Vogt v. Liberty Mut. Fire Ins. Co.

• Decision Date: 25 May 2006
• Citation: 900 A.2d 912
• Parties: Dianna L. VOGT, Appellee v. LIBERTY MUTUAL FIRE INSURANCE COMPANY, Appellant.
• Court: Pennsylvania Superior Court

900 A.2d 912

Dianna L. VOGT, Appellee v. LIBERTY MUTUAL FIRE INSURANCE COMPANY, Appellant.

Superior Court of Pennsylvania.

Argued November 30, 2005.

Filed May 25, 2006.

COPYRIGHT MATERIAL OMITTED

Charles W. Craven, Philadelphia, for appellant.

Robert F. Claraval, Harrisburg, for appellee.

Scott B. Cooper, Harrisburg, for Pa. Trial Lawyers, amicus curiae.

BEFORE: JOYCE, ORIE MELVIN and TAMILIA, JJ.

OPINION BY TAMILIA, J.:

¶ 1 Liberty Mutual Fire Insurance Company appeals the April 25, 2005 Order denying its June 22, 2004 petition to strike or, in the alternative, open the $75,000 judgment entered on December 3, 2003, in favor of appellee on her Underinsured Motorists' (UIM) claim. The court denied relief primarily on the basis appellant failed to challenge the arbitrators' award within the appeal period provided. We reverse.

¶ 2 The trial court set forth the procedural history in detail as follows.

Procedurally, appellee Dianna L. Vogt (hereinafter appellee) made an Underinsured Motorists' (hereinafter UIM) claim against appellant, based upon an automobile accident that occurred on July 15, 2000. On June 20, 2002, appellee filed a petition to compel UIM arbitration. [The] court issued an Order that compelled appellant to participate in UIM arbitration on February 3, 2003. After the board of arbitrators, on August 28, 2003, found in favor of appellee in the amount of $75,000, appellee filed a petition to confirm the arbitration award [on] December 2, 2003. On December 3, 2003, [the] court ordered that the arbitrators' award was confirmed and judgment was entered in the amount of $75,000, with interest from August 28, 2003 and court costs. Nearly ten (10) months later, on June 22, 2004, appellant filed a petition to strike or, in the alternative, to open the judgment of December 3, 2003.¹ . . . After [the] court inadvertently issued an unrelated Order [on] April 18, 2005, [it] issued an amended Order, on April 25, 2005, which denied appellant's petition to strike or, in the alternative, to open judgment. On May 16, 2005, appellant filed a notice of appeal with the Superior Court of Pennsylvania that appealed [the] April 25, 2005 Order.

Trial Court Opinion, Cherry, J., 7/11/05, at 1-2. Appellant raises two issues for our review:

1. Did the trial court commit reversible error by refusing to strike the judgment entered in this case when the face of the record showed flaws which undermined the validity of that judgment?

2. Did the trial court err or abuse its discretion by denying the petition to open the judgment when that judgment was fatally flawed, the petition's filing was reasonably prompt, the petition presented solid reasons why the judgment should not stand, and opening the judgment would not have prejudiced the plaintiff?

Appellant's brief at 3.

¶ 3 Appellant first makes several arguments as to why the judgment should be stricken, including: the judgment was void because it was entered on a "snap default basis" in response to a petition to confirm without a rule to show cause and, moreover, the trial court did not issue a rule to show cause; the judgment was void because the petition was not properly served on appellant; the court entered judgment one day after appellee filed the petition to confirm, thereby preventing appellant from challenging the petition; the trial court failed to provide and record adequate notice of the judgment as required by Pa.R.C.P. 236; the petition to confirm did not explain how appellee was entitled to a $75,000 judgment where the UIM limit under the policy was $15,000 and appellant already had paid that amount to appellee; appellant's petition to strike was not untimely; the trial court is not required to confirm an arbitration award as soon as a petition to confirm is filed, in violation of appellant's due process; and finally, appellant did not lose its right to object to appellee's notice of her petition to confirm.

¶ 4 We begin by noting the principles of law applicable to our review of the denial of a petition to strike a judgment. "Our standard of review from the denial of a petition to strike a judgment is limited to whether the trial court manifestly abused its discretion or committed an error of law." S. Med. Supply Co. v. Myers, 804 A.2d 1252, 1256 (Pa.Super.2002). "A petition to strike a judgment will not be granted unless a fatal defect in the judgment appears on the face of the record. Matters outside of the record will not be considered and if the record is self-sustaining, the judgment will not be stricken." Cargitlada v. Binks Mfg. Co., 837 A.2d 547, 549-550 (Pa.Super.2003) (citations omitted). For example, a judgment is properly stricken where the record indicates a fatal flaw such as defective service. Cintas Corp. v. Lee's Cleaning Servs., 549 Pa. 84, 93, 700 A.2d 915, 919 (1997) citing Sharp v. Valley Forge Medical Ctr. and Heart Hosp., Inc., 422 Pa. 124, 221 A.2d 185 (1966) and Clymire v. McKivitz, 350 Pa.Super. 472, 504 A.2d 937 (1986).

