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ALEXANDER MEERZON AND LILIA GROYSMAN v. ERIE INSURANCE COMPANY (12/28/88)

filed: December 28, 1988.

ALEXANDER MEERZON AND LILIA GROYSMAN, APPELLANTS,
v.
ERIE INSURANCE COMPANY



Appeal from the Judgment entered November 17, 1988 in the Court of Common Pleas of Philadelphia County, Civil Division, at No. 2090 FEB 1986

COUNSEL

Paul R. Sacks, Philadelphia, for appellants.

Joseph M. Oberlies, Philadelphia, for appellee.

Olszewski, Kelly and Hoffman, JJ.

Author: Hoffman

[ 380 Pa. Super. Page 387]

This appeal is from the order below confirming an arbitration award. Appellants contend that the lower court erred in refusing to set aside the award because (1) the court employed the wrong standard of review; and (2) considered under the proper standard of review, the arbitration panel erred in concluding that appellants had failed to prove that the vehicle that struck their car was uninsured. For the reasons that follow, we agree and, accordingly, we reverse the order below, we vacate the arbitration award, and we remand the case for proceedings consistent with this Opinion.

On December 12, 1984, a car owned and driven by appellant Alexander Meerzon was involved in an automobile accident. As a result of the collision, both Meerzon and a passenger in his car, appellant Lilia Groysman, were injured. In February, 1986, appellants instituted this action by filing a petition to Compel Uninsured Motorist Arbitration against Meerzon's own insurer, appellee, Erie Insurance Company. On November 6, 1986, an arbitration hearing was held on the uninsured motorist claim. Following that hearing, the parties submitted supplemental memoranda.

[ 380 Pa. Super. Page 388]

On March 25, 1987, the arbitrators, with one arbitrator dissenting, recommended that judgment be entered in favor of appellee. On June 2, 1987, the panel reaffirmed this decision. On July 2, 1987, appellants filed a petition in the Court of Common Pleas seeking to set aside the arbitration award. The lower court denied the petition and this timely appeal followed.

I. STANDARD OF REVIEW

Appellants first contend that the lower court erred because it reviewed the arbitration decision pursuant to principles of common law arbitration rather than statutory arbitration.*fn1 Preliminarily, we note that "[i]t is always open to contracting parties to provide for statutory, rather than common law, arbitration." Allstate Ins. Co. v. Fioravanti, 451 Pa. 108, 116 n. 6, 299 A.2d 585, 589 n. 6 (1973). An important difference between the two types of arbitration is that statutory arbitration is subject to much broader judicial review than is common law arbitration. Cf. Obdyke v. Harleysville Mutual Ins. Co., 299 Pa. Super. 298, 301, 445 A.2d 763, 765 (1982) (construing Pennsylvania Arbitration Act of 1927).*fn2

Here, the car accident in which appellants were injured occurred on December 12, 1984. The insurance policy issued by appellee was in effect from September 22, 1984

[ 380 Pa. Super. Page 389]

    until September 22, 1985. See R.R. at 39a. The policy provided that if either party demanded arbitration to resolve a dispute regarding uninsured motorist coverage, the arbitration "shall be conducted in accordance with the Pennsylvania Arbitration Act of 1927." See Insurance Agreement at 9, R.R. at 118a. In addition, the parties stipulated that the arbitration proceeding was "a statutory arbitration under Act 27." N.T. November 6, 1986 at 35. Although the Act of 1927 was repealed and replaced by the Act of 1980 (codified at 42 Pa.C.S.A. §§ 7301-7362), the current ...


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