Cassidy v. Keystone Ins. Co.
| Decision Date | 09 December 1983 |
| Docket Number | 625. |
| Citation | 322 Pa.Super. 168,469 A.2d 236 |
| Parties | John J. CASSIDY v. KEYSTONE INSURANCE COMPANY, Appellant. |
| Court | Pennsylvania Superior Court |
Argued March 2, 1983.
Dean B. Stewart, Jr., Norristown, for appellant.
Bernard V. Digiacomo, Norristown, for appellee.
Before CERCONE, President Judge, and CAVANAUGH, and WIEAND, JJ.
Appellant Keystone Insurance Company, takes this appeal from the lower court's denial of appellant's petition to strike the award of arbitrators, and the granting of appellee's petition to confirm said award and from the judgment entered thereon. Appellant argues, inter alia, that the court erred in granting appellee's earlier petition to appoint an arbitrator where that petition was not properly served upon appellant. We find appellant's argument to have merit and we hereby vacate judgment and reverse the order or the lower court confirming the award of arbitrators.
On or around July 7, 1980, appellee, John Cassidy, was injured in an automobile accident in Dade County, Florida. The operator of the other vehicle involved in the accident fled the scene and is unknown. At the time of the accident, appellee was insured by appellant--company. In due course, appellee retained counsel, and on March 18, 1981, counsel wrote a letter to appellant--company, which, in relevant part, said:
Since more than eight months have already elapsed from the time of the accident, and since I am advised that you are in receipt of medical specials to date all in excess of $10,000.00, and since your policy coverage is in the sum of $15,000.00, I would think that a cursory review or your file should conclude in your offering us the $15,000.00 without the necessity of going into arbitration. In that regard, I am advising that we would withhold from proceeding in arbitration but only for a period of two weeks; in the event that you do not make the full offer of $15,000.00 in that time, I am herewith advising that I have selected as our arbitrator in this matter, David S. Katz, Esquire, 275 Commerce Drive, Fort Washington, Pa., and I am further advising that you are to, in the event of non-amicable settlement, supply me and/or Mr. Katz of your selection of an arbitrator by no later than April 3 1981.
If the matter has not concluded and you have not selected an arbitrator as above set forth, I am herewith advising that I will promptly file the Petition for the Appointment of an Arbitrator in the Court of Common Pleas of Montgomery County, Pennsylvania, a sample copy of which is enclosed for your file.
Appellant did not respond to this letter, whereupon, on May 22, 1981 appellee filed a petition for appointment of arbitrator. A copy of this petition was not served upon appellant in advance of the hearing on the matter. Nevertheless, the court granted appellee's petition and appointed an arbitrator in appellant's stead. Appellee, on that same day, sent appellant a certified letter advising appellant of the appointment and enclosing a copy of the petition and order. [1] Again, appellant did not respond. Thereafter, on June 3, 1981, one of the arbitrators sent a letter to both parties advising them of the date and time scheduled for the arbitration, the date being June 17, 1981. The next day, June 4, 1981, appellee sent appellant a letter in which appellee reiterated the date of the arbitration and listed the various medical bills which appellee intended to present. The morning of the arbitration hearing, counsel for appellant appeared and requested a continuance. This request was denied and the hearing proceeded, however counsel for appellant declined to participate. The arbitrators award was in favor of appellee. The next day, appellant filed a petition to strike the award of the arbitrators and to strike the order of the court of May 22, 1981, in which the court appointed an arbitrator on appellee's petition. Appellant argued, then, as now, that the filing of the petition to appoint an arbitrator was procedurally defective because the petition was not properly served on appellant. We agree.
A procedurally similar issue was decided by this Court in Keystone Wire & Iron Works, Inc. v. Van Cor, Inc., 245 Pa.Superior Ct. 537, 369 A.2d 758 (1976). In Keystone Wire, we were asked to interpret an earlier version of the Uniform Arbitration Act. [2] Specifically, our attention was focused on sections 3 and 4 of the Act. Section 3 at that time provided:
The party aggrieved by the alleged failure, neglect, or refusal of another to perform under a written agreement for arbitration, may petition the Court of Common Pleas of the county having jurisdiction for an order to show cause why such arbitration should not proceed in the manner provided for in such agreement. Five days' notice in writing of such application shall be served upon the party in default. Service thereof shall be made in the manner provided by law for the service of a summons. The court shall hear and determine the matter upon the petition and answer and depositions, or after hearing of the parties in open court, as the court may determine; and the court upon being satisfied that the making of the agreement for arbitration or the failure to comply therewith is not at issue, the court shall make an order directing the parties to proceed to arbitration in accordance with the terms of the agreement. If the making of the arbitration agreement, or the failure, neglect, or refusal to perform the same, be at issue, the court shall proceed to the trial thereof.... (Emphasis supplied).
Section 4 of the same Act read:
If in the agreement provision be made for a method of naming or appointing arbitrators or an umpire, such method shall be followed, but ... if a method be provided and any party thereto shall fail to avail himself of such method, ... the court shall designate and appoint arbitrators, or an umpire, as the case may require, who shall act under the said agreement with the same force and effect as if he or they had been specifically named therein, ...."
The facts in Keystone Wire were to very much like those in the case now before us. In Keystone Wire, the plaintiff filed a petition with the court alleging that it had notified counsel for the defendant of the former's appointment of an arbitrator but that defendant had refused to fulfill its contraction obligation to name an arbitrator and plaintiff asked the court to name one in defendant's stead. Plaintiff mailed a copy of the petition to defendant, and defendant argued to the court that such service was improper. The lower court denied defendant's objection. On appeal, plaintiff argued that because section 4 of the Act made no provision for service, plaintiff was free to adopt any method of service. We rejected the plaintiff's argument with these words:
The failure of the legislature to specify a method by which an allegedly defaulting party is to be notified of the pendency of a petition for appointment of arbitrators should not be construed to authorize either an ex parte proceeding or one conducted by informal notice. The right to name an arbitrator is a valuable one, and we should not permit it to be forfeited without proper notice and an opportunity to defend. Furthermore, our Supreme Court has repeatedly held that the rules relating to service of process must be strictly followed, and jurisdiction of the court over the person of a party is dependent upon proper service being made. Thus, not only is service of process in accordance with the Rules of Civil Procedure necessary to give a party notice of the pendency of an action, it is essential to the jurisdiction of the court over the person. Id. at 541, 369 A.2d at 759-760. (citation omitted) (footnotes omitted) (emphasis added.)
Regarding Rule 233, we wrote:
Rule 233 Pa.R.C.P., clearly contemplates that service of petitions and rules may be accomplished without sheriff's service only after the action has been commenced pursuant to Rule 1007, Pa.R.C.P. Ordinarily, the jurisdiction of the court may not be invoked by petition and rule to show cause. Cooney v. Pennsylvania Osteopathic Association, 434 Pa. 358, 253 A.2d 256 (1969); Commonwealth v. Dauphin County, 354 Pa. 556, 47 A.2d 807 (1946); Section 3 of the Uniform Arbitration Act,...
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