Allstate forced to pay seven-figure PIP claim over technical objections

Jerome Crutcher-Bey suffered a catastrophic head injury while a passenger in a motor vehicle collision in 2003.  His Personal Injury Protection (PIP) claim for medical expenses was assigned to the Auto Club (ACIA), which paid out over one million dollars.  The ACIA then sought reimbursement from Citizens, the owner of the car, and Allstate, the insurer of the injured boy's brother.  With agreement of the parties, the trial court conducted an evidentiary hearing to determine whether Crutcher-Bey was actually domiciled with his brother in the Allstate-insured household.  The judge concluded that he was, and held Allstate responsible for the medical expenses paid by the Auto Club.

Allstate appealed, as is its nature, arguing a number of technicalities, all of which were struck down.  Allstate argued that the one-year back rule should limit ACIA's recovery to the expenses incurred within 12 months of ACIA filing suit, however, the Court noted that insurers assigned to pay PIP benefits under the assigned-claims plan (unlike injured victims or "volunteer" insurers) have two years in which to sue for reimbursement.

Allstate also argued that it had been denied its right to a jury trial, even though it had agreed to conduct the evidentiary hearing to decide domicile, had fully participated in that hearing, and had voiced no objection to that procedure at the time.  The Court held that Allstate had waived its right to complain about the judge deciding the issue of domicile because it failed to raise a timely objection. 

Allstate--or any litigant--is not allowed to gamble on a favorable outcome and then complain about the procedure if it loses:  while many insurers have incorporated just such a procedure into their insurance policies in the form of an arbitration agreement that is binding only if the insured loses, the courts, at least as of today, don't operate that way.