Boyce v. St. Paul Property and Liability Ins. Co.

• Decision Date: 29 January 1993
• Citation: 421 Pa.Super. 582,618 A.2d 962
• Parties: Andrea BOYCE and Brian Boyce v. ST. PAUL PROPERTY AND LIABILITY INSURANCE CO., Appellant.
• Court: Pennsylvania Superior Court

Page 962

618 A.2d 962

421 Pa.Super. 582

Andrea BOYCE and Brian Boyce v. ST. PAUL PROPERTY AND LIABILITY INSURANCE CO., Appellant.

Superior Court of Pennsylvania.

Argued Oct. 21, 1992.

Filed Nov. 19, 1992.

Reargument Denied Jan. 29, 1993.

James C. Haggerty, Philadelphia, for St. Paul Property and Liability Ins. Co.

Michael W. McCarrin, Media, for Andrea and Brian Boyce.

Before CIRILLO, MONTEMURO and TAMILIA, JJ.

MONTEMURO, Judge:

Appellant St. Paul Property & Liability Insurance Company appeals from a final order, denying its petition to vacate and/or modify an amended arbitration award of one million dollars in favor of Appellee Boyce. Boyce crossappeals from the same order. For the reasons stated below, we affirm.

Appellee, Andrea Boyce, initiated the present action, seeking to recover uninsured motorist benefits for injuries she sustained in a February 3, 1986 motor vehicle accident which occurred in Philadelphia. At the time of the accident, Boyce was a passenger in an ambulance owned and operated by Paramedical Ambulance Service, Inc. and insured by St. Paul. She was monitoring a sick neonate child being transported to Philadelphia College of Osteopathic Hospital ("PCOM"), where she was head neonate and pediatric nurse. She did not work for the ambulance company. PCOM had contracted with Paramedical to perform the transport.

The accident occurred when an uninsured motorist, Louis Pocco, struck the ambulance broadside. The impact of the collision threw Boyce into the doors of the ambulance, striking her head, neck, shoulders and back. Immediately after impact, the ambulance driver saw Boyce lying in a prone position on the floor of the ambulance. A second ambulance transported her to PCOM, where she was treated for a concussion and sent home. After experiencing increased dizziness, nausea, and pain, Boyce was hospitalized. She was subsequently released, but continues to suffer from the permanent damages received.

Following the accident, Boyce instituted an action in the Court of Common Pleas of Philadelphia County, seeking recovery of damages in tort. Named defendants included Paramedical, the ambulance driver, and Pocco. ¹ In addition, she made demand upon St. Paul for recovery of uninsured motorist benefits.

Paramedical's insurance policy stated that all disputes regarding uninsured motorist benefits were to be resolved by arbitration upon written demand by either party. After St. Paul refused to pay the uninsured motorist claim, Boyce demanded arbitration in Philadelphia County and named Philadelphia attorney, Mayer Horowitz, as her arbitrator. When St. Paul refused to name an arbitrator, Boyce filed a petition in Philadelphia Common Pleas Court for appointment of the defense and neutral arbitrators. Immediately thereafter, St. Paul chose a Philadelphia attorney, Robert Coleman, as its arbitrator, and obtained an order, compelling Boyce to submit to a physical examination by an ENT specialist.

Boyce subsequently objected to Coleman's appointment, since his firm represented St. Paul. St. Paul then withdrew Coleman and appointed James Palmer, a Bucks County attorney.

In addition, St. Paul requested arbitration in Bucks County. St. Paul argued that both the policy and Pennsylvania Uniform Arbitration Act required arbitration in the county in which the protected person/Boyce lives. At the time of the accident, Boyce resided in Delaware County. During pendency of the uninsured motorist claim, she lived in Bucks County. At the time of the arbitration hearing, she was a resident of California. Since the parties could not agree on a neutral arbitrator, Boyce next filed an amended petition in Philadelphia Common Pleas Court, asking the court to appoint the arbitrator. On June 21, 1990, the court appointed a Philadelphia attorney, Melvin Greenberg, as chairman of the arbitration panel, and ordered that the arbitration hearing take place in Philadelphia, in accordance with common law. ²

The arbitration hearing was held in Philadelphia on September 27, 1990, September 28, 1990, October 18, 1990 and November 24, 1990. During the hearing, St. Paul stipulated that Pocco was uninsured and that he was the substantial cause of the accident. The panel determined that the insurance policy provided $1,000,000 in uninsured motorist coverage. On December 20, 1990, the arbitrators entered an award in favor of Andrea Boyce in the amount of $1,393,500, and awarded her husband, Brian Boyce, $90,000.

