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AETNA CAS. AND SUR. CO., v. DEITRICH

October 16, 1991

AETNA CASUALTY AND SURETY COMPANY, PLAINTIFF,
v.
HARRY J. DEITRICH, ADMINISTRATOR OF THE ESTATE OF JUDY A. DEITRICH, DECEASED; AND JOANN M. DEITRICH, A MINOR, BY HARRY J. DEITRICH, HER PARENT AND NATURAL GUARDIAN, DEFENDANTS.



The opinion of the court was delivered by: Rambo, District Judge.

MEMORANDUM

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:

ARBITRATION

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. 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 ...


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