Opinion ID: 1976701
Heading Depth: 1
Heading Rank: 1

Heading: standard of review

Text: Appellants first contend that the lower court erred because it reviewed the arbitration decision pursuant to principles of common law arbitration rather than statutory arbitration. [1] Preliminarily, we note that [i]t is always open to contracting parties to provide for statutory, rather than common law, arbitration. Allstate Ins. Co. v. Fioravanti, 451 Pa. 108, 116 n. 6, 299 A.2d 585, 589 n. 6 (1973). An important difference between the two types of arbitration is that statutory arbitration is subject to much broader judicial review than is common law arbitration. Cf. Obdyke v. Harleysville Mutual Ins. Co., 299 Pa.Super. 298, 301, 445 A.2d 763, 765 (1982) (construing Pennsylvania Arbitration Act of 1927). [2] Here, the car accident in which appellants were injured occurred on December 12, 1984. The insurance policy issued by appellee was in effect from September 22, 1984 until September 22, 1985. See R.R. at 39a. The policy provided that if either party demanded arbitration to resolve a dispute regarding uninsured motorist coverage, the arbitration shall be conducted in accordance with the Pennsylvania Arbitration Act of 1927. See Insurance Agreement at 9, R.R. at 118a. In addition, the parties stipulated that the arbitration proceeding was a statutory arbitration under Act 27. N.T. November 6, 1986 at 35. Although the Act of 1927 was repealed and replaced by the Act of 1980 (codified at 42 Pa.C.S.A. §§ 7301-7362), the current statute contains provisions that govern agreements to arbitrate under the prior Act. Thus, section 501(b) of the 1980 Act provides, in relevant part, that, (b) The provisions of 42 Pa.C.S. § 7302(d)(2) (relating to special application) shall be applicable to any nonjudicial arbitration pursuant to:       (2) An agreement heretofore or hereafter made which expressly provides for arbitration pursuant to the former provisions of the Act of April 25, 1927 . . ., relating to statutory arbitration. Act of 1980, Oct. 5, P.L. 693, No. 142 (codified as the Historical Note to 42 Pa.C.S.A. § 7302(d)(2)) (emphasis added). Section 7302(d)(2), in turn, provides the following standard of review: (2) [A] court in reviewing an arbitration award pursuant to this subchapter shall, notwithstanding any other provision of this subchapter, modify or correct the award where the award is contrary to law and is such that had it been a verdict of a jury the court would have entered a different judgment or a judgment notwithstanding the verdict. Id. See also Ragin v. Royal Globe Ins. Co., 315 Pa.Super. 179, 184, 461 A.2d 856, 858 (1983) (under § 7302, arbitration award may be vacated when award was due to egregious mistake of law on part of arbitrators); id., 315 Pa.Superior Ct. at 184-85, 461 A.2d at 859 (In order to establish legal order within the arbitration process, courts must refuse to sanction monetary awards which are contrary to law, inequitable, unjust, or the apparent result of prejudice on the part of the arbitrators.). In light of the agreement between the parties and the provisions of the 1980 Act quoted above, we hold that the contrary to law scope of review should have been applied by the lower court.