             16          .    provides that a claim submitted to arbitration is not subject to subrogation on the
             17      part of the underinsured motorist carrier;
             18          .    provides that a party that elects to proceed against a defendant through certain
             19      arbitration proceedings:
             20              .    waives the right to obtain a judgment against the personal assets of the
             21      defendant; and
             22              .    is limited only to recovery against available insurance coverage;
             23          .    amends the time limit that discovery must be completed within;
             24          .    provides that upon filing a notice requesting a trial de novo and unless otherwise
             25      stipulated to by the parties, an additional amount of time shall be allowed for
             26      discovery;
             27          .    amends the requirements to determine when the moving party in a trial de novo is
             28      responsible for the nonmoving party's costs;
             29          .    increases the limits on the award of certain costs in a trial de novo on an arbitration


             30      proceeding;
             31          .    increases the limits on a trial verdict in a trial de novo on an arbitration proceeding;
             32          .    provides that an interim committee designated by the Legislative Management
             33      Committee shall study the results of implementing arbitration in third party motor
             34      vehicle accident claims; and
             35          .     makes technical changes.
             36      Monies Appropriated in this Bill:
             37          None
             38      Other Special Clauses:
             39          None
             40      Utah Code Sections Affected:
             41      AMENDS:
             42          31A-22-321, as last amended by Laws of Utah 2008, Chapters 3, 162, and 221
             43      Uncodified Material Affected:
             44      ENACTS UNCODIFIED MATERIAL
             45     
             46      Be it enacted by the Legislature of the state of Utah:
             47          Section 1. Section 31A-22-321 is amended to read:
             48           31A-22-321. Use of arbitration in third party motor vehicle accident cases.
             49          (1) A person injured as a result of a motor vehicle accident may elect to submit all
             50      third party bodily injury claims to arbitration by filing a notice of the submission of the claim
             51      to binding arbitration in a district court if:
             52          (a) the claimant or the claimant's representative has:
             53          (i) previously and timely filed a complaint in a district court that includes a third party
             54      bodily injury claim; and
             55          (ii) filed a notice to submit the claim to arbitration within 14 days after the complaint
             56      has been answered; and
             57          (b) the notice required under Subsection (1)(a)(ii) is filed while the action under


             58      Subsection (1)(a)(i) is still pending.
             59          (2) (a) If a party submits a bodily injury claim to arbitration under Subsection (1), the
             60      party submitting the claim or the party's representative is limited to an arbitration award that
             61      does not exceed [$25,000] $50,000 in addition to any available personal injury protection
             62      benefits and any claim for property damage.
             63          (b) A claim for reimbursement of personal injury protection benefits is to be resolved
             64      between insurers as provided for in Subsection 31A-22-309 (6)(a)(ii).
             65          (c) A claim for property damage may not be made in an arbitration proceeding under
             66      Subsection (1) unless agreed upon by the parties in writing.
             67          (d) A party who elects to proceed against a defendant under this section:
             68          (i) waives the right to obtain a judgment against the personal assets of the defendant;
             69      and
             70          (ii) is limited to recovery only against available limits of insurance coverage.
             71          (e) (i) This section does not prevent a party from pursuing an underinsured motorist
             72      claim as set out in Section 31A-22-305.3 .
             73          (ii) An underinsured motorist claim described in Subsection (2)(e)(i) is not limited to
             74      the $50,000 limit described in Subsection (2)(a).
             75          (iii) There shall be no right of subrogation on the part of the underinsured motorist
             76      carrier for a claim submitted to arbitration under this section.
             77          (3) A claim for punitive damages may not be made in an arbitration proceeding under
             78      Subsection (1) or any subsequent proceeding, even if the claim is later resolved through a trial
             79      de novo under Subsection (11).
             80          (4) (a) A person who has elected arbitration under this section may rescind the
             81      person's election if the rescission is made within:
             82          (i) 90 days after the election to arbitrate; and
             83          (ii) no less than 30 days before any scheduled arbitration hearing.
             84          (b) A person seeking to rescind an election to arbitrate under this Subsection (4) shall:
             85          (i) file a notice of the rescission of the election to arbitrate with the district court in


             86      which the matter was filed; and
             87          (ii) send copies of the notice of the rescission of the election to arbitrate to all counsel
             88      of record to the action.
             89          (c) All discovery completed in anticipation of the arbitration hearing shall be available
             90      for use by the parties as allowed by the Utah Rules of Civil Procedure and Utah Rules of
             91      Evidence.
             92          (d) A party who has elected to arbitrate under this section and then rescinded the
             93      election to arbitrate under this Subsection (4) may not elect to arbitrate the claim under this
             94      section again.
             95          (5) (a) Unless otherwise agreed to by the parties or by order of the court, an arbitration
             96      process elected under this section is subject to Rule 26, Utah Rules of Civil Procedure.
             97          (b) Unless otherwise agreed to by the parties or ordered by the court, discovery shall
             98      be completed within 150 days after the date arbitration is elected under this section or the date
             99      the answer is filed, whichever is longer.
             100          (6) (a) Unless otherwise agreed to in writing by the parties, a claim that is submitted to
             101      arbitration under this section shall be resolved by a single arbitrator.
             102          (b) Unless otherwise agreed to by the parties or ordered by the court, all parties shall
             103      agree on the single arbitrator selected under Subsection (6)(a) within 90 days of the answer of
             104      the defendant.
             105          (c) If the parties are unable to agree on a single arbitrator as required under Subsection
             106      (6)(b), the parties shall select a panel of three arbitrators.
             107          (d) If the parties select a panel of three arbitrators under Subsection (6)(c):
             108          (i) each side shall select one arbitrator; and
             109          (ii) the arbitrators appointed under Subsection (6)(d)(i) shall select one additional
             110      arbitrator to be included in the panel.
             111          (7) Unless otherwise agreed to in writing:
             112          (a) each party shall pay an equal share of the fees and costs of the arbitrator selected
             113      under Subsection (6)(a); and


