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COMMONWEALTH PENNSYLVANIA v. PRUDENTIAL PROPERTY AND CASUALTY INSURANCE COMPANY AND BARBARA JOHNSON (08/10/89)

COMMONWEALTH COURT OF PENNSYLVANIA


decided: August 10, 1989.

COMMONWEALTH OF PENNSYLVANIA, DEPARTMENT OF PUBLIC WELFARE, PLAINTIFF,
v.
PRUDENTIAL PROPERTY AND CASUALTY INSURANCE COMPANY AND BARBARA JOHNSON, DEFENDANTS

ACTION FOR DECLARATORY JUDGMENT (WITH NOTICE TO PLEAD).

COUNSEL

Jason W. Manne, Asst. Counsel, Pittsburgh, for plaintiff.

John E. Quinn, Evans, Rosen, Portnoy, Quinn & Donohue, Pittsburgh, for Barbara Johnson.

Peter B. Skeel, John C. Bogut, Jr., Pittsburgh, for Prudential Property and Cas. Co.

Barry and McGinley, JJ., and Narick, Senior Judge.

Author: Mcginley

[ 128 Pa. Commw. Page 611]

This is an action for declaratory judgment brought by the Commonwealth of Pennsylvania, Department of Public Welfare (DPW) in our original jurisdiction.*fn1 Barbara Johnson (Johnson) has filed preliminary objections asserting that DPW lacks capacity to sue and that the doctrine of lis pendens is applicable. The preliminary objections are before us at this time.

[ 128 Pa. Commw. Page 612]

On September 28, 1987, Johnson was involved in a motor vehicle accident when the vehicle in which she was riding left the roadway and struck a guardrail. As a result of the accident, Johnson suffered severe injuries requiring extensive medical care and treatment. DPW, through its medical assistance program paid a portion of the bills incurred by Johnson because Johnson's first party benefits, provided by Prudential Property and Casualty Insurance Company (Prudential), were insufficient to meet all the bills. In addition, under the same Prudential policy, Johnson had uninsured motorist coverage with policy limits of $25,000 per person/per accident. DPW alleges in its complaint that Prudential is willing to tender the $25,000 on Johnson's uninsured motorist claim but that DPW and Johnson are unable to agree as to their respective rights to the monies.*fn2 DPW contends that it is entitled to its full claim for reimbursement in the amount of $20,150.79.

Initially, Johnson argues that in order for the DPW to properly pursue a statutory cause of action for reimbursement of medical benefits DPW must first request the Attorney General to bring suit against the defendant*fn3 and that an action for reimbursement for medical benefits can

[ 128 Pa. Commw. Page 613]

    only be brought by the Commonwealth of Pennsylvania with the Attorney General instituting suit for the Commonwealth.*fn4 Specifically, Johnson seeks to establish DPW's failure to request the Attorney General to bring suit on the basis that the authorization of the Attorney General is neither apparent on the face of the complaint nor specifically pled. However, the complaint is verified by an attorney for the Commonwealth of Pennsylvania who states he is authorized to verify the complaint. Rule 205.1 of the Rules of Civil Procedure relevantly provides that the signature of an attorney on a paper constitutes a certification of authorization to file it. Additionally, the complaint is clearly brought in the name of the Commonwealth as required by Pennsylvania Rules of Civil Procedure 2102(a) and no defect appears.*fn5 Pennsylvania Liquor Control Board v. Rapistan, 472 Pa. 36, 371 A.2d 178, n. 10 (1976).

Secondly, Johnson argues that her initiation of an arbitration proceeding pursuant to her liability insurance policy is a prior action prohibiting DPW from pursuing declaratory action. Johnson argues that DPW's only recourse is to either intervene in the arbitration proceeding or initiate its own action directly against the insurer. We again disagree.

[ 128 Pa. Commw. Page 614]

In the present case, the duty to arbitrate arises solely out of the contract of insurance between Johnson and Prudential. DPW is not a party to that contract and is not obligated to arbitrate its claim. Although policy favors arbitration as a method of settling disputes, arbitration is a matter of contract, and it cannot be compelled between parties who have not contracted to arbitrate a particular dispute. Johnson v. National Insurance Companies, 384 Pa. Superior Ct. 92, 557 A.2d 789 (1989). Therefore, Johnson has no legal right or authority to bind DPW, an unrelated third party, to arbitrate its claim.*fn6 Id. Further, the May 17, 1989, order discharged Prudential from any further liability to DPW and Johnson. (See footnote 2.) DPW and Johnson are the only remaining parties making claim on the policy limits paid into court. Therefore, there is no pending action*fn7 which bars DPW's request for declaratory relief.

[ 128 Pa. Commw. Page 615]

Section 7541(a) of the Declaratory Judgments Act (DJA), 42 Pa.C.S. § 7541(a) provides that it is remedial legislation and its purpose is to "settle and to afford relief from uncertainty and insecurity with respect to rights, status, and other legal relations, and is to be liberally construed . . . ." Spooner v. Secretary of the Commonwealth Page 615} of Pennsylvania, 114 Pa. Commonwealth Ct. 352, 539 A.2d 1 (1988). Further in Spooner we noted:

Section 7533 of the DJA, 42 Pa.C.S. § 7533 provides in relevant part '[a]ny person . . . affected by a statute, [or contract] . . . may have determined any question of construction or validity arising under the . . . statute [or contract] . . . and obtain a declaration of rights, status, or other legal relations thereunder.' Section 7537 of the DJA, 42 Pa.C.S. § 7537 provides that '[t]he court may refuse to render . . . a declaratory judgment . . . where such judgment . . . would not terminate the uncertainty or controversy giving rise to the proceeding . . . .'

Id., 114 Pa. Commonwealth Ct. at 357-358, 539 A.2d at 3.

In the present case there exists a current and ongoing controversy as to whether DPW or Johnson is entitled to the proceeds of the policy. The declaratory relief requested would end that controversy.

Accordingly, Johnson's preliminary objections are overruled.

Order

AND NOW, this 10th day of August, 1989, the preliminary objections of Respondent Barbara Johnson are overruled.

Respondent shall file a responsive pleading within thirty (30) days of this order.

Order

Per Curiam.

AND NOW, October 3, 1989, it is ORDERED that the above-captioned opinion filed August 10, 1989, shall be designated OPINION rather than MEMORANDUM OPINION, and it shall be reported.

Disposition

Accordingly, Johnson's preliminary objections are overruled.


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