Carl A. Eck, Meyer, Darragh, Buckler, Bebenek & Eck, Arthur J. Murphy, Jr., Pittsburgh, for appellant.
Clyde T. MacVay, Evans, Ivory & Evans, Pittsburgh, for appellee.
Watkins, President Judge, and Jacobs, Hoffman, Cercone, Price, Van der Voort and Spaeth, JJ. Van der Voort and Spaeth, JJ., concur in the result.
[ 242 Pa. Super. Page 20]
Appellant contends that because the appellee failed to produce sufficient evidence, the lower court erred in vacating an arbitration award in an uninsured motorist case.
On or before July 4, 1974, appellee's mother, Mrs. Helen Reinhart, renewed two automobile insurance policies issued by appellant, State Automobile Insurance Association. One insurance policy, policy number H7-1391-737-001,
[ 242 Pa. Super. Page 21]
covered her 1969 Mercury; the other policy number H7-1391-737-002, covered her 1969 Chevrolet. The policies provided identical "Family Protection Coverage", which obligated the appellant to pay the insured all sums to a maximum of $10,000 which the insured would be entitled to recover "from the owner or operator of an uninsured highway vehicle because of bodily injury sustained by the insured, caused by accident and arising out of ownership, maintenance or use of such uninsured highway vehicle . . . ." The policies also contained the following exclusion: "This [uninsured motorist] insurance does not apply . . . to bodily injury to an insured while occupying a highway vehicle (other than an insured highway vehicle) owned by the named insured, any designated insured or any relative resident in the same household as the named or designated insured, or through being struck by such a vehicle, but this exclusion does not apply to the named insured or his relatives while occupying or if struck by a highway vehicle owned by a designated insured or his relatives; . . ." Thus, the appellant sought to limit its uninsured motorist coverage to insured persons operating or occupying vehicles included in the policy application or endorsed onto the policy. The policy also required arbitration of all disputes between the policyholder and insurance company.
Appellee was the owner of a 1973 Yamaha motorcycle, which he sought to insure under his mother's automobile insurance policy. Appellant's agent informed appellee that appellant would not insure a motorcycle. Thereafter, appellee procured insurance from Gateway Insurance Company. On July 9, 1974, while appellee was operating his motorcycle, he was struck and seriously injured by a hit-and-run driver. Appellee filed a claim with his insurer, Gateway Insurance Company; but Gateway was dissolved by the Insurance Department of the Commonwealth of Pennsylvania shortly after the accident. Therefore, appellee's claim was never paid. Appellee
[ 242 Pa. Super. Page 22]
then filed a claim with appellant, but it denied liability and refused to pay.
On December 12, 1974, appellee filed a petition to compel arbitration.*fn1 Appellant's answer averred that the dispute was not arbitrable because appellee's claim was within the uninsured motorist exclusion quoted above. On March 27, 1975, the court below determined that a dispute involving the existence or nonexistence of coverage was arbitrable and ordered appellant to name an arbitrator. On August 21, 1975, following a hearing, the arbitrators held: "that there is no uninsured motorist coverage applicable to the claim of Charles R. Reinhart under the policies issued to Helen Reinhart."
On September 25, appellee filed a petition to vacate the arbitration award alleging that the decision was based solely on the applicability of an exclusion which was against public policy. In its answer, appellant alleged that it had defended the claim on several independent grounds, and that the arbitrators had considered and rejected the appellee's contention that the exclusion violated the public policy of the Uninsured Motorist ...