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The Court of Appeals of Arizona upheld the dismissal of an impermissible collateral attack on an arbitration award, which awarded an injured motorist an amount of underinsured motorist insurance (UIM) benefits offset by workers’ compensation benefits.
In Cundiff v. State Farm Mutual Automobile Ins. Co., No. 2 CA-CV 2005-0209, 2006 WL 3042829 (Ariz. Ct. App. Oct. 27, 2006), Cundiff, a former police officer, was injured when her vehicle was struck from behind by an underinsured motorist. Since the other driver’s insurance policy was capped at $15,000, Cundiff sought payment of her $25,000 UIM benefits through insurer State Farm. State Farm refused to pay, since it believed it was entitled to offset workers’ compensation benefits against Cundiff’s UIM coverage.
Cundiff requested arbitration and was awarded $40,000 as “full compensation” for her claim. Later, Cundiff brought suit to recover additional UIM benefits, and the trial court awarded her $11,109.04. On appeal, State Farm contended that the trial court’s ruling was an impermissible collateral attack on an arbitration award.
The Court sided with State Farm and reversed the grant of summary judgment in favor of Cundiff. Noting that “an arbitrator’s decision on questions of fact and law is generally final,” the Court found the arbitrator’s award to be a complete decision regarding the disagreement over coverage. Steer v. Eggleston, 47 P.3d 1161, 1164 (Ariz. Ct. App. 2002).
There was nothing in the award suggesting that the parties had a further right to litigate something other than Cundiff’s “full damages.” Thus, the Court upheld the arbitrator’s award, and reversed the trial court’s attempt to disturb it.
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