decided: April 22, 1975.
COLONIAL PENN INSURANCE COMPANY, APPELLANT
Appeal from order of Court of Common Pleas of Lackawanna County, Sept. T., 1973, No. 738, in case of Lewis C. Howey v. Colonial Penn Insurance Company.
John H. Appleton, with him Irwin Schneider, and Nogi, O'Malley & Harris, for appellant.
Roger Mattes, with him Laster, Strohl, Kane & Mattes, for appellee.
Watkins, P. J., Jacobs, Hoffman, Cercone, Price, Van der Voort, and Spaeth, JJ. Opinion by Hoffman, J., in Support of Per Curiam Order To Quash. Price and Spaeth, JJ., join in this opinion. Opinion by Jacobs, J., in Support of Per Curiam Order To Quash. Watkins, P.j., joins in this opinion. Dissenting Opinion by Van der Voort, J. Cercone, J., joins in this dissenting opinion.
Author: Per Curiam
[ 234 Pa. Super. Page 383]
The appeal is quashed.
[ 234 Pa. Super. Page 384]
Opinion by Hoffman, J., in Support of Per Curiam Order To Quash:
Appellant's preliminary objections do not question the jurisdiction of the lower court and, therefore, this appeal must be quashed as interlocutory. I reach this conclusion reluctantly because it may result in an unnecessary trial. As pointed out by Judge Van der Voort, the lower court should hold its proceedings in abeyance until the matter is disposed of in the forum freely chosen by the litigants. This is true despite the fact that an arbitration clause does not affect the jurisdiction of the court of common pleas. If the lower court does not adopt this approach and proceeds to trial, on appeal by the insurance company we would have to reverse and remand for arbitration proceedings.
Opinion by Jacobs, J., in Support of Per Curiam Order To Quash:
I would quash the present appeal. Appellant's claim in his preliminary objections that a provision in the insurance policy required the submission of the case to arbitration does not raise a jurisdictional issue so as to permit an interlocutory appeal from the order overruling the preliminary objections. Capezio & Things, Inc. v. The Wynnewood Meredith Corp., 455 Pa. 84, 314 A.2d 20 (1974); Shaw Elec. Co., Inc. v. I.B.E.W. Loc. U. No. 98, 422 Pa. 211, 220 A.2d 889 (1966).
Dissenting Opinion by Van der Voort, J.:
On April 30, 1973, appellee (the insured) and appellant (an insurance company) entered into a contract of insurance covering appellee's automobile. The contract contained a clause which provided for arbitration in the event that the insured and the insurance company should
[ 234 Pa. Super. Page 385]
disagree on any claim made by the insured under the uninsured motorist provisions of the policy. On August 3, 1973, the insured was involved in an auto accident with an uninsured motorist; subsequently the insured filed a claim with appellant for damages under the Uninsured Motorist, Collision, and Medical Payments coverages of the policy. A dispute arose as to whether or not the insured was entitled to recover damages under the terms of the policy, and also as to the amount (if any) that the insured should be awarded. Instead of submitting the matter to arbitration (which would have required the payment of a $75 fee) the insured, on January 24, 1974, filed a complaint in the Court of Common Pleas of Lackawanna County (which involved only a $12.50 filing fee). On February 21, 1974, the insurance company filed preliminary objections challenging the jurisdiction of the court to hear the case, which objections were overruled by the lower court on April 26, 1974. The insurance company brought this appeal from the dismissal of its preliminary objections.
In University Square Number One, Inc. v. Marhoefer, 407 Pa. 257, 180 A.2d 427 (1962), a case involving a building contract which contained an arbitration provision, our Supreme Court stated at 259-260:
"It is clear that an arbitration provision in a contract -- irrespective of whether it is common law or statutory arbitration -- does not affect the jurisdiction of the lower court."
The court in that case cited Zerbe Township School District v. Thomas, 353 Pa. 162, 44 A.2d 566 (1945) for the principle that "even though a plaintiff have no standing to bring his action, even though his complaint be demurrable, even though he fail to establish its allegations, even though the court should finally conclude that the relief he seeks should not be granted, not any or all of these circumstances would enter into, much less determine, the question whether the court had jurisdiction of the litigation."
[ 234 Pa. Super. Page 386]
The court in Marhoefer noted that the test of jurisdiction was "the competency of the court to determine controversies of the general class to which the case presented for its consideration belonged, -- whether the court had power to enter upon the inquiry, not whether it might ultimately decide that it was unable to grant the relief sought in the particular case . . . ." 407 Pa. at 260.
In Central Contracting Company v. C. E. Youngdahl & Company, Inc., 418 Pa. 122, 133, 209 A.2d 810, 816 (1965), the Supreme Court affirmed the basic principle that "private parties cannot change by contract the rules of jurisdiction or venue embodied in the various laws of this Commonwealth." The court went on, however, to state the "modern and correct" rule that, "while private parties may not by contract prevent a court from asserting its jurisdiction or change the rules of venue, nevertheless, a court in which venue is proper and which has jurisdiction should decline to proceed with the cause when the parties have freely agreed that litigation shall be conducted in another forum and where such agreement is not unreasonable at the time of litigation."
Clauses in an insurance contract that require the parties to settle disputes by arbitration for bodily injury and by appraisal for property damage are certainly, standing alone, not unreasonable. Appellee in the case before us argues that the insurance policy he signed was a "contract of adhesion"; in effect, that he did not "freely agree" to arbitrate disputes. I disagree and would find -- since the clause providing for arbitration is reasonable and, moreover, furthers the policy of avoiding unnecessary court battles over uninsured motorist provisions in insurance policies*fn1 -- that the lower court should have referred
[ 234 Pa. Super. Page 387]
the matter to the forum contemplated by the parties, i.e., arbitration and/or appraisal.
*fn1 See Allstate Insurance Company v. McMonagle, 449 Pa. 362, 296 A.2d 738 (1972); Preferred Risk Mut. Ins. Co. v. Martin, 436 Pa. 374, 260 A.2d 804 (1970); Pennsylvania General Ins. Co. v. Barr, 435 Pa. 456, 257 A.2d 550 (1969); Allstate Ins. Co. v. Taylor, 434 Pa. 21, 252 A.2d 618 (1969); Harleysville Mut. Ins. Co. v. Medycki, 431 Pa. 67, 244 A.2d 655 (1968); National Grange Mut. Ins. Co. v. Kuhn, 428 Pa. 179, 236 A.2d 758 (1968).