On July 8, 1991, the trial court vacated the award since it exceeded the $1,000,000 policy limit. The court ordered that a rehearing be held for the purpose of re-assessing damages. On October 18, 1991, the arbitration panel reduced Boyce's award to $1,000,000 and her husband's award to zero. Thereafter, St. Paul sought to have the amended arbitration award vacated. When its petition to vacate and/or modify was denied, it filed this appeal.

The first issue raised by appellant is that the Philadelphia Court of Common Pleas and the Philadelphia arbitrators had no authority to hear the present action in Philadelphia County. The insurance contract in question provided that arbitration was to take place in the "county where the protected person lives." The protected person in the instant action, appellee, lived in Delaware County at the time of the accident, Bucks County at the initiation of the arbitration dispute and subsequently in Los Angeles County, California. Although appellant correctly asserts that under the insurance contract the correct venue for the arbitration should have been in one of these towns, appellant has failed to preserve this issue for our review.

In Clark v. State Farm Auto Insurance, 410 Pa.Super. 300, 599 A.2d 1001 (1991), this court refused to review a challenge to venue in a similar case involving a petition to compel arbitration. In refusing to review the claim, we stated:

A petition to compel arbitration is the functional equivalent of of a complaint. The proper way to challenge venue in a civil action is through a preliminary objection. Pa.R.C.P. Rule 1006 provides in pertinent part:

(e) Improper venue shall be raised by preliminary objection and if not so raised shall be waived ...

Instead of first filing a preliminary objection to challenge venue, appellant proceeded directly to its responsive pleadings. The failure to file appropriate preliminary objections to contest improper venue results in waiver of the challenge.

Id. at 311, 599 A.2d 1001, 1006 (1991). We find this case to be indistinguishable from the Clark case, and therefore find that appellant has waived this issue.

Appellant's second and fourth argument on appeal is that the arbitrators exceeded their authority in entering an amended arbitration award without a re-hearing as ordered by the trial court. In its July 8 order vacating the arbitration award, Judge Cohen ordered that a rehearing be conducted for the purpose of reassessing damages. Appellant alleges that since the arbitrators entered an amended award without conducting a full hearing, they were denied their due process rights to such a hearing. We disagree. The trial court stated that the reason the original award was being vacated was because the arbitrators granted an award in excess of the policy limits. The arbitration panel had already conducted a full hearing on the issue of damages. They heard four days of testimony from both the appellees and the appellants. Appellants clearly had every opportunity to present all of their evidence and were awarded their right to a full and fair hearing. The arbitration panel was not required to conduct another full blown hearing regarding appellee's damages in order to come up with an amended award. It already had all of the evidence presented to it, and was fully capable of determining an appropriate award without the unnecessary burden of another full blown hearing. Accordingly, we find appellant's contention to be without merit. Appellant's next issue is that the the original arbitration panel could not fairly and justly re-assess damages in the present matter. More specifically, appellant avers that Judge Cohen, when he ordered that the first arbitration award be vacated, should have ordered a hearing before a new panel because the original panel could not fairly reassess damages. We disagree.

Section 7314 Of the Uniform Arbitration Act provides that if the court vacates an arbitration award, the court may order a rehearing before the arbitrators who made the award, unless the award is vacated on grounds affecting the competency of the arbitrators. 42 Pa.C.S.A. § 7314(c). In the instant case, the original award was not vacated because of any incompetency of the arbitrators, but rather was vacated because the award exceeded the limits of the policy. This had nothing to do with the competency of the arbitrators, and therefore, the court did not err in ordering the same arbitrators to enter a new award. Furthermore, we do not agree with appellant's assertion that the arbitrators were partial to appellee. There is simply no evidence to support this assertion, and thus the order should not be vacated.

Appellant's next assertion is that the arbitration hearing was improperly conducted under common law. Although the trial judge initially labeled this as a common law arbitration matter, before it reviewed the arbitration award it correctly stated that, according to the terms of the insurance contract, this case was to be conducted under the Uniform Arbitration Act. Thus, the court properly reviewed the award according to the provisions in the Act. As the trial court noted, the type of arbitration, i.e., common law or statutory, only governs the scope of review on appeal, any error resulting from the court's initial determination that the arbitration should proceed under common law arbitration was rendered inconsequential by the court's review of the award in accordance with the rules of statutory arbitration. Additio...