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STATE FARM INSURANCE COMPANY v. PATRICIA BULLOCK AND FRANCIS GREEN (07/22/83)

filed: July 22, 1983.

STATE FARM INSURANCE COMPANY, APPELLANT,
v.
PATRICIA BULLOCK AND FRANCIS GREEN



No. 2304 Philadelphia, 1980, Appeal from the Order of the Court of Common Pleas, Civil Trial Division, Equity, Philadelphia County, No. 2816, August Term, 1979.

COUNSEL

Joseph T. Murphy, Jr., Philadelphia, for appellant.

Fred Lowenchuss, Philadelphia, for appellee.

Price,*fn* Montemuro and Van der Voort, JJ. Price, J., did not participate in the consideration or decision of this case.

Author: Montemuro

[ 316 Pa. Super. Page 477]

On November 1, 1975, appellees, Patricia Bullock and Francis Green, were involved in a motor vehicle accident when the vehicle they were driving was struck by a vehicle driven by one Daniel Shields. Bullock commenced an action in trespass against Shields in the Court of Common Pleas of Philadelphia County. The case proceeded to compulsory arbitration and an award was entered in Bullock's favor in the amount of Eight Thousand ($8,000.00) Dollars. The award was properly appealed to the court of common pleas, for a trial de novo, by Shields insurer, Safeguard Mutual Insurance Company (hereinafter Safeguard).

On May 29, 1979, while that appeal was pending, the Insurance Commissioner of Pennsylvania, pursuant to the authority granted by 40 P.S. ยง 221.10(a),*fn1 issued a summary order suspending the business of Safeguard in this Commonwealth. The order also stated that an examination of the books, records, accounts and affairs of Safeguard revealed that "as of December 3, 1977, as of December 31, 1978, and at present, Safeguard is insolvent."*fn2

[ 316 Pa. Super. Page 478]

Thereafter, the appellees, Bullock and Green, through counsel, made a claim against Bullock's insurer, State Farm Insurance Company (hereinafter State Farm), under the uninsured motorist coverage provision of her policy. They contended that Safeguard's financial status and the Commissioner's order had the effect of rendering Shields uninsured, thus triggering the uninsured motorist coverage. State Farm refused coverage and the appellees sought arbitration of the claim. State Farm sought to enjoin the arbitration; however, the court below ordered it to proceed thereto in accordance with Mapp v. Nationwide Insurance Company, 268 Pa. Super. 404, 408 A.2d 850 (1979).*fn3 At arbitration the appellees, Bullock and Green, were awarded Twelve Thousand, Five Hundred ($12,500.00) Dollars and Two Thousand, Five Hundred ($2,500.00) Dollars, respectively.

Appellees filed a petition to confirm the arbitration award which was countered by State Farm's petition to vacate the arbitration award. Two major issues were presented in these petitions: (1) whether the arbitration was conducted pursuant to common law (appellee's contention) or the Arbitration Act of 1927*fn4 (State Farm's contention); and (2)

[ 316 Pa. Super. Page 479]

    whether the appellees, because of Safeguard's financial status, were eligible to recover under the uninsured motorist coverage provision.

The court below granted the appellees' petition to confirm and denied State Farm's petition to vacate after concluding that the appellees would prevail on both issues. The court's reasoning was that, assuming arguendo, the arbitration was pursuant to common law, then the limited scope of review would preclude disturbing the award inasmuch as there was no allegation of fraud, misconduct or illegality. Runewicz v. Keystone Insurance Company, 476 Pa. 456, 383 A.2d 189 (1978). Alternatively, it concluded that even under the ...


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