Fisher v. USAA Cas. Ins. Co.
| Decision Date | 30 April 1991 |
| Docket Number | Civ. A. No. 90-2602. |
| Citation | 778 F. Supp. 232 |
| Parties | Eugene A. FISHER, Administrator of the Estate of Julie Lynn Fisher, Deceased, Plaintiff, v. USAA CASUALTY INSURANCE COMPANY, Defendant. |
| Court | U.S. District Court — Eastern District of Pennsylvania |
Richard J. Orloski, Orloski & Hinga, Allentown, Pa., for plaintiff.
William E. Schantz, Allentown, Pa., for defendant.
This declaratory judgment action raises many issues concerning the rights of the parties under an insurance policy issued to Julie Lynn Fisher before her death in an automobile accident. The defendant and plaintiff have each filed motions for summary judgment. For the reasons stated below, I grant defendant's motion for summary judgment and deny plaintiff's motion for summary judgment.
None of the facts concerning the underlying accident are in dispute. On the morning of October 13, 1986 Julie Lynn Fisher was driving her car on U.S. Route 22 in Lehigh County, Pennsylvania, when she was in an accident. Her car was hit from behind by a tractor trailer which propelled her into a stationary tractor trailer. She died that morning. Eugene A. Fisher was granted Letters of Administration by the Register of Wills, Lehigh County, to administer the Estate of his daughter, Julie Lynn Fisher.
Several months after the accident, Eugene A. Fisher filed two civil actions in the United States District Court for the Eastern District of Pennsylvania. The first action named the driver of the tractor trailer that struck Ms. Fisher's car and his employer as defendants. See Eugene A. Fisher, Administrator of the Estate of Julie Lynn Fisher, Deceased v. L. & W. Transportation, Inc., No. 86-7109. The second action named the owner of the tractor trailer as a defendant. See Eugene Fisher, Administrator of the Estate of Julie Lynn Fisher, Deceased v. Unzicker Trucking, Inc., No. 87-2655. These actions were consolidated.
On December 7, 1987 the plaintiff executed a release and settlement agreement with the defendants in the consolidated action. In consideration for a payment of one million dollars to the estate of Julie Lynn Fisher, plaintiff released these defendants from all claims. See Plaintiff Exhibit B.
At the time of the fatal accident, the defendant in the action now before me had issued one insurance policy directly to Julie Lynn Fisher, as the insured and operator, providing, inter alia, underinsured motorist coverage in the amount of one hundred thousand dollars for each person and a total of three hundred thousand dollars for each accident. See Plaintiff Exhibit C. In addition, the defendant had issued one insurance policy covering two vehicles to plaintiff Eugene A. Fisher, as the insured and as operator along with his wife, Doris J. Fisher, providing each vehicle with, inter alia, underinsured motorist coverage in the amount of one hundred thousand dollars for each person and a total of three hundred thousand dollars for each accident. See Plaintiff's Exhibit C.
When killed in the accident, Julie Lynn Fisher was driving her own car insured by defendant, not one of the cars owned by Eugene A. Fisher and insured by defendant under the policy issued to Eugene A. Fisher.
Summary judgment is appropriate if there exists no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Small v. Seldows Stationery, 617 F.2d 992, 994 (3d Cir.1980). The court does not resolve questions of disputed fact, but simply decides whether there is a genuine issue of fact which must be resolved at trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986); Ettinger v. Johnson, 556 F.2d 692 (3d Cir. 1977). The facts must be viewed in the light most favorable to the opposing party, and reasonable doubt as to the existence of a genuine issue of material fact is to be resolved against the moving party. Continental Insurance Co. v. Bodie, 682 F.2d 436, 438 (3d Cir.1982). However, Anderson, 477 U.S. at 249-50, 106 S.Ct. at 2510-11 (citations omitted). The inquiry is whether the evidence presents a sufficient disagreement to require submission to the jury, or whether it is so one-sided that one party must prevail as a matter of law. Id. at 252, 106 S.Ct. at 2512.
