Title: State Farm Mut. Auto. Ins. v. Williams
Citation: 392 A.2d 281, 481 Pa. 130
Docket Number: N/A
State: Pennsylvania
Issuer: Pennsylvania Supreme Court
Date: October 5, 1978

481 Pa. 130 (1978) 392 A.2d 281 STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, a corporation, v. Alfred WILLIAMS, an Individual, Appellant. Supreme Court of Pennsylvania. Argued March 7, 1978. Decided October 5, 1978. *131 *132 John C. Carlin, Jr., Mercer, Mercer, Carlin &amp; Scully, Pittsburgh, for appellant. *133 Harry W. Miller, Pittsburgh, for appellee. Before EAGEN, C.J., and O'BRIEN, ROBERTS, POMEROY, NIX, MANDERINO and LARSEN, JJ. O'BRIEN, Justice. This appeal is before the court on a petition for allowance of appeal from an order of the Superior Court which affirmed an order of the Court of Common Pleas of Allegheny County. The order of the Court of Common Pleas confirmed an arbitration award in favor of State Farm Mutual Automobile Insurance Company (State Farm), appellee. The award denied uninsured motorist insurance coverage to appellant, Alfred Williams. The facts in this case are undisputed and are as follows. On February 11, 1975, appellant, Alfred Williams, was driving his wife's 1970 Plymouth automobile when he was involved in an accident with a vehicle driven by an uninsured motorist. As a result of that accident appellant suffered unspecified physical injuries and damages. There is no dispute that the owner-operator of the uninsured vehicle was at fault. At the time of the accident appellant's wife, Patricia Williams, was insured by State Farm with the mandated uninsured motor vehicle coverage provisions. Also at that time, appellant was the titled owner of a 1973 Chevrolet truck, which was also insured by State Farm and the policy contained similar uninsured motorist provisions. Appellant filed a claim against State Farm under both his and his wife's uninsured motorist coverage. State Farm paid appellant the $10,000 limit under his wife's policy, but refused payment under his policy. Appellant requested arbitration to determine if he was entitled to any uninsured motorist coverage pursuant to his contract of insurance. The request for arbitration was granted and an arbitration hearing was held pursuant to conditions and requirements of the Act of April 25, 1927, P.L. 381, No. 248, § 1, 5 P.S. § 161-181 (hereinafter "the act of 1927"). *134 The arbitrator denied coverage for appellant. The basis of the denial of coverage was an exclusionary provision which stated in pertinent part: The arbitrator based his determination upon the Superior Court case of Nationwide Mut. Ins. Co. v. Ealy, 221 Pa.Super. 138, 289 A.2d 113 (1972) (allocatur denied). Appellant filed an exception to the arbitrator's award and the Court of Common Pleas of Allegheny County, pursuant to State Farm's motion, confirmed the arbitration award. Appellant appealed to Superior Court, which affirmed per curiam. He then petitioned this court for allowance of appeal, which was granted. The basis of this appeal is the contention that the Superior Court case of Ealy, supra, relied upon by the arbitrator, as well as by the Court of Common Pleas in confirming the award, is at variance with this court's decision in Harleysville M. Cas. Co. v. Blumling, 429 Pa. 389, 241 A.2d 112 (1968). The instant case arose from an arbitration award pursuant to the act of 1927, which contains two provisions affecting the scope of review that a court must use in determining appeals from arbitration awards. Section 10 of the act of 1927, 5 P.S. § 170 provides: Our review indicates that appellant's requested relief is cognizable under Subsection (d) of § 11, 5 P.S. § 171, which reads: In McDevitt v. McDevitt, 365 Pa. 18, 73 A.2d 394 (1950), this court stated: We therefore determine that the issue raised in this appeal is properly cognizable. Appellant argues that the arbitrator committed an error of law when he upheld the exclusionary clause of appellant's uninsured motorist coverage. We agree and reverse and remand for proceedings consistent with this opinion. The Pennsylvania uninsured motorists coverage provision provides: The legislature has provided that all motor vehicle liability insurance sold within the Commonwealth for vehicles registered or "principally garaged" in this Commonwealth must contain provisions to compensate the insured for damages incurred by the insured because of the conduct of an owner or operator of an uninsured motor vehicle, if such conduct causes bodily injury, sickness, disease and death. The uninsured motorist provision requires a determination *139 that the owner or operator of the uninsured motor vehicle is legal cause of the insured's physical injuries. The legislature has permitted two exceptions to the mandatory inclusion of uninsured motor vehicle protection: 1. P.U.C. or Interstate Commerce Commission certified vehicles designed for freight handling or certified as passenger conveyors; and 2. The owner and/or operator of a vehicle that hauls freight or transports passengers and whose employees are covered by the Pennsylvania Workmen's Compensation Act, Act of June 2, 1915 (P.L. 736), as amended, 77 P.S. § 1, et seq. The owner and/or operator of the above two classes of motor vehicles have the right to reject in writing the uninsured motorist protection. Where there exists a valid contract of insurance which contains uninsured motorist coverage, an insurance carrier is obligated to compensate the insured for damages inflicted upon the insured because of the conduct of the owner and/or operator of an uninsured motor vehicle except for three statutory exclusions. An insurance carrier is not obligated to compensate an insured within the ambit of the uninsured motorist provision for: 1. Property damage. 