Erie Insurance Co. v. Williams

855 A.2d 59, 2004 Pa. Super. 247, 2004 Pa. Super. LEXIS 1480

• Court: Superior Court of Pennsylvania
• Decided: June 29, 2004
• Status: Published

Opinions

STEVENS, J.

¶ 1 Appellant Erie Insurance Exchange (Erie) appeals from a judgment of the Court of Common Pleas of Luzerne County entered in favor of Appellees Ruth Ann and Gary Williams. We affirm.

¶ 2 This matter stems from an April 6, 2000 auto accident. On that date, a vehicle driven by Mrs. Williams was struck by a vehicle driven by James Mack, after Mrs. Williams made a left turn across traffic based on the hand signals of another driver who fled the scene. The insurance policy issued to Appellees by Erie made subject to binding arbitration disagreements over the right to recover uninsured or underinsured motor vehicle damages, and the amount of those damages. The policy also noted that in all other respects, the arbitration would follow the arbitration provisions of the Arbitration Act of 1927.¹

¶ 3 Pursuant to the arbitration clause in the insurance policy, an arbitration hearing was held, and on January 30, 2002, the arbitration panel issued an order awarding Appellees two hundred thirty-seven thousand dollars ($237,000.00), based on the panel’s conclusion that Appellees suffered damages in the amount of three hundred ninety-five thousand dollars ($395,000.00), but that Mrs. Williams was forty percent (40%) comparatively negligent in causing the accident.

¶ 4 Erie responded by filing two petitions before the Court of Common Pleas of Luzerne County on March 1, 2002. The first, a petition to modify the arbitrators’ award pursuant to 42 Pa.C.S.A. § 7315 and 5 P.S. § 171,² requested the trial court to reduce the award to two hundred thousand dollars ($200,000.00), the amount of uninsured motorist coverage available under Appellees’ insurance policy. Appellees did not oppose modification of the award to comport with policy limits. Answer to Petition to Modify Arbitrators’ Award, filed 3/25/02.

¶ 5 The second petition filed by Erie on March 1, 2002, titled “Petition to Modify and/or Correct the Arbitration Award Entered in the Above-Captioned Matter Pursuant to the Arbitration Act of 1927 for Mistake of Law,” averred that the arbitrators erred in rendering their award for the following reasons:

1. That the female Respondent failed to produce legally sufficient evidence that would support her contention that she was entitled to rely on the “waving driver” as an indication that the roadway was safe to cross;

2. Even if the female Respondent was entitled to rely on the actions of the waving driver as an indication it was clear to cross, [sic] The Female Respondent had a nondelegable duty to determine that it was safe to make her left turn and her negligence precludes her recovery as a matter of law.

Petition to Modify and/or Correct the Arbitration Award Entered in the Above-Captioned Matter Pursuant to the Arbitration Act of 1927 for Mistake of Law, filed 3/1/02 at 3. Based on the above alleged errors, the petition requested the trial court to “modify and/or correct the Award under 5 Pa. [sic] 171 to rectify the aforesaid mistakes of law so that the Award shall reflect a verdict in favor of [Erie].” Id. Appellees filed an answer and new matter disputing Erie’s claims and asserting that it’s “error of law” allegation amounted to nothing more than an attempt to rehash factual issues related to causation, which, Appellees maintained, were properly addressed and decided by the arbitrators. Answer and New Matter in Opposition to Petition to Modify and/or Correct Arbitrators’ Award for Alleged Mistake of Law, filed 3/25/02.

¶ 6 On April 24, 2002, the Honorable Michael Conahan issued an order modifying the award to comport with the applicable policy limits. Order filed 4/24/02. Thereafter, on July 31, 2002, Judge Cona-han heard oral argument on Erie’s allegations that a mistake of law had occurred, and on August 7, 2002, he rendered a decision. An error occurred in the captioning of the August 7, 2002 order, however, so an amended order was issued on August 15, 2002, as follows:

AND NOW, this 15th day of August, 2002, upon consideration of Erie’s Petition to Modify and/or correct the Arbitration Award for Alleged Mistake of Law, and following oral argument conducted before the Court on Wednesday, July 31, 2002, it is hereby ORDERED, ADJUDGED AND DECREED as follows:

1. The Court, having reviewed the record in this case and the Pennsylvania Superior Court decision in Askew v. Zel-ler [and Olsson], 361 Pa.Super. 35, 521 A.2d 459 (1987)³, specifically determines that Ruth Ann and Gary Williams clearly stated a cause of action upon which relief was properly granted in the context of the uninsured motorist hearing below;

2. Further, having stated a legally sufficient cause of action, the Court finds that the arbitration panel, as the “Trier of Fact” properly assessed factual issues, such as the type of signals the unidentified motorist made, what reasonable interpretation Ms. Williams gave those signals, whether the signaler’s acts were negligent and whether the signaler’s acts were the legal cause of the accident. In sum, the arbitration panel acted properly and appropriately exercised its discretion under Pennsylvania Law. That decision should not be disturbed on appeal; and

3. Accordingly, Erie Insurance Exchange has failed to sustain its weighty burden of proof in the context of this appeal, and the decision of the arbitration panel, entering a molded award of $237,000 which was previously reduced by stipulation of the parties to policy limits of $200,000, is hereby affirmed.

