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Nelson v. Allstate Insurance Co.

May 18, 2000

JOSEPH NELSON, III, APPELLANT
V.
ALLSTATE INSURANCE COMPANY, APPELLEE



Before Terry and Farrell, Associate Judges, and Belson, Senior Judge.

The opinion of the court was delivered by: Terry, Associate Judge

Appeal from the Superior Court of the District of Columbia (Hon. Joan Zeldon, Trial Judge)

(Submitted June 8, 1999 Decided May 18, 2000)

This appeal arises from a breach of contract action filed by Joseph Nelson against Allstate Insurance Company. Nelson contends that the trial court erred in permitting Allstate to raise a new defense on the morning of trial, contrary to the terms of the pretrial order, and in granting Allstate's post-verdict motion to amend the judgment. Finding no abuse of discretion and no legal error, we affirm.

I.

On November 24, 1994, Nelson was driving an ambulance owned by the District of Columbia when it was struck by a car driven by an uninsured motorist named John Henry Lewis. Nelson was insured under a policy issued by Allstate which included coverage for injuries resulting from accidents involving uninsured motorists, as well as injuries incurred while the insured person was driving a motor vehicle owned by a third party, provided that the insured person was not driving a vehicle which was "furnished for the regular use of [the insured person] or any resident relative." In a section captioned "Limits of Liability," the insurance contract also stated:

Damages payable will be reduced by . . . all amounts payable under any workers compensation law, disability benefits law, or similar law, Automobile Medical Payments, or any similar automobile medical payments coverage.

Coverage for bodily injuries caused by uninsured motorists was capped at $50,000 per insured person.

About nine months after the accident, Nelson filed suit against both Lewis and Allstate, claiming that Lewis was negligent and that Allstate breached the insurance contract by refusing to make payment as required by the uninsured motorist provision. Nelson asked for money damages in the amount of $200,000 from each defendant. *fn1

In its answer to Nelson's complaint, Allstate asserted that Nelson's claim was not covered by the policy because he was driving an ambulance owned by the District of Columbia government at the time of the accident, and because the policy did not provide uninsured motorist coverage when the policyholder was "driving a motor vehicle provided by another for his regular use." In the joint pretrial statement, which the court adopted as its pretrial order, Allstate declared its intention to introduce "[t]he applicable Allstate Insurance Company policy" as an exhibit at trial.

On the morning of trial, the court asked counsel for Allstate, "What is your defense? I need to understand it so I can explain it to the jury." Allstate's attorney responded that the defense would be that "[a]n uninsured motorist policy with Allstate does not cover non-owned vehicles regularly provided for the use of another." Shortly thereafter, however, Allstate raised for the first time the issue of an offset for workers' compensation benefits. Nelson's attorney objected, arguing that this was a defense that should have been raised at the pretrial stage. The court ruled that because Nelson was "not entitled to recover more than he has a right to recover under the contract Allstate gave him," it would let the jury determine the total amount of damages to which Nelson was entitled, and then reduce the award by any amount that Nelson had received in workers' compensation benefits. Allstate did not object to this proposal. Nelson's counsel continued to object on the ground that the matter should have been raised earlier. He also complained that there was "no present evidence of what has been paid and what hasn't," but he conceded that Nelson "would not have a right to recover more than the limits of the coverage."

In its verdict the jury found Allstate liable under the policy because the ambulance Nelson was driving on the day of the accident was not furnished for his regular use. It awarded him $12,200 for medical expenses, $30,000 for lost wages up to the time of the trial, and $30,000 for pain and suffering, a total of $72,200.

After hearing the jury's verdict, the trial court said, "I believe that concludes the matter." When counsel for Allstate interjected to remind the court that "we agreed we were going to offset the verdict in according [sic] to the contract," the court responded by asking counsel to file a motion requesting the offset. Nelson's attorney pointed out that the only evidence in the record of any workers' compensation benefits received by Nelson was a $5,892 payment to one of his doctors, whereupon counsel for Allstate asserted that Nelson had also received benefits for lost wages. The court replied:

Then you need to file a motion because if he has received money from workmen's comp and the contract is explicitly exclusive, then it would be appropriate for me to offset it. Otherwise, it doesn't make sense. And if you didn't raise that with me and therefore I didn't address it, then you ...


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