2. Bodily injury damages when the insured or his representative has without written consent of the insurance carrier settled or prosecuted to judgment any action against any person or persons liable for such injuries. 3. Any damage, the payment of which would be for the direct or indirect benefit of a workmen's compensation carrier or any person who would qualify as a self-insurer under any workmen's compensation law. The statute concludes by permitting insurance carriers to offer more favorable uninsured motorist protections. The above statute mandates a floor of minimum protection to be afforded to the owner/operator of a motor vehicle within the Commonwealth. The legislature has permitted *140 enhancement of that minimum protection, but we believe the statute does not permit a diminution of that protection below the statutory limits. The court in Harleysville, 429 Pa. at 395-96, 241 A.2d at 115, gave the following interpretative guide to the above statute: In Harleysville, this court interpreted the following "exclusionary" clause: The facts of Harleysville are as follows. Blumling, the appellant, was injured in an automobile accident with an uninsured motorist while driving a truck owned and insured by his employer, Lockhart Iron &amp; Steel Company. Lockhart's insurer was Travellers Insurance Company and its uninsured motorist coverage was $10,000. Blumling owned an automobile which was insured by Harleysville Mutual Casualty Company. Blumling's coverage also contained a $10,000 uninsured motorist provision. He sustained injuries which resulted in damages in excess of $10,000. After collecting $10,000 from Traveler's, Blumling filed a claim with his insurance company for the excess amount of unreimbursed damage. Harleysville denied coverage and sought a declaratory judgment of nonliability. The basis of Harleysville's denial of coverage was the above-quoted exclusionary clause. This court permitted the injured party to collect on his uninsured motorist coverage up to the amount of actual damages, when those damages exceeded the amount of uninsured motorist coverage of primary insurance of the motor vehicle involved in the accident. In the instant case, State Farm seeks to limit its liability under appellant's uninsured motorist provision by the following exclusionary clause in its policy: The above exclusion prohibits all recovery by the insured under his policy, if the injury was sustained while he occupied another motor vehicle owned by a resident of the house, and if that vehicle was not an insured vehicle under his policy. In Ealy, supra, the Superior Court upheld an exclusionary clause which permitted Nationwide Insurance Company to write non-cumulative, non-pyramiding uninsured motorist coverage for an insured who owns more than one vehicle. Ealy was the owner of five motor vehicles, all insured under separate policies. Ealy, the insured, and his wife were injured in an automobile accident with an uninsured motorist. No dispute existed as to the legal responsibility of the uninsured motorist. All the uninsured motorist provisions limits were $10,000 per person, $20,000 per accident. The Ealy injuries were in excess of $20,000. The rationale of the Superior Court in Ealy was: As discussed supra, we believe the legislative intent, as expressed in the words of the uninsured motorist statute and as interpreted in Harleysville, is clear. The insured may recover uninsured motorists benefits: 1. If the injured party paid the premiums of the policy and was the named insured; and 2. If the recovery under the second uninsured motorist coverage was limited to actual damages; and 3. If the recovery is not limited by the statutory exclusions. The language in Harleysville is applicable to the "household" exclusion in this case, as it was to the "excess insurance" exclusion in Harleysville. In the instant case, the record is devoid of any reference to the amount of actual damages, if any, in excess of the $10,000 already recovered by appellant under his wife's policy. Therefore, pursuant to § 11 of the act of 1927, the case is remanded to consider appellant's claim in light of Harleysville. Order of the Superior Court is reversed and the case is remanded for the appointment of a new arbitrator and for proceedings consistent with this opinion.