Great Am. Ins. Co. v. American Arbitration Ass'n

• Decision Date: 09 January 1970
• Citation: 436 Pa. 370,260 A.2d 769
• Parties: GREAT AMERICAN INSURANCE COMPANY, Appellant, v. AMERICAN ARBITRATION ASSOCIATION and Blanche Rush.
• Court: Pennsylvania Supreme Court

260 A.2d 769

436 Pa. 370

GREAT AMERICAN INSURANCE COMPANY, Appellant, v. AMERICAN ARBITRATION ASSOCIATION and Blanche Rush.

Supreme Court of Pennsylvania.

January 9, 1970.

G. Wayne Renneisen, Philadelphia, for appellant.

Arnold M. Kessler, Philadelphia, for appellee, Blanche Rush.

Before BELL, C.J., and JONES, COHEN, EAGEN, O'BRIEN ROBERTS and POMEROY, JJ.

OPINION OF THE COURT

O'BRIEN Justice.

The instant case is a patent attempt by appellant, Great American Insurance Company, (Great American) to evade the dictates of a long series of recent cases in this Court dealing with the arbitration clause of the uninsured motorist provision of the standard automobile insurance policy. In those cases, we have continuously held: 'The arbitration clause, in our view indicates that the parties contemplated one method, and one method only, for the resolution of disputes under this coverage. That method was arbitration and all such disputes should be so decided.' Nat. Grange Mut. Ins. Co. v Kihn, 428 Pa. 179, 236 A.2d 758 (1968). See also Allstate Ins. Co. v. Taylor, 434 Pa. 21, 252 A.2d 618 (1969); Merchants Mut. Ins. Co. v. Am. Arb. Ass'n. (et al.), 433 Pa. 250, 248 A.2d 842 (1969); Harleysville Mut. Ins. Co. v. Medycki, 431 Pa. 67, 244 A.2d 655 (1968).

The facts of the instant case are as follows. Blanche Rush was injured while a passenger in a taxicab, as the result of an accident due to the negligence of the cab driver. Initially, Miss Rush sued the owner of the cab, and when the owner's insurance carrier became insolvent, she filed a claim against Great American under the uninsured motorist provision ^[1] of her brother's policy under which she qualified as an insured.

Unlike the series of cases cited above, the insurance carrier did not immediately bring an equity action to enjoin the arbitration. Instead, it proceeded to arbitration. The parties agreed that the arbitration would be divided into two parts. In the first part, the arbitrator would decide whether coverage existed; if he decided that it did, in the second part he would assess damages. The arbitrator decided that coverage did exist and scheduled a second hearing.

Great American then filed a complaint in equity against the American Arbitration Association and Miss Rush, seeking to enjoin the second hearing on the basis that the arbitrator had committed misconduct in the first hearing. Great American next filed a rule upon appellees seeking a preliminary injunction. After appellees filed an answer, the court below dismissed the rule, and this appeal followed.

The basis for the denial of relief below was the court's view that no misconduct had been committed by the arbitrator. We are in complete agreement with that view. In Keller v. Local 249, 423 Pa. 353, 355, 223 A.2d 724, 726 (1966), we held: '(C)ommon law arbitration may be reviewed only for fraud, misconduct, corruption or other such irregularity which caused the arbitrator to render an unjust, inequitable and unconscionable award.' Appellant argues only that misconduct existed here. However, the only asserted misconduct is the alleged failure of the arbitrator properly to apply the law with regard to uninsured motorist coverage. We have often stated that in common law arbitration such as this 'the arbitrators are the final judges of both the facts and the law and their decision will not be disturbed for a mistake of either.' P. G. Metals Co v. Hofkin, 420 Pa. 620, 218 A.2d 238 (1966). See also Wingate Const. Co. v. Schweizer Dipple, Inc., 419 Pa. 74, 213 A.2d 275 (1965); Harwitz v. Selas Corp. of America, 406 Pa. 539, 178 A.2d 617 (1962). The misconduct necessary to overturn an arbitrator's action is not a mere mistake of law, nor even several mistakes aggregated. As stated in Westinghouse Air Brake Co. Appeal, 166 Pa.Super. 91, 97, 70 A.2d 681, 684 (1950); '(A) contrary holding would mean that arbitration proceedings, instead of being a quick and easy mode of obtaining justice, would be merely an unnecessary step in the course of litigation, causing delay and...