Sudders v. United Nat. Ins. Co.

• Citation: 269 A.2d 370,217 Pa.Super. 196
• Parties: In the Matter of Arbitration Richard A. SUDDERS and Jean Cook Barrot v. UNITED NATIONAL INSURANCE COMPANY, Appellant.
• Decision Date: 18 September 1970
• Court: Superior Court of Pennsylvania

Page 370

269 A.2d 370

217 Pa.Super. 196

In the Matter of Arbitration Richard A. SUDDERS and Jean Cook Barrot v. UNITED NATIONAL INSURANCE COMPANY, Appellant.

Superior Court of Pennsylvania.

Sept. 18, 1970.

Joseph Lurie, Richard S. March, Philadelphia, for appellant.

Julius E. Fioravanti, Philadelphia, for appellee.

Before WRIGHT, P.J., and WATKINS, MONTGOMERY, JACOBS, HOFFMAN, SPAULDING and CERCONE, JJ.

HOFFMAN, Judge.

This is an appeal from the order of the lower court confirming an arbitration award arising under the uninsured motorist provision of an automobile liability policy.

On November 16, 1966, the plaintiffs herein were involved in an automobile accident with one John Madden, who, at the time of the accident, was operating his own motor vehicle. As a result of a prior suspension, however, Madden had been granted only a restricted license, after Guardian Mutual Insurance Company (Guardian) had issued to Madden a limited operator's liability policy in accordance with the Motor Vehicle Safety Responsibility Provision of the Vehicle Code, Act of April 29, 1959, P.L. 58, § 1401 et seq., 75 P.S. § 1401 et seq. That policy had provided that Madden would be covered only while driving an automobile Not owned by him.

Shortly after the accident, plaintiff communicated with the Hayes Adjustment Bureau to ascertain whether Guardian insured Madden for the damages resulting from the accident. On July 5, 1967, plaintiff received a letter from Guardian disclaiming coverage. On July 28, 1967, plaintiff received a letter from the Insurance Department of the Commonwealth of Pennsylvania confirming that Madden had not been insured for the above accident.

On December 13, 1967, plaintiff filed a formal demand for arbitration under plaintiff Sudders' uninsured motorist policy, issued by United National Insurance Company (United). In January, 1968, plaintiff Sudders was referred by United to Guardian's counsel, who stated in a letter to plaintiff that 'Guardian Does insure Madden.' (Emphasis added.)

United then filed a complaint in equity, seeking to enjoin plaintiff from proceeding in arbitration under the uninsured motorist policy against United since the issue of Madden's insurance was a sham, which should not be submitted to arbitration. Plaintiff objected preliminarily to this complaint. The complaint was dismissed by the lower court which stated: 'We believe that the record before us reveals that arbitration was sought at the time when plaintiffs clearly had reason to believe that Madden was uninsured. Since that time, counsel for Madden's insurance company has indicated that Madden is covered. Under these curious and contradictory facts, we believe that a legitimate issue is raised concerning Madden's insurance and under the recent decisions of the Supreme Court of Pennsylvania, we believe that the proper tribunal for deciding such an issue is the arbitration panel. National Grange Insurance Co. v. Ruhn, (Kuhn) 428 Pa. 179 (,236 A.2d 758) (1968).' $At the arbitration hearing, the policy was presented. Its provisions noted that Madden was convered only when using a motor vehicle not owned by him. Guardian's counsel then testified that he had originally advised Guardian that there was no coverage for Madden in view of the exclusion referred to previously. Later, however, when plaintiff had indicated his intention to file under the uninsured motorist coverage, Guardian's counsel became convinced that, in view of the Safety Responsibility Provisions of the Vehicle Code, the exclusion...