Court Opinion

ID: 9750404
Source: CourtListenerOpinion
Date Created: 2023-08-28 14:56:50.604669+00
Date Added: 2024-06-11T07:26:08.973636
License: Public Domain

ZAPPALA, Justice,
dissenting.
I would hold that the insured’s claim of negligence and/or intentional misrepresentation of Nationwide Insurance Company’s agent relating to the procurement of additional coverage is not an arbitrable issue under the arbitration provision of this policy. For this reason, I would modify the arbitrator’s award to reflect the stated policy amounts for uninsured motorist coverage — a total of $60,000. As to the claim of negligent and/or fraudulent misrepresentation by the agent, I would hold that jurisdiction over the claim properly lies with the. court of common pleas.
The question of whether a dispute is within the terms of an arbitration agreement is for the court to determine, as *234arbitrators have no power to determine the extent of their jurisdiction. Flightways Corporation v. Keystone Helicopter Corporation, 459 Pa. 660, 331 A.2d 184 (1975). Such agreements are to be strictly construed and should not be extended by implication. Jacob v. Weisser, 207 Pa. 484, 56 A. 1065 (1904); Hassler v. Columbia Gas Transmission Corporation, 318 Pa.Super. 302, 464 A.2d 1354 (1983).
The insurance policy in this case provided that the arbitrable issues would extend to disputes relating to an insured’s right to recover damages or to the amount of damages. Allegations of negligent and/or intentional misrepresentations of an agent in obtaining additional coverage are obviously beyond the scope of the arbitrators’ authority under this policy. Such allegations require the arbitrators to consider evidence outside the stated coverage limits of the policy itself.
Where the parties have clearly agreed to arbitrate matters, then every reasonable effort should be made to enforce such an agreement. This will effectuate the unmistakable intent of the parties. In compelling the parties in this case to arbitrate an issue, absent an agreement between them to arbitrate that issue, the Superior Court erred. The Superior Court’s perceived justification for allowing the arbitrators to decide the issue of misrepresentation and to compensate the insured for an agent’s acts is judicial economy. Economy may not be sought, however, at the expense of justice. The Superior Court’s holding deprives litigants of their right to proceed before our courts in instances where arbitration was not contemplated.
Subsequent to its decision in this case, the Superior Court again addressed the identical issue in Ostroff v. Keystone Insurance Company, 357 Pa.Super. 109, 515 A.2d 584 (1984). In Ostroff, the arbitration clause was similar to that presented herein and stated, “If we and a covered person disagree whether that person is legally entitled to recover damages from the owner or operator of an uninsured motor vehicle ... either party.may make a written demand for arbitration.” Interpreting this provision, the Superior Court stated,
*235Therefore, the question before us is whether the arbitrators only had authority to interpret the terms of the policy itself or whether they also had authority to consider external evidence of fraud and misrepresentation and, if finding such evidence to be credible, in effect enlarge the coverage provided by the terms of the policy. We believe that the arbitrators were limited to interpreting the terms of the policy and that consideration of tort theories to enlarge the coverage limited on the face of the policy was improper.
357 Pa.Super. at 116-118, 515 A.2d at 588.
I agree with the Superior Court’s analysis in Ostroff and would apply it to the present case. Confronted with its conflicting analysis in this case, the Superior Court attempted to distinguish it on the basis that the appellants in Ostroff had continually sought arbitration on the terms of the policy itself. This is a distinction without a difference.
The Superior Court’s attempted distinction defies the principle of law that the parties cannot confer jurisdiction upon a forum. To the extent that the Superior Court’s disparate treatment of Ostroff and the parties before us is based upon the parties’ theory of their case, it is improper. More likely, however, the Superior Court’s decision in Ostroff was intended to avoid perpetuation of the error made in this case. With that action, I heartily concur and would consistently apply that analysis to this case.