Lamar v. Colonial Penn Ins. Co.
| Decision Date | 28 August 1990 |
| Citation | 578 A.2d 1337,396 Pa.Super. 527 |
| Court | Pennsylvania Superior Court |
| Parties | Robert LAMAR, Appellant, v. COLONIAL PENN INSURANCE COMPANY, Appellee. |
Joseph M. Zoffer, Pittsburgh, for appellant.
Dara A. Decourcy, Pittsburgh, for appellee.
Before ROWLEY, KELLY and MONTGOMERY, JJ.
The plaintiff-appellant, Robert Lamar, instituted this action seeking an order from the trial court to compel defendant-appellee Colonial Penn Insurance Company, to arbitrate a dispute concerning underinsurance coverage. After a review of the briefs and consideration of the arguments of counsel, the trial court denied the appellant's request, without prejudice to the appellant's right to file a separate legal action to seek the desired insurance coverage from the appellee. Thereafter, the appellant filed the instant appeal to our court.
There appears to be no dispute that in late September, 1988, the appellant was severely injured when he was struck by a motor vehicle while he was a pedestrian. At the time, he was covered by a policy of motor vehicle insurance issued by appellee, Colonial Penn Insurance Company. The policy included first party medical benefits and underinsured motorists coverage. The plaintiff's injuries resulted in over $75,000.00 in medical expenses. The appellee paid $10,000.00 to a medical provider, representing the limits of first party medical benefit coverage on the appellant's policy. The appellee also tendered its consent and waived any rights of subrogation with respect to the appellant's settlement of a third party claim against the responsible driver for the limits of the liability insurance coverage available under that driver's policy. Finally, the appellee paid the appellant $15,000.00 in underinsured motorists benefits, pursuant to the specific limit set forth in the appellant's policy.
The trial court determined that the appellant sought arbitration based upon the contention that the limits of his underinsured coverage should have been $100,000.00, instead of $15,000.00. The appellant claimed that the appellee did not provide sufficient information to permit him an informed choice as to available coverage. He contended that he intended to elect the higher amount of coverage.
The arbitration provision of the insurance policy in issue states:
If We and the insured person do not agree:
1. Whether that person is legally entitled to recover damages from the owner or operator of an uninsured motor vehicle or underinsured motor vehicle;
2. As to the amount of damages; either party may make a written demand for arbitration. Arbitration shall be conducted in accordance with the provisions of the Pennsylvania Uniform Arbitration Act. Each party will select the arbitrator. The two arbitrators will select a third. If they cannot agree within 30 days, either may request that selection be made by a judge of a court having jurisdiction. Each party will:
1. Pay the expenses it incurs; and
2. Bear the expenses of the third arbitrator equally.
Unless both parties agree otherwise, arbitration will take place in the county in which the insured person lives. Local rules of law as to procedure and evidence will apply. A decision agreed to by two of the arbitrators will be binding.
The trial court refused to require the appellee to arbitrate the appellant's claim. In its opinion, the trial court indicated that the appellant was seeking to arbitrate a claim that he intended to elect underinsurance coverage in a larger amount than was provided by his policy. The trial court found that the dispute involved questions concerning the appellant's intent, rather than issues concerning the provisions of the policy. The court noted that in Ostroff v. Keystone Insurance Company, 357 Pa.Super. 109, 515 A.2d 584 (1986), it was held that arbitrators were limited to interpreting the terms of a policy, and that consideration of tort theories to enlarge the coverage listed on the face of the policy was improper. Because the trial court in the instant case found that the plaintiff was not asking for arbitration concerning the terms of the policy, but rather a decision as to "extrinsic matters", concerning the appellant's intent at the time he selected coverage, the court concluded that the request to compel arbitration should not be granted.
On April 27, 1990, the Supreme Court of Pennsylvania filed its decision in Brennan v. General Accident Fire and Life Assurance Corporation, Ltd., ...
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