Shapiro v. Keystone Ins. Co.
| Decision Date | 25 May 1989 |
| Parties | Morton A. SHAPIRO and Edie Shapiro, Appellees, v. KEYSTONE INSURANCE COMPANY, Appellant. 2114 Phila. 1988 |
| Court | Pennsylvania Superior Court |
Lee Albert, Philadelphia, for appellees.
Before WIEAND, MONTEMURO and HOFFMAN, JJ.
This is an appeal from an order refusing to vacate an arbitration award entered on an underinsured motorist claim. After careful review, we conclude that arbitration in Philadelphia County was improper and in contravention of the terms of the arbitration agreement which specifically provided for arbitration exclusively in the county in which the insured resided.
On November 22, 1985, Morton Shapiro, a resident of Cherry Hill, New Jersey, was injured in an automobile accident on Route 73, near Interstate 295, in Camden County, New Jersey. The third-party tortfeasor was insured under a policy of automobile insurance having a limit of liability of fifteen thousand ($15,000) dollars. The third party's carrier paid its policy limits to Shapiro. Shapiro's vehicle was insured under an automobile policy which had been issued by Keystone Insurance Company (Keystone), through its New Jersey Office. The policy contained underinsured motorist coverage. Claims for such benefits were subject to arbitration according to the following clause of the policy:
ARBITRATION
If we and a covered person do not agree:
1. Whether that person is legally entitled to recover damages under this endorsement; or
2. As to the amount of damages;
either party may make a written demand for arbitration. In this event, each party will select an 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....
....
Unless both parties agree otherwise, arbitration will take place in the county in which the covered 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 as to:
1. Whether the covered person is legally entitled to recover damages; and
2. The amount of damages.
A dispute arose between Keystone and Shapiro regarding the benefits to which the insured and his wife were entitled under the underinsured motorist coverage. On October 22, 1987, the Shapiros filed a Petition to Compel Appointment of Arbitrators in the Court of Common Pleas of Philadelphia, and caused a copy of the petition to be served on Keystone at its Philadelphia office. On December 17, 1987, the Philadelphia court appointed a panel of three arbitrators. Thereafter, Keystone filed a petition for reconsideration in which it alleged that the parties had agreed by their contract to arbitration only in Camden County, New Jersey. The petition for reconsideration was denied on February 18, 1988, as was a later request by Keystone to stay the arbitration proceedings. The arbitration hearing took place on February 25 1989, in Philadelphia. Keystone attended for the sole purpose of objecting to holding the hearing in a place other than Camden County, New Jersey. After hearing, in which Keystone did not participate, an award was entered in favor of the claimants in the amount of one hundred four thousand ($104,000) dollars. 1 The Shapiros filed a petition to have the award confirmed, and Keystone filed a petition to have it vacated. The trial court denied the petition to vacate, and confirmed the award in favor of the Shapiros. This appeal followed.
The principles governing our standard of review in this matter were stated in Chervenak, Keane & Co. v. Hotel Rittenhouse Associates, Inc., 328 Pa.Super. 357, 477 A.2d 482 (1984).
In an appeal from a common law arbitration determination, "the appellant must show by clear, precise and indubitable evidence that he was denied a hearing, or that there was fraud, misconduct, corruption or some other irregularity of this nature on the part of the arbitrator which caused him to render an unjust, inequitable or unconscionable award...." Harwitz v. Selas Corp. of America, 406 Pa. 539, 542, 178 A.2d 617, 619 (1962). See Runewicz v. Keystone Insurance Co., 476 Pa. 456, 383 A.2d 189 (1978); Smaligo v. Fireman's Fund Insurance Co., 432 Pa. 133, 247 A.2d 577 (1968); Sudders v. United National Insurance Co., 217 Pa.Superior Ct. 196, 269 A.2d 370 (1970), aff'd, 445 Pa. 599, 284 A.2d 500 (1971). "As to questions of law and fact, however [the arbitrators are] the final judge[s] and [the] award is not subject to disturbance of mistake of either." Sudders v. United National Insurance Co., supra 217 Pa.Super. at 200, 269 A.2d at 372. "[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 expense, but settling nothing finally." Westinghouse Air Brake Co. Appeal, 166 Pa.Superior Ct. 91, 97, 70 A.2d 681, 684 (1950).
In an arbitration proceeding, an irregularity refers to the process employed in reaching the result of the arbitration, not to the result itself. Press v. Maryland Casualty Co., 227 Pa.Superior Ct. 537, 540, 324 A.2d 403, 404 (1974). In Allstate Insurance Co. v. Fioravanti, 451 Pa. 108, 116, 299 A.2d 585, 589 (1973), our Supreme Court noted that:
It is possible to hypothecate [sic] an arbitration award which imports such bad faith, ignorance of the law and indifference to the justice of the result as to cause us to give content to the phrase "other irregularity" since it is the most definitionally elastic of the grounds for vacatur.
In most cases where an irregularity is alleged, our appellate courts have denied relief. See, e.g., Runewicz v. Keystone Insurance Co., supra (); Hain v. Keystone Insurance Co., 230 Pa.Superior Ct. 456, 459-60, 326 A.2d 526, 527 (1974) (). Compare Paugh v. Nationwide Insurance Co., 278 Pa.Superior Ct. 108, 420 A.2d 452 (1980) ().
Id. 328 Pa.Super. at 361-363, 477 A.2d at 485. See also: Elkins & Co. v. Suplee, 371 Pa.Super. 570, 576, 538 A.2d 883, 886 (1988); Parking Unlimited Inc. v. Monsour Medical Foundation, 299 Pa.Super. 289, 292-293, 445 A.2d 758, 760-761 (1982).
An arbitration award can be challenged if the arbitrators, in conducting hearings and making an award, exceed the power and authority given to them. This power and authority of the arbitrators is wholly dependent upon the terms of the agreement of the parties, who may place restrictions on their submission to arbitration. The arbitrators cannot validly determine a dispute if they violate or act inconsistently with the terms...
To continue reading
Request your trial
-
Jumara v. State Farm Ins. Co.
...says nothing about where a petition to appoint arbitrators or to compel arbitration may be brought. Accord Shapiro v. Keystone Ins. Co., 558 A.2d 891, 894 (Pa.Super.1989). But this conclusion does not end our inquiry. By its terms, the agreement directs that where, as here, the two parties'......
-
Civan v. Windermere Farms, Inc.
...erred in confirming an arbitration award because the arbitrators exceeded the power and authority given to them. Shapiro v. Keystone , 384 Pa.Super. 397, 558 A.2d 891 (1989).In Shapiro , an insured filed a petition to compel arbitration in Philadelphia County. Id. at 892. After the petition......
-
PBS Coal, Inc. v. Hardhat Min., Inc.
...and absent an agreement between the parties to arbitrate an issue, they cannot be compelled to arbitrate. Shapiro v. Keystone Ins. Co., 384 Pa.Super. 397, 403, 558 A.2d 891, 894 (1989). Agreements to arbitrate are to be strictly construed and should not be extended by implication. Emmaus Mu......
-
Boyce v. St. Paul Property and Liability Ins. Co.
...to compel arbitration in this case as it had personal jurisdiction over both of the parties. See Shapiro v. Keystone Insurance Co., 384 Pa.Super. 397, 558 A.2d 891 (1989). Since the parties could not agree on a neutral arbitrator, the court also had the authority, upon appellee's request, t......