Amended Order filed 8/15/02.

¶ 7 Erie praeciped for entry of judgment on August 23, 2002, and judgment was entered that day in the amount of two hundred thousand dollars ($200,000.00). Order filed 8/23/02. Also on August 23, 2002, Erie appealed the trial court’s August 7, 2002 order, as corrected by its August 15, 2002 amended order. Thereafter, on August 30, 2002, Judge Conahan ordered Erie to ñle a concise statement of matters complained of on appeal, pursuant to Pa.R.A.P.1925(b), and Erie did so on September 6, 2002, setting forth three issues.⁴

¶ 8 Of the three issues raised, we find the final claim waived. In its appellate brief, Erie questions:

Did the Honorable Court err in failing to appropriately weigh the evidence of negligence of the female respondent versus any alleged negligence against the unknown driver?

Appellant’s brief at 5. While this claim essentially corresponds with the second matter complained of in Erie’s 1925(b) statement, it was not raised before the trial court by Erie’s petition to modify and/or correct the arbitration award. As the statement of matters complained of on appeal asserts, Erie is claiming that:

[T]he majority of the [arbitration] panel inexplicably concluded that the Respondent was less negligent than the phantom driver who had no such duty. The trial Court never addressed this issue or provided any explanation or analysis of how the Respondent’s violation of her statutorily mandated duty was less negligent than that of the phantom driver.

Pa.R.A.P.1925(b) statement at 1-2. Since the petition brought before the trial court did not raise this issue, Erie cannot complain that it was error for trial court to fail to address it. See Petition to Modify and/or Correct the Arbitration Award Entered in the Above-Captioned Matter Pursuant to the Arbitration Act of 1927 for Mistake of Law, filed 3/1/02. “A well-established rule in this Commonwealth is that issues not raised in the court below are waived and may not be raised for the first time on appeal.” City of Philadelphia v. Fraternal Order of Police, 677 A.2d 1319, 1323 (Pa.Cmwlth.1996) (citations omitted) (Therein, although the City timely appealed an arbitration award to the common pleas court, the City did not raise before that court any issue regarding the grievance arbitrator’s noncompliance with the PICA Act or related public policy considerations. As such, a panel of this Court held that the City waived those issues on appeal.); Pa.R.A.P. 302 (“Issues not raised in the trial court are waived and cannot be raised for the first time on appeal.”).

¶ 9 Erie’s remaining two allegations assert that Judge Conahan erred in “affirming the decision of the arbitrators in that the testimony did not support the inference that the hand wave of the unknown driver was the legal cause of the accident,” and erred “in not concluding that as a matter of law, the female respondent failed to establish by a totality of the circumstances that she was justified in relying on the signal from the unknown driver.” Appellant’s brief at 5.

¶ 10 When reviewing a trial court’s decision to affirm, modify or vacate an arbitration award arising from an insurance contract, we may reverse only for an abuse of discretion or an error of law. Racicot v. Erie Insurance Exchange, 837 A.2d 496, 499 (Pa.Super.2003) (citing 42 Pa.C.S.A. § 7302(d)(2); Bowersox v. Progressive Casualty Ins. Co., 781 A.2d 1236, 1238 (Pa.Super.2001)). Here, as we noted above, the insurance policy at issue required that arbitration between the parties follow the arbitration provisions of the Arbitration Act of 1927. When such a policy provision exists, the trial court’s standard of review in a proceeding to modify or correct the arbitration award is that set forth at Section 7302(d)(2) of the 1980 Arbitration Act. Racicot, 837 A.2d at 499 (citing 42 Pa.C.S.A. § 7302(d)(2) historical note; Nationwide Ins. Co. v. Calhoun, 430 Pa.Super. 612, 635 A.2d 643, 646 (1993)).

Pursuant to 42 Pa.C.S.A. § 7302(d), a statutory arbitration award will be modified or corrected where the award is contrary to law, but only in the following circumstances:

(i) The Commonwealth government submits a controversy to arbitration.

(ii) A political subdivision submits a controversy with an employee or a representative of employees to arbitration.

(iii) Any person has been required by law to submit or to agree to submit a controversy to arbitration pursuant to this subchapter.

