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MELVIN R. SNYDER v. NATIONWIDE MUTUAL INSURANCE COMPANY (05/02/88)

filed: May 2, 1988.

MELVIN R. SNYDER, APPELLANT,
v.
NATIONWIDE MUTUAL INSURANCE COMPANY, APPELLEE



Appeal from the Order entered May 1, 1987 in the Court of Common Pleas of Lycoming County, Civil Division, at No. 84-S-4010.

COUNSEL

Robert Vesely, Williamsport, pro hac vice.

Robert A. Seiferth, Media, for appellee.

Olszewski, Del Sole and Johnson, JJ.

Author: Del Sole

[ 373 Pa. Super. Page 295]

This is an appeal from a trial court order which denied Appellant's petition to compel arbitration. Because we disagree with the trial court's determination that Appellants' petition was premature, we reverse its order.

The facts are not in dispute. On February 19, 1985, the vehicle in which Appellants were traveling collided with a vehicle operated by David Witt and owned by Countryside Auto Sales. The Appellants', who suffered serious injuries as a result of the accident, settled with Countryside Auto's liability carrier for the liability limits of its policy. Excess coverage was provided for in a policy issued by Nationwide Insurance Company to David Witt. A separate civil action is presently being pursued by the Appellants' against David Witt since settlement was not reached with regard to Nationwide's excess liability coverage of Witt.

Appellants are the named insureds on a policy also issued by Nationwide Insurance Company. This policy contains provisions for underinsurance coverage. In addition, it includes an agreement to arbitrate where the insurer and the insured "do not agree about the insured's right to recover damages or the amount of damages". Pursuant to these terms, Appellants filed a Petition To Compel Arbitration after their demands for underinsurance coverage and selection of arbitrators went unanswered. The trial court ruled that "[i]n the absence of a verdict in the underlying case awarding an amount in excess of the negligent party's liability insurance coverage, or a settlement by that tortfeasor

[ 373 Pa. Super. Page 296]

    in the amount of policy limits, or an agreement between the parties to this action that the claim will exceed the limits of the tortfeasor's liability coverage, . . . an application to compel arbitration is premature." Based upon this reasoning, the court denied Appellants' petition to compel arbitration. In its appeal from the trial court's order, Appellants ask us to consider whether the court erred in determining that a certain precondition must be met before arbitration could proceed.

In examining this issue we are guided by this court's recent decision in Rocca v. Pennsylvania General Ins. Co., 358 Pa. Super. 67, 516 A.2d 772 (1987). A two car accident also provided the factual background in Rocca. Therein the appellant, Linda Rocca was a passenger in a vehicle which collided with another auto. A settlement was reached with the second driver's insurance carrier for the policy limits. Nevertheless, the appellant's injuries were not fully compensated. Ms. Rocca sought to recover underinsured motorist coverage under a policy appellee issued to her parents which listed her as a named insured. The appellant made a demand for arbitration when the appellee refused to honor her claim. The trial court found the petition to appoint arbitrators to be "premature" and ruled that it was necessary for Ms. Rocca to exhaust her claims against the driver of the vehicle in which she was traveling before bringing her underinsured motorist claim. This court reversed the trial court's decision and found the matter appropriate for resolution before an arbitration panel.

At this juncture it is perhaps appropriate to note that the trial court dismissed the Rocca case as inapplicable to the case at hand. The Appellee concurs with the trial court's reading of Rocca and reasons that it may be distinguished from the instant case. Appellee asserts that Rocca did not answer the question presently at issue, "whether a claimant can automatically proceed to arbitration without regard to the payments of the limits of liability on any ...


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