             114          (b) if an arbitration panel is selected under Subsection (6)(d):
             115          (i) each party shall pay the fees and costs of the arbitrator selected by that party's side;
             116      and
             117          (ii) each party shall pay an equal share of the fees and costs of the arbitrator selected
             118      under Subsection (6)(d)(ii).
             119          (8) Except as otherwise provided in this section and unless otherwise agreed to in
             120      writing by the parties, an arbitration proceeding conducted under this section shall be
             121      governed by Title 78B, Chapter 11, Utah Uniform Arbitration Act.
             122          (9) (a) Subject to the provisions of this section, the Utah Rules of Civil Procedure and
             123      Utah Rules of Evidence apply to the arbitration proceeding.
             124          (b) The Utah Rules of Civil Procedure and Utah Rules of Evidence shall be applied
             125      liberally with the intent of concluding the claim in a timely and cost-efficient manner.
             126          (c) Discovery shall be conducted in accordance with Rules 26 through 37 of the Utah
             127      Rules of Civil Procedure and shall be subject to the jurisdiction of the district court in which
             128      the matter is filed.
             129          (d) Dispositive motions shall be filed, heard, and decided by the district court prior to
             130      the arbitration proceeding in accordance with the court's scheduling order.
             131          (10) A written decision by a single arbitrator or by a majority of the arbitration panel
             132      shall constitute a final decision.
             133          (11) An arbitration award issued under this section shall be the final resolution of all
             134      bodily injury claims between the parties and may be reduced to judgment by the court upon
             135      motion and notice unless:
             136          (a) either party, within 20 days after service of the arbitration award:
             137          (i) files a notice requesting a trial de novo in the district court; and
             138          (ii) serves the nonmoving party with a copy of the notice requesting a trial de novo
             139      under Subsection (11)(a)(i); or
             140          (b) the arbitration award has been satisfied.
             141          (12) (a) Upon filing a notice requesting a trial de novo under Subsection (11)[,]:


             142          (i) unless otherwise stipulated to by the parties or ordered by the court, an additional
             143      90 days shall be allowed for further discovery;
             144          (ii) the additional discovery time under Subsection (12)(a)(i) shall run from the notice
             145      of appeal; and
             146          (iii) the claim shall proceed through litigation pursuant to the Utah Rules of Civil
             147      Procedure and Utah Rules of Evidence in the district court.
             148          (b) In accordance with Rule 38, Utah Rules of Civil Procedure, either party may
             149      request a jury trial with a request for trial de novo filed under Subsection (11)(a)(i).
             150          (13) (a) If the plaintiff, as the moving party in a trial de novo requested under
             151      Subsection (11), does not obtain a verdict that is at least $5,000 and is at least [35%] 30%
             152      greater than the arbitration award, the plaintiff is responsible for all of the nonmoving party's
             153      costs.
             154          (b) Except as provided in Subsection (13)(c), the costs under Subsection (13)(a) shall
             155      include:
             156          (i) any costs set forth in Rule 54(d), Utah Rules of Civil Procedure; and
             157          (ii) the costs of expert witnesses and depositions.
             158          (c) An award of costs under this Subsection (13) may not exceed [$4,000] $6,000.
             159          (14) (a) If a defendant, as the moving party in a trial de novo requested under
             160      Subsection (11), does not obtain a verdict that is at least [35%] 30% less than the arbitration
             161      award, the defendant is responsible for all of the nonmoving party's costs.
             162          (b) Except as provided in Subsection (14)(c), the costs under Subsection (14)(a) shall
             163      include:
             164          (i) any costs set forth in Rule 54(d), Utah Rules of Civil Procedure; and
             165          (ii) the costs of expert witnesses and depositions.
             166          (c) An award of costs under this Subsection (14) may not exceed [$4,000] $6,000.
             167          (15) For purposes of determining whether a party's verdict is greater or less than the
             168      arbitration award under Subsections (13) and (14), a court may not consider any recovery or
             169      other relief granted on a claim for damages if the claim for damages:


             170          (a) was not fully disclosed in writing prior to the arbitration proceeding; or
             171          (b) was not disclosed in response to discovery contrary to the Utah Rules of Civil
             172      Procedure.
             173          (16) If a district court determines, upon a motion of the nonmoving party, that the
             174      moving party's use of the trial de novo process was filed in bad faith as defined in Section
             175      78B-5-825 , the district court may award reasonable attorney fees to the nonmoving party.
             176          (17) Nothing in this section is intended to affect or prevent any first party claim from
             177      later being brought under any first party insurance policy under which the injured person is a
             178      covered person.
             179          (18) (a) If a defendant requests a trial de novo under Subsection (11), in no event can
             180      the total verdict at trial [may not] exceed [$40,000] $15,000 above any available limits of
             181      insurance coverage and in no event can the total verdict exceed $65,000.
             182          (b) If a plaintiff requests a trial de novo under Subsection (11), the verdict at trial may
             183      not exceed [$25,000] $50,000.
             184          (19) All arbitration awards issued under this section shall bear postjudgment interest
             185      pursuant to Section 15-1-4 .
             186          Section 2. Study.
             187          (1) During the 2012 interim, the Legislative Management Committee shall designate
             188      an appropriate interim committee of the Legislature to study the results of the use of
             189      arbitration in third party motor vehicle accident claims under Section 31A-22-321 .
             190          (2) The designated interim committee shall:
             191          (a) hear reports from persons impacted in using arbitration; and
             192          (b) consider any issues which need additional legislative remedies.


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