James J. McCabe, Jr., Philadelphia, with him Joseph M. Hankins, Philadelphia, for appellant.
Arthur J. Seidner, Philadelphia, for appellee.
Watkins, President Judge, and Jacobs, Cercone, Price, Van der Voort and Spaeth, JJ. Watkins, former President Judge, and Hoffman, J., did not participate in the consideration or decision of this case.
[ 255 Pa. Super. Page 119]
On this appeal we are again faced with the question of whether an insurance company may contractually divide the uninsured motorist coverage in two or more automobile
[ 255 Pa. Super. Page 120]
insurance policies to prevent "stacking" or "pyramiding" of recovery.*fn1 Appellant contends that the lower court erred in refusing to modify the award of $20,000 to appellee following arbitration conducted pursuant to the Arbitration Act of 1927, 5 P.S. § 161 et seq.*fn2 We agree and therefore reverse
[ 255 Pa. Super. Page 121]
and remand for the entry of an award in the amount of $10,000.
Appellee, Betty Adelman, was injured in an automobile accident on June 28, 1974 when her 1966 Plymouth, which she was operating, was struck by an uninsured motorist. At the time of the accident both appellee's car and the 1970 Oldsmobile belonging to her husband were insured under separate policies issued by appellant, State Farm. Each policy provided uninsured motorist coverage of $10,000 for any one person injured in an accident as required by the Uninsured Motorist Act.*fn3 Appellee filed a claim for uninsured motorist coverage under both policies, requesting a total payment of $20,000.*fn4 Appellant maintained, however, that appellee was entitled to recover only under the policy covering her vehicle and the dispute was submitted to arbitration in accordance with the arbitration clause in the policies. See Record at 35a and 51a.
Following a hearing before a mutually agreed upon arbitrator on June 2, 1976, and the submission of written briefs, the arbitrator entered an award of $20,000 in favor of appellee. The decision, issued on June 17, 1976, clearly stated that the arbitrator had limited himself to the question of the interpretation to be given to the policy and considered Nationwide Mutual Insurance Co. v. Ealy, 221 Pa. Super. 138, 289 A.2d 113 (1972), to be the controlling authority. He determined, however, that the exclusion which we approved in Ealy did not exist in the State Farm policies in question. Appellant filed a timely motion to modify the award in the Court of Common Pleas of Philadelphia County, asserting that the arbitrator's award was contrary to law. The lower court entered an order denying the motion on October 20, 1976, and issued an opinion in support of that order on March 28, 1977.
[ 255 Pa. Super. Page 122]
Both the arbitrator and the trial judge based their decisions on the mistaken belief that the Ealy exclusion was not contained in the State Farm policies presently under scrutiny.*fn5 On the contrary, we clearly dealt in Ealy with the exclusion to the uninsured motorist coverage which prevented recovery by the named insured or his relatives for injuries sustained while occupying an insured-owned automobile not listed in the declarations of the policy.*fn6 The policies issued by appellant to appellee and her husband contain language nearly identical to that in Ealy. Exclusion (b) in Section III of the State Farm policies issued to Mr. and Mrs. Adelman provides that the uninsured motorist coverage does not apply
(b) to bodily injury to an insured while occupying or through being struck by a land motor vehicle owned by the named insured or any resident of the same household, if ...