The parties have filed cross-motions for summary judgment. Briefly, defendant argues that all issues before the court should be submitted to arbitration pursuant to the arbitration provision of the insurance policy and because plaintiff initially agreed to and participated in the arbitration process. In the alternative, defendant argues that plaintiff's failure to comply with the consent-to-settle provision of the insurance policy extinguishes all of defendant's obligations under the policy. In plaintiff's motion, he argues that no genuine issue of material fact exist as to the amount of damages suffered by the deceased; that the underinsured motorist coverage under both the insurance policy issued to the Julie Lynn Fisher ($100,000.00) and Eugene A. Fisher, plaintiff, ($100,000.00 for each of two vehicles, totalling $200,000.00) should be stacked to provide $300,000.00 in underinsured motorist coverage; and that the set-off provision of the insurance policy issued to Julie Lynn Fisher does not permit the defendant to use the one million dollar settlement received by plaintiff to eliminate the defendant's obligations under the policy.
Jurisdiction over plaintiff's claims is established by diversity of citizenship of the parties, 28 U.S.C. § 1332. My function is to apply the law of Pennsylvania, Wolk v. Saks Fifth Ave. Inc., 728 F.2d 221 (3d Cir.1984). After reviewing the law of Pennsylvania concerning many of legal issues raised in this action, it is clear that I do not have the benefit of firm guidance from the Pennsylvania Supreme Court. Nonetheless, I must "predict the position which that court would take in resolving this dispute." Robertson v. Allied Signal, Inc., 914 F.2d 360, 363 (3d Cir.1990).
Initially I must determine whether plaintiff's participation in the arbitration process binds him to proceed in that forum. It is uncontested that in his correspondence to defendant of December 10, 1987, plaintiff requested that a arbitration hearing be convened. Also, plaintiff selected an arbitrator, met with defendant's counsel, and scheduled a hearing. However, it is unclear from defendant's motion and affidavit whether an arbitration hearing was ever held. See defendant affidavit of Gary S. Duke ¶ 18. Plaintiff abandoned arbitration and pursued this declaratory judgment action.
Considering that defendant has failed to demonstrate any prejudice resulting from plaintiff's decision to seek a judicial determination, or that plaintiff has obtained any advantage by his conduct, I am not persuaded that plaintiff's conduct warrants refusing him recourse to this court. See McCabe v. Prudential Property and Casualty Insurance Company, 1989 WL 143195 (E.D.Pa.1989) () Moreover, plaintiff's right to a judicial determination is governed primarily by the language of the arbitration clause of the policy. The language in the policy is identical1 to that interpreted in McCabe v. Prudential Property and Casualty Insurance Company, 1989 WL 143195 (E.D.Pa. 1989), and is essentially the same as that interpreted by the Third Circuit in Meyers v. State Farm Insurance Co., 842 F.2d 705 (3d Cir.1988). There, the Third Circuit held that the policy requires arbitration of matters concerning "fault and amount, and that it does not mandate arbitration of disputes over coverage." Id. at 707. See Aetna Casualty and Surety v. Kauffman, 1991 WL 951 (E.D.Pa.) (); Nonemacher v. Atena Casualty & Surety Co., 710 F.Supp. 602 (E.D.Pa.1989) (); Schemberg v. Progressive Casualty Ins. Co., 709 F.Supp. 620 (E.D.Pa.1989) (); Prudential Property Cas. Ins. Co. v. Nayerahamadi, 593 F.Supp. 216 (E.D.Pa.1984) ().
The arbitration clause of the insurance policy between the parties and relevant case law interpreting this language establishes that arbitration is not appropriate for determining the legal raised in these motions.2 In particular, the issue of whether the consent-to-settle provision is enforceable under the law of Pennsylvania is a matter for judicial consideration.
Turning to the dispositive issue, defendant argues that plaintiff is denied all underinsured motorist coverage under the policies because of his failure to obtain defendant's consent before releasing and settling with the tort-feasors in the consolidated civil action. Defendant relies on correspondence between the parties to establish the relevant facts. In plaintiff's counsel's letter of May 28, 1987, he notes, inter alia, that he has filed suit against the tortfeasors and that the tort-feasors have one million dollars in insurance coverage. This letter also gives notice of plaintiff's underinsurance claim and that "we plaintiff have offered to settle with the tort-feasors for the policy limits of one million dollars PROVIDED that the settlement is effected by Friday, June 5, 1987." Defendant Exhibit E Plaintiff letter of May 28, 1987.
In its letter of June 11, 1987, defendant acknowledges receipt of plaintiff's letter of May 28, 1987 and states that under...
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