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Rea v. Cincinnati Insurance Co.

United States District Court, W.D. Pennsylvania

August 22, 2014

JAMES P. REA and DEBRA P. REA, husband and wife, Plaintiffs,
v.
THE CINCINNATI INSURANCE COMPANY, Defendant.

MEMORANDUM OPINION

KIM R. GIBSON, District Judge.

I. Introduction

Currently pending in this action for declaratory relief are cross-motions for summary judgment (ECF Nos. 21, 24). The sole issue before the Court is whether the arbitration clause of the underinsured motorist provision of the insurance policy at issue requires the parties to resolve their dispute through arbitration. The Court finds that the unambiguous language of the contract does not require the parties to arbitrate their dispute, but permits a court of competent jurisdiction to resolve the parties' dispute. Accordingly, and for the reasons stated below, the Court will GRANT Defendant's motion for summary judgment (ECF No. 24) and will DENY Plaintiffs' motion for summary judgment (ECF No. 21).

II. Jurisdiction and Venue

The Court has diversity jurisdiction over this removal action pursuant to 28 U.S.C. §§ 1332(a) and 1441. Venue is proper under 28 U.S.C. § 1441(a).

III. Background

The instant dispute involves the interpretation of a motor vehicle insurance contract, which is a pure question of law for this Court to decide. Plaintiffs filed a complaint for declaratory judgment in the Court of Common Pleas of Blair County on January 15, 2013. Defendant removed the matter to this Court on January 28, 2013 ( See ECF No. I), and filed an answer to the complaint (ECF No. 3). On August 30, 2013, the parties filed cross-motions for summary judgment, along with concise statements of material facts, briefs in support, an appendix of exhibits, and responsive briefs. The parties have fully briefed the Court and this matter is now ripe for adjudication.

The following facts are not in dispute. On October 24, 2009, Plaintiffs were involved in a motor vehicle collision when an intoxicated driver, Luis Rivera-Campos, struck Plaintiffs' vehicle in a head-on collision. (ECF No. 22 ¶ 3). At the time of the collision, Plaintiff James Rea was driving the vehicle and Plaintiff Debra Rea was riding as a passenger in the back seat. ( Id. ¶ 3). Plaintiffs' vehicle-a 2009 Lexus ES 350-was owned by James Rea's employer, Mountain Research, LLC, and was insured under a business automobile policy issued by Defendant Cincinnati Insurance Company. ( Id. ¶ 4).

On January 4, 2011, Mr. Rivera-Campos's insurance carrier, Nationwide Insurance, offered the limits of its liability insurance coverage to Plaintiff James Rea, and Defendant consented to the proposed settlement, waiving its subrogation rights. ( Id. ¶ 5). Plaintiffs then made a claim against Defendant for underinsured motorist coverage benefits related to the injuries and damages arising from the collision. ( Id. ¶ 6).

Plaintiffs' underinsured motorist claim ("UIM" claim) was made pursuant to a business automobile coverage policy-Policy No. CAA 587 60 08 ("Policy"), under which Plaintiffs were defined as "Insureds"- that Defendant issued to Mountain Research, LLC, for the Lexus involved in the collision. ( Id. ¶¶ 7, 8). The Policy included an endorsement for "Pennsylvania Underinsured Motorists Coverage-Nonstacked." ( Id. ¶ 9). This endorsement included an arbitration clause, regarding the applicability of arbitration to resolve disagreements between Defendant and its insureds. ( Id. ¶¶ 10, 11). Plaintiffs made a claim pursuant to that endorsement and now seek to arbitrate a dispute with Defendant over their claim. ( Id. ¶2).

IV. Legal Standard

Summary judgment is appropriate only where there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a); Melrose, Inc. v. Pittsburgh, 613 F.3d 380, 387 (3d Cir. 2010). Issues of fact are genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); see also McGreevy v. Stroup, 413 F.3d 359, 363 (3d Cir. 2005). Material facts are those that will affect the outcome of the trial under governing law. Anderson, 477 U.S. at 248. The Court's role is "not to weigh the evidence or to determine the truth of the matter, but only to determine whether the evidence of record is such that a reasonable jury could return a verdict for the nonmoving party." Am. Eagle Outfitters v. Lyle & Scott Ltd., 584 F.3d 575, 581 (3d Cir. 2009). "In making this determination, a court must view the facts in the light most favorable to the nonmoving party and draw all inferences in that party's favor.'" Farrell v. Planters Lifesavers Co., 206 F.3d 271, 278 (3d Cir. 2000) ( quoting Armbruster v. Unisys Corp., 32 F.3d 768, 777 (3d Cir. 1994).

The moving party bears the initial responsibility of stating the basis for its motion and identifying those portions of the record that demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). If the moving party meets this burden, the party opposing summary judgment "may not rest upon the mere allegations or denials" of the pleading, but "must set forth specific facts showing that there is a genuine issue for trial." Saldana v. Kmart Corp., 260 F.3d 228, 232 (3d Cir. 2001) ( quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 n. 11 (1986)). "For an issue to be genuine, the nonmovant needs to supply more than a scintilla of evidence in support of its position - ...


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