DATE: Sunday, September 21, 1997            TAG: 9709210072

SECTION: LOCAL                   PAGE: B5   EDITION: FINAL

SOURCE: ASSOCIATED PRESS 

DATELINE: MANCHESTER, VT.                   LENGTH:   47 lines

COURT REVERSES AWARD TO NORFOLK PEDESTRIAN

A federal appeals court has reversed a jury verdict that awarded $2.4 million to a woman from Norfolk who suffered brain damage after she was hit by a car.

The 2nd U.S. Circuit Court of Appeals ruled Wednesday that Liberty Mutual Insurance Co. was not liable for the award because the victim, who was a pedestrian at the time of the accident, did not qualify as an insured person under her rental car's policy.

Marian Canedy was crossing Route 7A near the Anne Klein outlet in June 1991 when she was struck by a car traveling about 20 mph. The car was driven by Arlene Litwack, 51, of New York.

Canedy's head shattered the car's windshield. The former teacher, now 47, lost mental skills and some of her peripheral vision.

Litwack's insurance company paid Canedy a $100,000 settlement, the maximum allowed under her policy. Canedy then turned to Liberty Mutual, which insured a rental car she had been driving on the day she was injured.

Citing the rental car's underinsured-motorist coverage, Canedy claimed that even though she was a pedestrian at the time of the accident, Liberty Mutual was liable for the rest of the damages due her. A U.S. District Court jury in Rutland agreed last year, awarding Canedy $2.4 million.

But the 2nd Circuit reversed the verdict, noting that Canedy was walking at the time of the accident rather than driving or occupying the rental car.

``Plaintiff cannot show that she meets any of the definitions of `an insured,' '' under the Liberty Mutual policy, the court wrote. ``Hence, by its terms, the policy exclude's plaintiff from UIM coverage.''

Burlington attorney Daniel Burchard, who represented Liberty Mutual, hailed the decision. ``I'm really happy with the result,'' said Burchard, who claimed that rental car rates would have risen if the jury award were allowed to stand. ``We did not want to take this case to trial.''

Canedy's attorney, Patrick Winburn of Manchester, called the court's reversal both a painful loss for his client and a setback for consumers.

``People don't understand what they're buying when they buy insurance,'' he said. ``They think they're covered, but they're not. The insurance companies know. They write these confusing polices.''

Canedy's only recourse is to appeal to the U.S. Supreme Court. Although that remains possible, Winburn said, ``I don't think it's realistic.'' KEYWORDS: LAWSUIT ACCIDENT TRAFFIC INJURIES

RULING

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