Cengage Advantage Books: Law for Business 18th Edition by John Ashcroft ,Janet Ashcroft

Exercise 32

An underinsured driver injured Sandell and Alan Mostow. They requested arbitration under the underinsured motorist provisions of their policy written by State Farm. Those provisions set limits of "$100,000 each person, $300,000 each accident." "Each Person" meant coverage for bodily injury to one person. "Each Accident" meant "the total amount... for all damages due to bodily injury to two or more persons in the same accident." Arbitrators awarded Sandell $190,000 and Alan $100,000. State Farm argued that the $300,000 limit was subject to the $100,000 per person limit, so neither could receive more than $100,000. The Mostows argued that $100,000 was the limit if one person were injured, but when two or more were injured, $300,000 was the limit. How should the court decide? [ Mostow v. State Farm Ins. Companies , 645 N.Y.S.2d 421 (N. Y.)]