Ellison v. Safeguard Mut. Ins. Co.

• Decision Date: 12 April 1967
• Citation: 209 Pa.Super. 492,229 A.2d 482
• Parties: Sandra ELLISON, a Minor by her Husband Ernest Ellison v. SAFEGUARD MUTUAL INSURANCE COMPANY, Appellant.
• Court: Pennsylvania Superior Court

Page 482

229 A.2d 482

209 Pa.Super. 492

Sandra ELLISON, a Minor by her Husband Ernest Ellison v. SAFEGUARD MUTUAL INSURANCE COMPANY, Appellant.

Superior Court of Pennsylvania.

April 12, 1967.

Petition for Allowance of Appeal Denied June 28, 1967.

Malcolm H. Waldron, Jr., Philadelphia, for appellant.

Norman Shigon, Philadelphia, for appellee.

Before ERVIN, P.J., and WRIGHT, WATKINS, MONTGOMERY, JACOBS, HOFFMAN and SPAULDING, JJ.

MONTGOMERY, Judge.

This is an appeal from a judgment entered pursuant to the order of Judge Michael J. O'Donnell of the County Court of Philadelphia confirming an award of the American Arbitration Association and authorizing the entry of judgment in favor of the appellee-plaintiff. The appellant-defendant challenges the right of the plaintiff to compel arbitration and the jurisdiction of the County Court to confirm such an award.

On January 9, 1966, the minor plaintiff was involved in an automobile accident with an alleged uninsured motorist. The defendant, the insurer of Ernest Ellison, the plaintiff's husband, refused to pay the loss on the ground that the policy did not contain coverage for loss occasioned by an uninsured motorist. The effective date of this policy was January 7, 1966, two days before the accident.

The plaintiff then instituted arbitration proceedings before the American Arbitration Association and in submitting the dispute to arbitration relied on Section 1 of the Uninsured Motorist Coverage Act of August 14, 1963, P.L. 909, 40 P.S. § 2000, which provides that all motor vehicle liability insurance policies delivered or issued in Pennsylvania shall provide coverage for uninsured motor vehicles, unless expressly rejected in writing; and the regulations of the Insurance Department of Pennsylvania setting forth the standard form for such uninsured motorist coverage, Regulation 14, Chapter No. 1, Form No. 1. Paragraph eight of the Conditions to Form No. 1 requires arbitration in accordance with the American Arbitration Association rules when there is a dispute about whether a person is legally entitled to recover damages from the owner or operator of an uninsured automobile or there is a dispute as to the amount of payment under the uninsured motorist protection. ¹

The arbitration hearing at which the defendant failed to appear after timely notice resulted in an award for the plaintiff in the sum of $4,336.38. The plaintiff then filed a petition for confirmation of this award in the County Court of Philadelphia whereupon the court ordered a rule to show cause why the rule for confirmation of the arbitration award should not be made absolute, and in default of an answer by the defendant made the rule absolute on August 5, 1966. The defendant had indeed filed an answer on August 1, 1966, but due to an incorrect court number thereon it was not brought to the court's attention before the rule was made absolute. The defendant never requested the lower court to reconsider its order of August 5, 1966, in order to consider the misfiled answer. Instead, the defendant appealed to this Court.

Regulation 14 as issued by the Insurance Department implements the Act of 1963 requirement that all uninsured motorist coverage be written under provisions approved by the Insurance Commissioner. Section 2 to Regulation 14 in fact states that, 'This Regulation is issued for the purpose of establishing provisions that will be acceptable to the Insurance Commissioner in compliance with the above Act * * *' This regulation also states, 'The extent of the coverage which shall be offered as 'Uninsured Motorists Coverage' shall be at least that coverage contained in Form No. 1, attached hereto and incorporated herein by reference, which is the national standard form for this insurance * * *.'

We can find no legislative intent or judicial rule which supports the interpretation placed on this insurance by the plaintiff so as to require the arbitration clause of Form 1 to be incorporated into this insurance contract. In fact, the rule is to the contrary and requires that standard insurance form provisions be manifested by statute if they are to be incorporated by law into a certain type of insurance contract. In O'Neil v. Am. Fire Ins. Co., 166 Pa. 72, 30 A. 943, 26 L.R.A. 715 (1895), the legislature by the Act of April 16, 1891, P.L. 22, delegated to the Insurance Commissioner the duty to prepare a standard fire insurance policy which when completed would be incorporated into all contracts of insurance made on property within Pennsylvania. Our Supreme Court held that this was an unlawful delegation of power because the act did not fix terms and conditions of the policy, the use of which it commanded, saying, 166 Pa. 72 at 77, 30 A. at 944. 'The effect of our cases is to settle firmly the rule that the law must be complete in all its terms and provisions when it leaves the legislative branch of the government, and that nothing must be submitted to the judgment of the electors, or other appointee of the legislature, except an option to become, or not to become, subject to its requirements and penalties. * * *' ²

We hold that the compulsory arbitration provisions of Form No. 1 were not part of the insurance contract between the parties. To do...