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Sperazza v. State Farm Mutual Automobile Insurance Co.

February 6, 2006

DAL SPERAZZA AND EUGENE SPERAZZA, HER HUSBAND, PLAINTIFFS,
v.
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, DEFENDANT.



The opinion of the court was delivered by: A. Richard Caputo United States District Judge

MEMORANDUM

Before me is Motion of the Petitioners, Dal Sperazza and Eugene Sperazza for Remand to the Court of Common Pleas of Luzerne County. (Doc. 8.) The motion seeks to remand a Petition for Appointment of a Neutral Arbitrator which was timely removed by the Defendant, State Farm Mutual Automobile Insurance Company ("State Farm").

The parties do not question the elements of diversity jurisdiction, i.e. diverse citizenship and the amount in controversy. Rather, the dispute centers on the language of the policy and the effect of the agreed upon (in the policy) applicability of the Uniform Arbitration Act of 1927, P.L. 381, No. 248, 5 P.S. § 160, et seq.

DISCUSSION

Plaintiff, Dal Sperazza, was in an auto accident on July 19, 2004. Plaintiffs had the subject automobile insurance policy issued by State Farm which had underinsurance coverage as well as a method to resolve disputes concerning such coverage.

The policy (Ex. D to Doc. 80) provides for dispute resolution as follows:

Two questions must be decided by agreement between the insured and us.

1. Is the insured legally entitled to collect compensatory damages from the owner or driver of an uninsured motor vehicle or underinsured motor vehicle; and

2. If so, in what amount?

If there is no agreement, these two questions shall be decided by arbitration at the request of the insured or us. The arbitrators' decision shall be limited to these two questions. The arbitrators shall not award damages under this policy which are in excess of the limits of liability of the coverage as shown on the declarations page. The Pennsylvania Arbitration Act of 1927 shall apply.

Each party shall select a competent arbitrator. These two shall select a competent and impartial third arbitrator. If unable to agree on a third one within 30 days, either party may request a judge of a court of record in the county in which the arbitration is pending to select a third one. The written decision of any two arbitrators shall be binding on each party.

The Act of 1927, 5 P.S. § 163 provides, in part:

The party aggrieved by the alleged failure, neglect, or refusal of another to perform under a written agreement for arbitration, may petition the court of common pleas of the county having jurisdiction for an order to show cause why such arbitration ...


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