Court Opinion

ID: 4962506
Source: CourtListenerOpinion
Date Created: 2021-09-24 15:18:13.834536+00
Date Added: 2024-06-11T08:15:54.279919
License: Public Domain

CONCURRING OPINION BY
JOYCE, J.:
¶ 1 I concur in the result reached by the Majority. I write separately to address an issue that warrants further discussion.
¶ 2 In an underinsured motorists (UIM) arbitration, the arbitrators determine the total damages suffered by a claimant. Generally, neither the underlying liability limits nor the UIM limits are revealed to the arbitrators before damages are determined. That was the case in the UIM proceedings at issue here. Inherent in the process is an expectation that, regardless of the arbitrators’ award, the maximum recovery will be the policy limits. See Browne v. Nationwide Mut. Insurance *921Company, 713 A.2d 663 (Pa.Super.1998) (an insurer’s obligation to its insured is capped by the applicable policy limits).3
¶ 3 An arbitration award in excess of UIM limits is not comparable to a jury award in a tort action in an amount that exceeds the liability limits. In the tort action, the injured party can recover the limits under the policy and then pursue the tortfeasor personally for any damages exceeding the available limits. By contrast, a UIM claim is purely a matter of contract. When Appellee, Dianna Vogt, entered into her contract with Liberty Mutual for automobile insurance, she elected to purchase UIM coverage in the amount of $15,000 per person and $30,000 per accident. Whether her damages were $15,000 or $15 million, the most Liberty Mutual should be obligated to pay under the terms of the contract is her $15,000 limit of UIM coverage. To hold otherwise renders the selection of limits meaningless.
¶ 4 The Majority notes that the arbitration in this case was common law arbitration.4 As this Court has recognized, “[t]he review of a common law arbitration award is narrowly circumscribed.” F.J. Busse Co., Inc. v. Sheila Zipporah, L.P., 879 A.2d 809, 811 (Pa.Super.2005); see also Richmond v. Prudential Property and Casualty Insurance Company, 856 A.2d 1260 (Pa.Super.2004) (en banc).
¶ 5 A challenge to a common law arbitration award must be made within thirty days of the award. See Hall v. Nationwide Mut. Ins. Co., supra, 427 Pa.Super. 449, 629 A.2d 954, 957 (1993). As noted above, the grounds for the challenge are greatly restricted. As set forth in the statute, the only recognized bases for vacating or modifying the award are denial of a hearing or “fraud, misconduct, corruption or other irregularity causfjng] the rendition of an unjust, inequitable or unconscionable award.” 42 Pa.C.S.A. § 7341.5 Absent a challenge, a party may petition the court to enter an order confirming an award, and to enter a judgment or decree in conformity with that order. 42 Pa.C.S. § 7342(b) (Confirmation and judgment).
¶ 6 Clearly, Liberty Mutual did not mount a challenge to the award. However, I do not read Liberty Mutual’s argu*922ment on appeal as contending the arbitrators’ award itself is unjust, inequitable or unconscionable. Rather, I construe its position to be simply that it should not be required to pay more than the limits of UIM coverage purchased by Vogt. Under that scenario, I believe that the appropriate course on remand would involve Vogt’s presentation of an application to confirm the award and enter judgment in her favor, followed by Liberty Mutual’s response with confirmation of the UIM limits purchased by Vogt. The court would then confirm the arbitrators’ award of $75,000, and enter judgment in the amount of $15,000, the policy limits that Vogt herself acknowledges as the coverage purchased.6 This would not constitute molding or changing the award. The award would be confirmed in the amount appearing on the arbitrators’ award (“The majority finds in favor of the Plaintiff [sic] in the Amount of $75,000.00”). At the same time, the ultimate judgment entered against Liberty Mutual in the amount of the $15,000 UIM limits would reflect the agreement of the parties to the contract.7 Only in this way can the integrity of the contract be preserved.8

. Liberty Mutual's expectation that its maximum obligation was $15,000 is evidenced by its tendering of the policy limits by check dated September 2, 2003, under cover of letter dated September 3, less than a week after the issuance of the arbitration award. By letter dated September 12, Vogt's counsel returned the check and, for the first time, asserted that Liberty Mutual owed Vogt $50,000, i.e., the $75,000 awarded by the arbitrators, less the $25,000 recovered from the tortfeasor’s policy.

. The Majority contends that the arbitration in this case was common law arbitration in accordance with language found on pages 13 and 14 of the Liberty Mutual policy. Document 28, Exhibit 1, in the certified record. I note that Part C of the policy — attached to Document 28 as Exhibit 1 — includes uninsured motorists ("UM”) coverage only. While the declarations page for the policy reveals that the policy included a UIM endorsement, the endorsement itself is not part of the record. My comments are based on the presumption that the UIM endorsement was silent as to the type of arbitration agreed to, thereby invoking common law arbitration, as was the case in the policy’s UM provisions.

.The statutory provisions relating to common law arbitration are set forth in 42 Pa.C.S. §§ 7341-7342. Pursuant to 42 Pa.C.S. § 7342, certain provisions of the Uniform Arbitration Act, 42 Pa.C.S. §§ 7301-7320, apply to common law arbitration. However, Sections 7311 (Change of Award by arbitrators), 7314 (Vacating award by court), and 7315 (Modification or correction of award by court) are not among them. Therefore, those opportunities for review of arbitration awards pursuant to the Uniform Arbitration Act are not available under common law arbitration.

. See Document 10 (Vogt's Answer to Liberty Mutual's Petition to Strike) at ¶ 2 ("It is admitted that [Liberty Mutual] issued a policy of automobile insurance to [Vogt], Vogt’s policy contained coverage limits for UIM in the amount of $15,000 per person and $30,000 per accident.”).

. Although Vogt’s counsel sought entry of judgment in the amount of $75,000, even he does not suggest that Vogt is entitled to recover the full amount of the $75,000 award from Liberty Mutual. "Since [Vogt] recovered $25,000 from the tortfeasor, the net amount owed to her is $50,000.” Document 10, Exhibit A, in the certified record; "Therefore, this judgment remains open and valid in the amount of $75,000. Liberty Mutual is entitled to a credit for the $25,000 that [Vogt] received from the tortfeasor ....” Document 6, Exhibit C. Reducing the amount of the judgment to reflect the UIM limits purchased does not constitute "molding” the award any more so than reducing the judgment by giving a credit for the underlying BI limits.

.I do not find this result to be in conflict our Supreme Court's rulings in Borgia v. Prudential, 561 Pa. 434, 750 A.2d 843 (2000), Runewicz v. Keystone Ins. Co., 476 Pa. 456, 383 A.2d 189 (1978), or Freeman v. Ajax Foundry Products, Inc., 398 Pa. 457, 159 A.2d 708 (1960). In each of those cases, when the Court referred to confirming arbitration awards even if the result would require altering terms of the contract, the Court was not referring to coverage amounts. Rather, the Court was referring to arbitration awards based on policy language governing disputed coverage issues. I find that situation readily distinguishable from the situation present here, where Vogt is attempting to recover an amount greater than the limits of coverage she admits she purchased under the policy.