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MILLER v. ALLSTATE INS. CO.

February 26, 1965

Ann L. MILLER, individually, and Ann L. Miller, Administratrix of the Estate of William M. Miller, deceased, and of the Estate of Elizabeth Madeline Miller, deceased, Plaintiff,
v.
ALLSTATE INSURANCE COMPANY, Defendant



The opinion of the court was delivered by: WILLSON

In this civil action diversity jurisdiction of the Court is invoked by plaintiffs, Defendant has filed a motion to dismiss under Rule 12(b) of the Rules of Civil Procedure.

It is noticed that plaintiffs in their complaint allege that defendant issued to William N. Miller, now deceased, what defendant calls an 'Allstate Crusader Policy.' Section II is titled -- 'PROTECTION AGAINST BODILY INJURY BY UNINSURED AUTOMOBILES.' -- It is under this provision that the suit is brought as plaintiffs allege that on or about August 22, 1963, while the policy was in force decedent Miller was driving his Volkswagen automobile in this District with his wife and young daughter as passengers when his car was negligently 'struck in the rear by an unidentified motorist operating a hit and run automobile (as defined within the term 'uninsured automobile' in the said policy) * * *' causing the driver to lose control of the Volkswagen with the result that the car left the road causing the death of two of the occupants and serious injury to Mrs. Miller.

 Defendant in its motion and in counsel's argument and brief indicates that the issue involves the interpretation of the contract between the parties, and that under the provisions of the policy the determination of legal liability and the amount of damages is an arbitrable issue.

 It is noticed that in Section II under an illustration, the language used is -- 'bodily injury protection against uninsured motorists who are legally liable.' It cannot be questioned but that under the terms of the policy the hazard insured against is that which arises from the owner or operator of an uninsured automobile. The persons insured against are stated to be:

 '1. The named insured and his relatives while residents of his household; and

 2. Any other person while in or upon, entering into or alighting from the owned automobile. * * *'

 Under definition of words used in the policy "uninsured automobile' means an automobile:

 '1. with respect to the ownership, maintenance or use of which there is no bodily injury liability insurance applicable at the time of accident; or

 '2. used without the permission of the owner thereof if there is no bodily injury liability insurance applicable at the time of the accident with respect to the operator thereof; * * *.'

 Now referring to the complaint in the case it is readily seen that an unidentified motorist operating a hit and run automobile is not per se covered by the policy. In any event that issue is not presently raised but is mentioned in connection with the discussion as to arbitration.

 'Determination of legal liability and amount of damages 'The determination as to whether the insured shall be legally entitled to recover damages, and if so entitled the amount thereof, shall be made by agreement between the insured and Allstate. 'In the event of disagreement and upon written demand of the insured, the matter or matters upon which the insured and Allstate do not agree shall be settled by arbitration in accordance with the rules of the American Arbitration Association and judgment upon the award rendered by the Arbitrator(s) may be entered in any Court having jurisdiction thereof. The insured and Allstate each agrees to consider itself bound and to be bound by any award made by the Arbitrator(s) pursuant to this Section II.'

 In answer to defendant's contention with regard to arbitration, plaintiffs say that it is not generally favored by the courts, and further that arbitration agreements must be strictly construed and are not to be extended by implication. It is said that to enforce an arbitration agreement the terms must be clear and unmistakable, otherwise the courts retain jurisdiction. See Commercial Union Assurance Co. v. Hocking, 115 Pa. 407, 8 A. 589, (1887) and Russo v. Independent Erection Co., Pittsburgh Legal Journal, 1946 -- Vol. 94, p. 232.

 It is my view that years ago courts were loath to release any of their jurisdiction to arbitration. However, under modern conditions that view is outmoded and perhaps of necessity due to the vast amount of litigation in the courts resulting in crowded calendars. The courts have turned to arbitration as one of the solutions to congested dockets. As far back at 1927 ...


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