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GREAT AMERICAN INSURANCE COMPANY v. AMERICAN ARBITRATION ASSOCIATION (01/09/70)

decided: January 9, 1970.

GREAT AMERICAN INSURANCE COMPANY, APPELLANT,
v.
AMERICAN ARBITRATION ASSOCIATION



Appeal from decree of Court of Common Pleas of Philadelphia County, Sept. T., 1968, No. 1949, in case of Great American Insurance Company v. American Arbitration Association et al.

COUNSEL

G. Wayne Renneisen, with him Liebert, Harvey, Herting, Short and Lavin, for appellant.

Arnold M. Kessler, with him Bernstein, Bernstein, Harrison & Kessler, for appellee.

Bell, C. J., Jones, Cohen, Eagen, O'Brien, Roberts and Pomeroy, JJ. Opinion by Mr. Justice O'Brien.

Author: O'brien

[ 436 Pa. Page 371]

The instant case is a patent attempt by appellant, Great American Insurance Company (Great American), to evade the dictates of a long series of recent cases in this Court dealing with the arbitration clause of the uninsured motorist provision of the standard automobile insurance policy. In those cases, we have continuously held: "The arbitration clause, in our view, indicates that the parties contemplated one method, and one method only, for the resolution of disputes under this coverage. That method was arbitration and all such disputes should be so decided." Nat. Grange M. Ins. Co. v. Kuhn, 428 Pa. 179, 236 A.2d 758 (1968). See also Allstate Ins. Co. v. Taylor, 434 Pa. 21, 252 A.2d 618 (1969); Merchants M. I. Co. v. Am. Arb. Assn., 433 Pa. 250, 248 A.2d 842 (1969); Harleysville M. Ins. Co. v. Medycki, 431 Pa. 67, 244 A.2d 655 (1968).

The facts of the instant case are as follows. Blanche Rush was injured while a passenger in a taxicab, as the result of an accident due to the negligence of the cab driver. Initially, Miss Rush sued the owner of the cab, and when the owner's insurance carrier became insolvent, she filed a claim against Great American under the uninsured motorist provision*fn1 of her brother's

[ 436 Pa. Page 372]

    policy under which she qualified as an insured.

Unlike the series of cases cited above, the insurance carrier did not immediately bring an equity action to enjoin the arbitration. Instead, it proceeded to arbitration. The parties agreed that the arbitration would be divided into two parts. In the first part, the arbitrator would decide whether coverage existed; if he decided that it did, in the second part he would assess damages. The arbitrator decided that coverage did exist and scheduled a second hearing.

Great American then filed a complaint in equity against the American Arbitration Association and Miss Rush, seeking to enjoin the second hearing on the basis that the arbitrator had committed misconduct in the first hearing. Great American next filed a rule upon appellees seeking a preliminary injunction. After appellees filed an answer, the court below dismissed the rule, and this appeal followed.

The basis for the denial of relief below was the court's view that no misconduct had been committed by the arbitrator. We are in complete agreement with that view. In Keller v. Local 249, 423 Pa. 353, 355, 223 A.2d 724 (1966), we held: "[C]ommon law arbitration may be reviewed only for fraud, misconduct, corruption or other such irregularity which caused the arbitrator to ...


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