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NONEMACHER v. AETNA CAS. & SUR. CO.

April 10, 1989

ALICE NONEMACHER
v.
AETNA CASUALTY & SURETY CO.



The opinion of the court was delivered by: CAHN

 EDWARD N. CAHN, UNITED STATES DISTRICT JUDGE.

 This case involves a dispute between an insured and her insurance company over the amount of coverage that the company must provide to her. The plaintiff was injured in an automobile accident. She claims that she is entitled to both liability and underinsured motorist coverage. The company asserts that because of an offset provision in the policy, she is only entitled to liability coverage. The plaintiff also asserts that this dispute is subject to arbitration rather than judicial determination. I hold that this dispute is subject to judicial determination and that the plaintiff is entitled to $ 100,000 of underinsured motorist coverage and $ 10,000 of liability coverage.

 Background

 On May 23, 1986, the plaintiff, Alice Nonemacher, was severely injured in an automobile accident. The plaintiff was a passenger in a car driven by her husband, Milton Nonemacher, when he ran head-on into another vehicle. As a result of the accident, Mr. Nonemacher and two passengers of the other automobile were killed. Mrs. Nonemacher and the surviving occupants of the other vehicle suffered serious injuries.

 At the time of the accident, Mr. and Mrs. Nonemacher were named insureds on an automobile policy issued by Aetna. The policy covered three automobiles, and it had a $ 50,000 single liability limit and uninsured/underinsured limits of $ 50,000. Aetna paid $ 40,000 to the occupants of the other vehicle under the liability coverage. Aetna also offered $ 10,000 to Alice Nonemacher along with a release that would release only Mr. Nonemacher's estate. Alice Nonemacher did not accept the offer.

 Mrs. Nonemacher demanded tender of the underinsured motorist policy limits from Aetna, which Aetna refused. The plaintiff subsequently filed a petition to proceed by arbitration with the Court of Common Pleas of Philadelphia. Aetna removed the case to this court. Aetna also asserted a counterclaim seeking declaratory relief, asserting that Mrs. Nonemacher is not entitled to any underinsured motorist benefits. The parties have now filed cross-motions for summary judgment.

 Discussion

 Two issues are before this court: (1) whether this dispute is subject to arbitration rather than judicial determination; and (2) the amount of coverage that Aetna must provide to Mrs. Nonemacher. *fn1" Summary judgment is proper in this case because "there is no genuine issue as to any material fact." Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986). *fn2"

 1. Arbitrability.

 The plaintiff urges that this matter should proceed by arbitration. The relevant portion of the arbitration provision in the insurance policy provides:

 If we and a covered person do not agree:

 
1. Whether that person is legally entitled to recover damages from the owner or operator of an uninsured motor vehicle or underinsured motor vehicle; or
 
2. On the amount of payment which may be owed under this insurance; either party may make a written demand for arbitration in accordance with the provisions of the Pennsylvania Uniform Arbitration Act.

 This provision is essentially the same as the provision that the Court of Appeals interpreted in Myers v. State Farm Ins. Co., 842 F.2d ...


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