Cotterman v. Allstate Insurance Company, 446 Pa.Super. 202, 666 A.2d 695, 698 (1995). Agreements to arbitrate expressly providing for arbitration under the 1927 Act (which provided for a “contrary to law” standard for review), are viewed as falling within section 7302(d)(iii), triggering paragraph (2) of Section 7302(d), which states:

[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.

42 Pa.C.S.A. § 7302(d)(2); Cotterman, supra. A judgment notwithstanding the verdict is properly granted only when, after it has viewed the evidence in a light most favorable to the verdict winner, the trial court concludes that either “ ‘the movant is entitled to judgment as a matter of law1 or ‘the evidence was such that no two reasonable minds could disagree that the outcome should have been rendered in favor of the movant.’ ” Cauthorn v. Owens Corning Fiberglas Corp., 840 A.2d 1028, 1035 (Pa.Super.2004).

¶ 11 In supporting the decision to deny the petition to modify and/or correct the arbitration award, the learned trial judge discusses the appropriate standards of review, including the requirements for granting judgment notwithstanding the verdict, and specifically notes his conclusion that Erie failed to meet those requirements. 1925(a) Opinion at 4-5. The judge specifically found that Erie’s claim regarding causation was not supported by the facts or the law, and concluded that the assertion that the arbitration panel did not consider the “threshold argument” was belied by the record. 1925(a) Opinion at 6-7. Judge Conahan additionally explained that under Askew, supra, which espouses a “totality of the circumstances” analysis, it is for the jury to determine the significance reasonably attributed to a motorist’s hand signal. 1925(a) Opinion at 6.

Upon review of the record, this Court simply cannot agree with Erie that the record “does not provide any objective basis that would justify Respondent’s action of making a turn.” In fact, an independent witness confirmed that under the same circumstances he to would have attempted the left hand turn. Similarly, the Court cannot agree with Erie that the record “fails to disclose objective evidence and identifiable circumstances that would support Respondent’s reliance on the signaling driver.” As developed during Erie’s cross examination of Williams, she not only saw the identified motorist wave to her three times, repeatedly mouth to her “come on,” but Williams observed the signaling motorist look in his rear view mirror to check whether any cars were coming. Finally, following the collision which Mr. Renfer confirmed occurred quite close to the signaling motorist, that driver immediately absconded.

The arbitration panel rendered its determination, from a totality of the circumstances perspective, after considering the developed factual record and assessing witness credibility. This Court finds that the record contains a sufficient basis to support the allocation of negligence and the award entered by the arbitration panel.

1925(a) Opinion at 9.

¶ 12 Judge Conahan concluded that the arbitration award was neither contrary to law nor such that had it been a jury verdict the court would have entered a different judgment or a judgment notwithstanding the verdict, therefore he denied Erie’s petition to modify and/or correct the arbitration award, and affirmed that award in the Williams’ favor. Based on our review of the record and applicable case law, we find no abuse of discretion or error of law in Judge Conahan’s actions. Racicot, supra; Bowersox, supra; Cotterman, supra; 42 Pa.C.S.A. § 7302(d)(2).

¶ 13 For the foregoing reasons, we affirm the judgment of the trial court.

¶ 14 Affirmed.

¶ 15 KLEIN, J., files a dissenting opinion.

1 . "In 1980, the Arbitration Act of 1927 was repealed and replaced with The Pennsylvania Uniform Arbitration Act, 42 Pa.C.S. § 7301 et. seq., which now governs agreements providing for arbitration under the former Arbitration Act of 1927.” Scott v. Erie Insurance, 706 A.2d 357, 359 (Pa.Super.1998).

2 . Section 7315 of the Uniform Arbitration Act provides for modification or correction of an arbitration award by the court as follows:

(a)General Rule. On application to the court made within 30 days after delivery of a copy of the award to the applicant, the court shall modify or correct the award where:

(1)there was an evident miscalculation of figures or an evident mistake in the description of any person, thing or property referred to in the award;

(2) the arbitrators awarded upon a matter not submitted to them and the award may be corrected without affecting the merits of the decision upon the issues submitted; or

(3) the award is deficient in a matter of form, not affecting the merits of the controversy.

(b) Confirmation of award. — If an application to modify or correct the award is granted, the court shall modify and correct the award so as to effect its intent and shall confirm the award as made by the arbitrators.

(c) Alternative applications. — An application to modify or correct an award may be joined in the alternative with an application to vacate the award.

42 Pa.C.S.A § 7315(a)-(c). These provisions were previously contained in 5 P.S. § 171.

3 . In Askew, Olsson gave a hand signal encouraging Zeller to turn, but when Zeller did so his car was struck by motorcyclist Askew, approaching from Olsson's right. Askew, 521 A.2d at 461.

4 . Judge Conahan has filed a Rule 1925(a) opinion.