Expert: Paul D. Friedman, M.A., Ph.D., J.D. - 11/13/2009

Question
Hello again Paul!  

What I am about to write is the “least” of the problems with my mediation turned “binding arbitration”, by what form of magic I’m not certain.

Firstly, I was totally blindsided when I received the mediator’s letter stating “the matter was converted to a binding arbitration”.  I was offered neither the time nor the opportunity to bring expert witnesses or present or discuss the case in any manner or detail.  Yet, the mediator, if you read his statement about the “Economic Damages” (see below), certainly took on the role of Judge and Jury, aka “Arbitrator”.

Shortly after I wrote you in April I received a letter from the mediator stating the insurance company had agreed to my offer of compromise, or so I thought!  I was awarded “Economic Damages” and “Non-Economic Damages” under my UIM coverage; however, to date the insurance company has failed to pony up the “Economic Damages”.  Here is the wording from the “Arbitration Award”, verbatim:

ECOMONIC DAMAGE
“Based upon the findings related to the 2006 surgery, I specifically disallow $68,991.53 for the cost of that procedure as it is clearly unrelated to the motor vehicle accident.  I find the total remaining economic damage paid by claimant, Medicare, and Blue Cross to be in the amount of $25,000.”

NON-ECONOMIC DAMAGE
“Claimant makes a compelling case for drastic change in his life since the motor vehicle accident.  He is unable to sleep for more that brief episodes and his mobility has become limited, restricting him in all activities.  In short, his ability to enjoy life has been drastically affected.  I find the claimant suffered damages in the amount of $200,000.   Respondent is entitled to a credit of $25,000 so the award is $175,000 in “new money”.

In June the insurance company sent my attorney $125,000 (the other item in dispute) for my “Non-Economic” damages, but nothing for my “Economic” damages.  I waited until fall, expecting more payments, but none ever came.  Medicare reimbursement was settled in September and shortly afterwards my attorney made the “final” disbursements.

On October 1st I wrote a letter to my attorney about the $25,000 “Economic” damages (and $50,000 shortage) and requested that he forward copies of my letter to the insurance company, their attorney and the arbitrator.  In part, here is what I stated:

“In addition to my “non-economic damages” of $175,000, he (the arbitrator) states that I suffered “economic damages” in the amount of $25,000, why has State Farm not yet compensated me for that?  If I am not to be compensated, then why am I obligated to reimburse Medicare and my other medical providers?”

So far only the arbitrator has responded, and that was a “non-answer”; here is what he stated:

Dear Mr xxxxx:

“This will serve to acknowledge receipt of your letter of October 6, 2009 and Mr. xxxxxx’s letter of October 1, 2009.  I do not have Mr. xxxxxxx’s address.”

“It would be inappropriate for me to respond to Mr. xxxxxxx’s letter as I did not represent him.  I have very little specific recollection of the matter as my file was destroyed in June.”

(You would think that for a "$3,500 fee", he could afford a filing cabinet!)

Neither had my attorney ever questioned the $25,000 until I brought it up, and then I had to force the issue by putting it in writing.  His practice is over two-thirds mediation/arbitration and I would bet the largest chunk is with State Farm.

QUESTION:  Should I seek further advice from the California Bar Association?  From the California Insurance Commissioner?


Answer
From the facts you presented, it appears your lawyer did not competently handle the matter and you should address it with your counsel and then with the California Bar.  You may also wish to speak with a legal malpractice attorney in your area to determine your rights.