The opinion of the court was delivered by: Rambo, District Judge.
Judy A. Deitrich was killed in an automobile accident which
occurred on April 30, 1987. Deitrich was a passenger in an
automobile operated by Nancy Deiter. The Deiter vehicle was
attempting to turn left into the Deitrich driveway when the
Deiter vehicle was struck on the passenger side by an
automobile operated by George S. Kotkiewicz.
In July of 1987, the Deitrich estate settled with Deiter (an
insured of Allstate Insurance Company) for Allstate's policy
limits of $50,000. Deitrich was covered by Aetna Casualty and
Surety Company (Aetna) for underinsured motorist coverage.
Aetna did not give its written consent to the Deitrich estate
to accept the policy limits from Allstate. Recognizing that
$50,000 was inadequate to fully compensate the Deitrich estate,
a demand for underinsured motorist arbitration was filed.
Defendants formally demanded arbitration on July 10, 1990
when defendants' attorney appointed his clients' arbitrator. On
September 4, 1990, Aetna notified defendants' counsel of its
arbitrator. On August 2, 1991, counsel for Aetna requested that
the arbitration be stayed. On that same date Aetna filed a
declaratory judgment action in this court. Aetna claims that
the declaratory judgment action raises issues that fall outside
the arbitration provision and are properly before this court.
The Aetna policy providing uninsured motorists benefits reads
in relevant part:
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
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. In this
event, each party will select an arbitrator. The
two arbitrators will select a third. If they
cannot agree within 30 days, either may request
that selection be made by a judge of a court
having jurisdiction. . . .
Complaint, Exhibit C at 17-18.
In determining whether an issue must be submitted to
arbitration, the court must determine "`(1) whether the parties
entered into an agreement to arbitrate and (2) whether the
dispute comes within the ambit of that agreement.'" Myers v.
State Farm Ins. Co., 842 F.2d 705, 707 (3d Cir. 1988) (citing
Rocca v. Pennsylvania Gen. Ins. Co., 358 Pa. Super. 67, 70,
516 A.2d 772, 773 (1986), app. denied, 517 Pa. 594, 535 A.2d 83
(1987)). In the present case
there can be no dispute that the insurance policy contains an
arbitration provision. This court must determine whether the
issues raised by Aetna come within the scope of the arbitration
clause or are properly before this court.
Aetna claims that the exclusion found at part c, paragraph
A(2) of the policy forecloses defendants from asserting ...