United States District Court, Middle District of Pennsylvania
March 23, 2000
LIBERTY MUTUAL INSURANCE COMPANY, PLAINTIFF,
WESLEY VENTIMIGLIA, ROSE VENTIMIGLIA, AND JASMINE MARIN, DEFENDANTS.
The opinion of the court was delivered by: Munley, District Judge.
Before the court for disposition is the defendants' motion for
stay of action pending arbitration. The plaintiff is Liberty
Mutual Insurance Company, and the defendants are Wesley
Ventimiglia, Rose Ventimiglia, and Jasmine Marin. The parties
have briefed their respective positions, and the matter is thus
ripe for disposition. For the following reasons, we shall dismiss
Prior to December 3, 1998, plaintiff issued an automobile
insurance policy to Defendants Wesley and Rose Ventimiglia. The
policy included uninsured motorist liability amounts of
$50,000.00 each person and $100,000.00 each accident. The policy
covered Defendant Jasmine Marin as she was a resident relative
(daughter) of Defendant Rose Ventimiglia.
On December 3, 1998, Jasmine Marin was allegedly abducted at
gun point after exiting the school bus and forced into the
abductor's automobile. She finally escaped by jumping out of the
vehicle after being driven around for a while. During the escape,
she suffered injuries. Defendant Marin filed an uninsured
motorist claim under the Ventimiglia's automobile insurance
policy with the plaintiff, to recover for her injuries. Plaintiff
refused to provide benefits for the injuries.
Defendants sought arbitration of the matter, and filed a
petition for appointment of an arbitrator in the Court of Common
Pleas of Monroe County on January 3, 2000. The Monroe County
Court ordered Liberty Mutual to respond to the petition within
On January 6, 2000, Liberty Mutual filed the instant
declaratory judgment complaint by which it seeks to have this
court find that it is not obligated to pay uninsured motorists
benefits to Defendant Marin. The defendants then filed the
instant motion to stay action pending arbitration.
While the defendants have not filed a motion to dismiss, we will
treat their motion as such because declaratory judgment actions
may be dismissed under Fed.R.Civ.Pro. 12(b)(6) where the dispute
is covered by an arbitration agreement. Nationwide Ins. Co. of
Columbus, Ohio v. Patterson, 953 F.2d 44, 45, n. 1 (3d Cir.
The defendants contend that pursuant to the arbitration clause
of the insurance policy at issue, the matter should be decided
through the arbitration process. The plaintiff disagrees and
contends that the matter should be decided before the United
States District Court. After a careful review, we are in
agreement with the defendants.
The insurance policy at issue provides as follows:
A. If we [plaintiff] and an "insured" do not agree:
1. Whether that "insured" is legally entitled to
recover damages; or
2. As to the amount of damages which are
recoverable by that "insured;" From the owner or
operator of a "uninsured motor vehicle" then the
matter may be arbitrated.
Either party may make a written demand for
arbitration. Arbitration shall be conducted in
accordance with the provisions of the Pennsylvania
Uniform Arbitration Act. 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
Arbitration shall not, however, be a means of
settlement should the dispute involve:
1. any form of inter- or intra-policy stacking, or
2. selection of a coverage option, or a waiver of
such coverage, or
3. determination of residency in defining who is or
is not an insured under this coverage, or
4. Statutes of limitations, or
5. Determination of whether a claimant is an
insured under these coverages.
B. Each party will:
1. Pay the expense it incurs; and
2. Bear the expense of the third arbitrator
Unless both parties agree otherwise, arbitration
will take place in the county in which the "insured"
lives. Local rules of law as to procedure and
evidence will apply. A decision agreed to by two of
the arbitrators will be binding.
Complaint Exhibit A
State law governs the substantive liabilities of the parties.
Nationwide Ins. Co. of Columbus, Ohio v. Patterson,
953 F.2d 44, 46 (3d Cir. 1991) (citing Erie Railroad Co. v. Tompkins,
304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938)). "Under
Pennsylvania law, the determination of whether an issue must be
submitted to arbitration depends on two factors: (1) whether the
parties entered into an agreement to arbitrate, and (2) whether
the dispute falls within the scope of that agreement." Id. at
46. The question presented in the instant case is whether the
dispute falls within the scope of the agreement. Any ambiguities
in the policy must be resolved against the insurance company.
Brennan v. General Accident Fire & Life Assurance, Corp.,
524 Pa. 542, 574 A.2d 580 (1990).
Plaintiff claims that the coverage issue presented by this
case, that is, whether Defendant Marin is entitled to uninsured
motorist benefits where she intentionally jumped out of a vehicle
to escape an abductor, does not fall within the above-quoted
arbitration clause. In its brief, the plaintiff proceeds to argue
the merits of whether Defendant Marin's injuries are covered by
the policy. This issue, of whether the insured defendant is
entitled to recover damages, however, is exactly the type of
matter which is discussed in
the arbitration clause. Arbitration may be utilized where the
issue is whether the insured is entitled to recover damages. That
is precisely the issue of this case. Plaintiff has raised no
contentions as to why this matter would not be covered by the
In a similar case, the Third Circuit Court of Appeals has
explained that ". . . the vast majority of district court
decisions applying Pennsylvania law have held that questions
concerning the extent of coverage under an insurance policy are
within the scope of an arbitration clause unless there is
language in the clause that explicitly excludes coverage issues
from the scope of arbitration." Nationwide, 953 F.2d at 47. In
that case, and in Brennan, supra, the language in the
arbitration clauses was quite similar to that in the instant case
as it allowed for arbitration whenever the insured and insurer
disagreed as to when a party was legally entitled to recover
damages.*fn1 A review of the explicit arbitration exclusions as
set forth in the policy, reveals that the instant matter is not
excluded from arbitration. As the matter falls within the
arbitration clause, we will dismiss the plaintiff's declaratory
judgment action to allow the parties to proceed under the
appropriate arbitration procedures. An appropriate order follows.