¶ 5 Also pertinent to our review is that although the parties cite and rely heavily upon statutory provisions relating to statutory arbitration, we conclude, rather, that the provisions relating to common law arbitration apply in this case. The Uniform Arbitration Act, section 7302, Scope of subchapter (a) General rule, provides:

An agreement to arbitrate a controversy on a nonjudicial basis shall be conclusively presumed to be an agreement to arbitrate pursuant to Subchapter B (relating to common law arbitration) unless the agreement to arbitrate is in writing and expressly provides for arbitration pursuant to this subchapter or any other similar statute, in which case the arbitration shall be governed by this subchapter.

42 Pa.C.S.A. § 7302(a). The agreement to arbitrate here, as set forth in the insurance policy, does not provide for statutory arbitration. Record No. 28, Exhibit 1, Liberty Mutual Auto Insurance Policy, at 13-14. Since the agreement to arbitrate does not provide for statutory arbitration and there is no evidence otherwise as to any agreement providing for statutory arbitration, the rules of common law arbitration apply.²

¶ 6 Section 7342 provides a list of provisions relating to statutory arbitration that are applicable in the context of common law arbitration. Those provisions include, inter alia, Section 7317, Form and service of applications to court, which provides,

[e]xcept as otherwise prescribed by general rules, an application to the court under this subchapter shall be by petition and shall be heard in the manner and upon the notice provided or prescribed by law for the making and hearing of petitions in civil matters. Unless the parties otherwise agree, notice of an initial application for an order of court shall be served in the manner provided or prescribed by law for the service of a writ of summons in a civil action.

42 Pa.C.S.A. § 7317 (emphasis supplied).

¶ 7 On December 2, 2003, appellee initiated a new civil action in the Court of Common Pleas in Dauphin County, when she filed her petition to confirm the arbitration award, in which she requested that the court enter an Order confirming the award, as well as a $75,000 judgment against appellant, with interest and court costs. Record No. 2. According to the explicit statutory language quoted above, this "initial application for an Order of court" was to be served "in the manner provided or prescribed by law for the service of a writ of summons in a civil action." 42 Pa.C.S.A. § 7317, supra; see also Bank One Delaware N.A. v. Mitchell, 70 Pa. D. & C.4th 353 (2005) (noting that pursuant to 42 Pa.C.S.A. § 7317, service of the petition to confirm an arbitration award shall be served in the manner provided by law for the service of a writ of summons in a civil action). The Pennsylvania Rules of Civil Procedure specifically mandate that "original process shall be served within the Commonwealth only by the sheriff." Pa. R.C.P. 400, Person to Make Service. Further, the Rules mandate that service of process on a corporation must be made to either:

(1) an executive officer, partner or trustee of the corporation or similar entity, or

(2) the manager, clerk or other person for the time being in charge of any regular place of business or activity of the corporation or similar entity, or

(3) an agent authorized by the corporation or similar entity in writing to receive service of process for it.

Pa.R.C.P. 424, Corporations and Similar Entities. Here, according to the trial court, appellee forwarded notice of her intent to file a petition to confirm arbitration award with a certificate of service, dated November 25, 2003. This notice was sent via regular and certified mail to Richard Shock, the Liberty Mutual claims adjustor assigned to this case. Trial Court Opinion, at 3. Appellee then filed her petition to confirm on December 2, 2003, and the court entered the Order confirming the award, and entered judgment, one day later, on December 3, 2003. Id. This attempt at service does not comply with the rules as cited above.

[A] court must have personal jurisdiction over a party to enter a judgment against it. Action taken by a court without jurisdiction is a nullity. Because jurisdiction over a person is dependent upon proper service, the Pennsylvania Supreme Court has held that the rules relating to service of process must be strictly followed.

Aquilino v. Phila. Catholic Archdiocese, 884 A.2d 1269, 1280 (Pa.Super.2005) citing Dubrey v. Izaguirre, 454 Pa.Super. 504, 685 A.2d 1391, 1393 (1996). We therefore agree with appellant and conclude that because service here was improper, the court did not have personal jurisdiction over appellant, and the subsequent action taken by the court in confirming the award and entering judgment is a nullity. We note that the timeliness of appellant's challenge to this judgment is not an issue since "a judgment may be attacked for lack of jurisdiction at any time[.]" Bancorp Group, Inc....