Nationwide Mut. Ins. Co. v. Barbera

• Decision Date: 27 May 1971
• Citation: 443 Pa. 93,277 A.2d 821
• Parties: NATIONWIDE MUTUAL INSURANCE COMPANY, a Corporation, Appellant, v. Julius A. BARBERA and Charles Morrow, American Arbitration Association, Arbitrator.
• Court: Pennsylvania Supreme Court

277 A.2d 821

443 Pa. 93

NATIONWIDE MUTUAL INSURANCE COMPANY, a Corporation, Appellant, v. Julius A. BARBERA and Charles Morrow, American Arbitration

Association, Arbitrator.

Supreme Court of Pennsylvania.

May 27, 1971.

James J. McElligott, Weis & Weis, Pittsburgh, for appellant.

John E. Evans, Jr., Evans, Ivory & Evans, Pittsburgh, for appellee.

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

OPINION

EAGEN Justice.

An automobile operated by Fred Cancilla left its own side of the highway and collided head-on with an automobile traveling in the opposite direction operated by Julius Barbera. Several other vehicles became involved including one operated by Robert Barnett, and another by Donald Wolforth. Barbera, who suffered extremely serious and permanent injuries in the accident, instituted an action for damages against Cancilla, Barnett and Wolforth. The case was consolidated for trial with other actions arising out of the same accident and, after five days of trial, Barbera's claims against Barnett and Wolforth were settled by their insurance carriers for $37,500.

Barbera then instituted an uninsured motorist arbitration proceeding before the American Arbitration Association against Nationwide Insurance Company, his insurer, based on the fact that Cancilla was an uninsured motorist.

Charles Morrow was appointed Arbitrator and a hearing followed at which Nationwide appeared and defended. An award was subsequently entered in favor of Barbera for $9500.

In relevant part the insurance policy issued by Nationwide to Barbera provided the following:

'If any person making claim under the Uninsured Motorist Coverage and the Company do not agree that such person is legally entitled to recover damages * * * the matters * * * shall be settled by arbitration.' (Opinion, lower court)

The policy included another provision designated 'Trust Agreement' which provided:

In the event of payment to any person under this endorsement:

a. The Company shall be entitled to the extent of such payment to the proceeds of any settlement or judgment that may result from the exercise of any rights of recovery of such person against any person or organization legally responsible for the bodily injury because of which such payment is made;

b. Such person shall hold in trust for the benefit of the Company all rights of recovery which he shall have against such other person or organization because of the damages which are the subject of claim under this endorsement;

c. Such person shall do whatever is proper to secure and shall do nothing after loss to prejudice such rights.'

Nationwide took the position that the sums recovered by Barbera from Barnett and Wolforth should be held in trust for Nationwide under the terms of the policy. Barbera contended that the Trust Provision was not operative because Barnett and Wolforth were not 'legally responsible' for his 'bodily injury.' The issue was submitted to the Arbitrator and he decided it against Nationwide.

Nationwide then instituted this action in equity to vacate the...