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A Monroe County trial judge has rejected an insurer's argument that delay damages cannot be applied to a jury award on an underinsured motorist claim, but agreed with the company that they must be calculated on the policy limits rather than the full amount of the verdict.

In Kanyuck v. Hamilton, Monroe County Court of Common Pleas Judge David Williamson granted defendant Progressive Northern Insurance Co.'s post-trial motions to mold a $1.05 million UIM jury verdict to the policy limit of $325,000, but awarded the plaintiffs delay damages in the amount of about $19,382.

"We find delay damages on a UIM claim submitted to a jury for a verdict are recoverable," Williamson wrote in a March 4 opinion. "To do otherwise, would give insurance companies no incentive to settle UIM claims other than for less than the policy limits, even where, as here, there was potential for a verdict well in excess of policy limits."

Williamson said that even though the UIM claim was a contract action, it was one with recovery under tort principles.

"The plaintiff must still prove negligence, causation and damages at trial as to the tortfeasor," Williamson explained. "The damages recoverable at trial are the same that the plaintiff seeks from the tortfeasor. For this reason, Pa.R.C.P. 238 was clearly intended to apply to UM and UIM claims. Here, a demand was made for policy limits, Progressive offered substantially less, and following a trial, plaintiff was awarded a great deal more. As such, delay damages are due."

Plaintiff Stanley Kanyuck had argued that the delay damages should be calculated based on the jury verdict, which after a $250,000 tortfeasor credit, was reduced to $800,000.

But Williamson, pointing to the Pennsylvania Supreme Court's 2012 ruling in Marlette v. State Farm that delay damages in uninsured motorist cases are calculated to the UM policy limits, said UIM delay damages must be applied the same way.

"Plaintiff submitted a claim for delay damages from January 16, 2019, until date of verdict, which was 328 days at 6.5% on the policy limit of $325,000," Williamson said. "This calculation comes to $18,983.56. Plaintiff is also entitled to court costs of $398.35 for total delay damages of $19,381.91."

Williamson also rejected Kanyuck's argument that the verdict should not be molded to the policy limit, noting that Progressive clearly stated in its policy that the $325,000 policy limit was "'the most we will pay.'"

"That is a contractual cap," Williamson said.

Counsel for the plaintiffs, Thomas Foley III of the Foley Law Firm, said in an email, "On March 17, 2020, we filed an appeal to the Pennsylvania Superior Court, and we expect to fully vindicate our client Stanley Kanyuck's right to the entirety of the $1,050,000 in damages determined to be due him by the unanimous jury in its verdict of December 10, 2019. We also expect to obtain additional delay damages as calculated in light of the jury's verdict."

Counsel for the defense, G. Christopher Parrish of Forry Ullman, could not be reached for comment.