Davis v. Erie Insurance Group

12 Pa. D. & C.4th 459, 1991 Pa. Dist. & Cnty. Dec. LEXIS 101
Pennsylvania Court of Common Pleas, Lackawanna County·Decided October 24, 1991·No. no. 86 Equity 38·Published

Opinion

MÜNLEY, J.,

— Before the court for disposition is plaintiff’s motion for delay damages pursuant to Pa.R.C.P. 238.

The facts of this case reveal that on March 24, 1985, plaintiff sustained injuries as a result of an automobile accident. The insurance company for the tortfeasor was Allstate Insurance Company. On or about October 1, 1986, Allstate paid the $50,000 policy limits in full to plaintiff in exchange for a general release.

At the time of the accident, Ms. Davis had her own automobile insurance coverage with defendant, Erie Insurance. Defendant paid plaintiff’s medical bills, but alleged that said insurance policy did not include underinsurance coverage. On June 9, 1986, plaintiff commenced this action seeking declaratory relief to determine whether the liberalization clause of the automobile policy issued to Gail Davis by Erie Insurance Company automatically enlarged such policy to include underinsurance under the terms of the MVFRL. On September 28, 1988, an arbitration panel issued a decision denying plaintiff’s request for underinsurance. Subsequently, a petition to vacate the arbitrator’s award was filed by plaintiff. Judgment was entered on the court’s opinion and order on January 8, 1990, sustaining the appeal and awarding the plaintiff underinsured motorist benefits in the amount of $15,000.

The decision of this court was appealed to the Superior Court and on December 19, 1990, the Superior Court affirmed our opinion and order. [461]*461Davis v. Erie Insurance Group, 400 Pa. Super. 345, 583 A.2d 819 (1990). The defendants then petitioned the Supreme Court for allocatur. The defendant’s petition for allowance of appeal was denied by the Supreme Court on August 8, 1991. (no. 95 E.D., Allocatur Docket 1991.) A motion for delay damages was filed on January 12, 1990. An evidentiary hearing was held before this court on September 30, 1991, on the issue of delay damages.

Pursuant to Pa.R.C.P. 238, delay damages may be assessed in a civil action. An award or verdict must be made against the defendant for compensatory damages before Rule 238 may be applied. Defendant opposes plaintiff’s request for delay damages alleging that no award or verdict was entered against defendant in the matter sub judice. Thus, defendant posits that the case should be remanded to the arbitrators for an award. We disagree.

The crux of this issue is the interpretation of the court’s opinion and order of January 8, 1990. This court vacated the award of the arbitrators and interpreted the terms and provisions of the policy in-question to include underinsurance coverage in the amount of $15,000. “Our review of the relevant case law convinces us that underinsurance motorist coverage falls within the provision of the liberalization clause, and thus we conclude plaintiff had underinsurance coverage of $15,000 at the time of the accident.” “Now to wit, January 8, 1990, the plaintiff’s appeal from the arbitrator’s decision is suS-. tained and underinsurance in the amount of $15,000 is available to the plaintiff, for the reasons set forth above.” Davis v. Erie Insurance Group, 86 Equity 38 (Pa. Lacka. C.P., Jan. 8, 1990). (emphasis supplied)

The Uniform Arbitration Act allows the court to review, modify or correct an award of arbitrators. [462]*462Greenspan v. U.S. Automobile Assoc., 324 Pa. Super. 318, 471 A.2d 856 (1984). It was the intent of this court to vacate the arbitrator’s award and enter judgment for the plaintiff in this case. “There is simply no provision in the rule [Rule 238] sanctioning the entry of delay damages by a tribunal other than the one that issued the verdict, award or decision.” Our order explicitly stated that $15,000 “is” available to the plaintiff, not “may be” available as defendant states in his brief. Accordingly, we find that an award of $15,000 in favor of the plaintiff has been entered in this case.

Finally, defendant argues that Rule 238 damages may not be assessed in a proceeding involving underinsurance arbitration. Defendant cites Erie Insurance Exchange v. McGee, 327 Pa. Super. 56, 474 A.2d 1171 (1984) and Greenspan v. United Services Automobile Association, 324 Pa. Super. 315, 371 A.2d 856 (1984), in support of this position. However, the holdings of both Greenspan and McGee state that common law arbitration decisions which are not attacked as resulting from an irregularity, or as unconstitutional or against public policy, may not be modified or corrected by another tribunal. In the instant case, we are governed by the Uniform Arbitration Act, 142 Pa.C.S. §7301 et seq., not common law arbitration. The Uniform Arbitration Act has a different standard of review than does common law arbitration and allows the court to review, modify or correct an award of the arbitrators. Thus, under the circumstances, this court has the power to modify a Uniform Arbitration Act award and subsequently assess delay damages. We further note that under-insurance arbitration claims are not specifically excluded by Rule 238, although other enumerated claims are. See Rule 238(e). More importantly, the [463]*463award in this case arose from the decision of this court and this is within the ambit Rule 238.

We can now address the question of awarding delay damages. There are two periods of time to be excluded from the calculation of delay damages: “(1) any period of time after which the defendant has made a written offer of settlement, the offer is continued in effect for at least 90 days or until commencement of the trial, whichever first occurs, the offer is rejected by the plaintiff and the plaintiff does not recover more than 125 percent of the offer and (2) any periods of time during which the plaintiff caused delay of the trial.” King v. SEPTA, 383 Pa. Super. 420, 557 A.2d 11 (1989). The burden is on the defendant to prove that the plaintiff delayed the trial.

We submit plaintiff’s petition for delay damages in this case is meritorious. First, the record reveals that defendant did not fender any settlement offer prior to the exhaustion of appeals. After the Supreme Court denied allocatur in this case, defendant orally offered to the plaintiff the sum of $15,000 to settle the case. Plaintiff testified to this at the evidentiary hearing: “Absolutely and unequivocally we have received no offer [prior to trial] whatsoever of settlement.”

In determining whether the defendant was reasonable in refusing to offer an amount that the evidence establishes was, in fact, due, certain factors must be analyzed. These factors focus on the strengths and weaknesses of the parties positions and whether an insurer’s failure to settle was a good faith decision. Kuchak v. Lancaster General Hospital, 377 Pa. Super. 288, 547 A.2d 372 (1988).

Our review of the record reveals that there is no question of liability and that the injuries of the plaintiff are so permanent and severe as to justify [464]

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Davis v. Erie Insurance Group, 12 Pa. D. & C.4th 459, 1991 Pa. Dist. & Cnty. Dec. LEXIS 101 (Pa. Super. Ct. 1991).

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