Court Opinion

ID: 2769704
Source: CourtListenerOpinion
Date Created: 2015-01-13 23:07:11.060994+00
Date Added: 2024-06-11T11:13:37.882798
License: Public Domain

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                              2015 Pa. Super. 6

STATE FARM MUTUAL         AUTOMOBILE : IN THE SUPERIOR COURT OF
INSURANCE COMPANY,                   :      PENNSYLVANIA
                                     :
                  Appellee           :
                                     :
            v.                       :
                                     :
BARISHA DILL,                        :
                                     :
                  Appellant          : No. 3120 EDA 2012

          Appeal from the Judgment entered December 19, 2012,
              Court of Common Pleas, Philadelphia County,
              Civil Division at No. March Term, 2012, 1370

BEFORE:     BENDER, P.J.E., BOWES, PANELLA, DONOHUE, SHOGAN, ALLEN,
            LAZARUS, WECHT and STABILE, JJ.

CONCURRING OPINION BY DONOHUE, J.:               FILED JANUARY 13, 2015

      I join the Majority opinion, as I agree that this Court may not consider

claims of error that were not raised before the arbitration tribunal at a time

when the errors could have been corrected and any prejudice mitigated.

Tindall v. Friedman, 970 A.2d 1159, 1174 (Pa. Super. 2009); Donegal

Ins. Co. v. Longo, 610 A.2d 466, 468 (Pa. Super. 1992). For the reasons

set forth in the Majority opinion, the Appellant waived the claims now

presented on appeal.

      I write separately to disavow any suggestion that but for our finding of

waiver, I would conclude that the arbitrator selected by State Farm (Kevin

McNulty, Esq.) was disqualified to serve as an arbitrator in this case.

Pursuant to section 7305 of the Uniform Arbitration Act, if “the agreement to
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arbitrate prescribes a method of appointment of arbitrators, the prescribed

method will be followed.” 42 Pa.C.S.A. § 7305. In this case, the agreement

specifies that “each party shall select a competent arbitrator,” and that

these two “shall select a competent and impartial third arbitrator.” State

Farm Mutual Automobile Insurance Policy, at 20 (emphasis added).         The

issue presented here, then, is one of contract interpretation, namely what

constitutes a “competent arbitrator” under this agreement, and how (if any)

the description of the neutral third arbitrator as both “competent and

impartial” shapes this determination. But for the waiver of this issue, this

Court would have been tasked to glean the mutual intentions of the parties

regarding the phrase “competent arbitrator” to decide whether Attorney

McNulty’s prior involvement in the third party action disqualified his

participation as a “competent arbitrator” in this case.

      This issue appears to be one of first impression for Pennsylvania

appellate courts. In Longo, this Court ruled that an arbitrator’s undisclosed

attorney-client relationship with one of the parties rendered him unqualified

to serve as an arbitrator, but the agreement in that case regarding the

selection of arbitrators did not include any of the “competent” and

“impartial” language at issue here.    Longo, 610 A.2d at 467-68 (“[E]ach

party will select an arbitrator” and these “two arbitrators will select a

third.”). In Sheehan v. Nationwide Ins. Co., 779 A.2d 582 (Pa. Super.),

appeal denied, 792 A.2d 1254 (Pa. 2001), this Court held that the individual

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selected to be the third arbitrator was competent to serve in that role even

though he had been an associate in a law firm that had represented one of

the parties 23 years previously. Id. at 585. Again, however, the relevant

language in Sheehan differed from that presented here, as the agreement

there provided only that each party would select “an arbitrator” and that

those two would “select a third competent arbitrator.” Id. at 584.

      The contract language in the present case, pursuant to which the

parties each selected a “competent arbitrator” and those two arbitrators

selected a “competent and impartial” third arbitrator, suggests some

distinction between competence and impartiality.          In other words, the

parties here may have agreed that only the third arbitrator (the neutral)

needed to be entirely free of any prior associations or other hint of partiality.

If so, the competence of the two arbitrators selected by the parties would be

judged by some lesser standard (e.g., a more general ability to determine

fairly the merits of the controversy before them). I note, for instance, that

the Uniform Arbitration Act repeatedly distinguishes between ordinary

arbitrators (like McNulty) and those appointed to act as “neutrals.”        See,

e.g., 42 Pa.C.S.A. § 7314(a)(ii) (“[T]he court shall vacate an award where:

… there was evident partiality by an arbitrator appointed as a neutral or

corruption or misconduct in any of the arbitrators prejudicing the rights of

any party.”) (emphasis added); id. at § 7307(a)(5) (“If, during the course of

the hearing, an arbitrator for any reason ceases to act, the remaining

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arbitrator or arbitrators appointed to act as neutrals may continue with

the hearing and determine the controversy.”) (emphasis added).

      Because the issue presented is one of contract interpretation, I

disagree with the view of the Dissent that Rule 1302 of the Pennsylvania

Rules of Civil Procedure has any application here.     Per Rule 1301 and 42

Pa.C.S.A. § 7361, Rule 1302 governs only in connection with compulsory

court arbitration of civil cases below a dollar amount fixed by local rule.

Pa.R,C.P. 1301; 42 Pa.C.S.A. § 7361.       In compulsory arbitration, by rule

(Rule 1302(b)) arbitrators are appointed from a list of members of the bar,

and their qualifications are thus also set by rule (Rule 1302(e)).      In this

case, in significant contrast, the arbitrators were selected in accordance with

the agreed-upon terms of the insurance policy (as described hereinabove),

and the qualifications of the arbitrators selected must be determined by

those same terms. Given that the issue was not preserved for review, the

interpretation of the insurance contract must await another case.

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