Lane v. Government Employees Insurance

6 Pa. D. & C.3d 51, 1977 Pa. Dist. & Cnty. Dec. LEXIS 104
CourtPennsylvania Court of Common Pleas, Philadelphia County
DecidedMay 12, 1977
Docketno. 2508
StatusPublished

This text of 6 Pa. D. & C.3d 51 (Lane v. Government Employees Insurance) is published on Counsel Stack Legal Research, covering Pennsylvania Court of Common Pleas, Philadelphia County primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lane v. Government Employees Insurance, 6 Pa. D. & C.3d 51, 1977 Pa. Dist. & Cnty. Dec. LEXIS 104 (Pa. Super. Ct. 1977).

Opinion

GELFAND, J.,

The matter before this court concerns preliminary objections arising out of an action in both assumpsit and trespass in which plaintiffs ask for $50,000 in punitive damages together with interest, costs, and reasonable attorney’s fees.

The complaint avers that plaintiffs (hereinafter called “the Lanes”) were insureds under an insur[52]*52anee policy issued by defendant (hereinafter called “GEICO”), which policy contained uninsured motorist coverage. Subsequently, the Lanes were involved in an automobile accident with an uninsured motorist and thereafter instituted a claim under the uninsured motorist provisions of said policy in American Arbitration Association proceedings.

On October 23, 1975, an award in favor of the Lanes in the total amount of $20,000 was rendered which stated: “Government Employees Insurance Company shall pay to Leonard Lane and Sydria Lane the sum of Twenty Thousand ($20,000) Dollars.” (Emphasis supplied.)

On November 21, 1975, GEICO filed a petition with this court to confirm the award in the amount of $20,000 for both the Lanes and to have said award reduced to judgment (November term, 1975, no. 1041). The Lanes vigorously contested the petition, alleging that the intended award was $20,000 for Leonard Lane and $20,000 for Sydria Lane, totaling $40,000 for both parties. The Lanes also requested by letter to GEICO that depositions of the arbitrators be taken on Feburary 9, 1976, to determine their intended award. On February 6,

1976, however, GEICO filed a motion for protective order with this court, under the aforementioned court term and number, alleging that the American Arbitration Association proceeding had been closed, an award made and that any further proceedings concerning the arbitration in an attempt to modify, clarify or impeach said award would be in contravention of the rules of the American Arbitration Association and the common law.

On February 11,1976, this court heard argument on both GEICO’s petition to confirm award of arbitrators and its motion for protective order. On Feb[53]*53ruary 18, 1976, the Lanes filed the complaint herein requesting $50,000 in punitive damages for GEICO’s refusal to tender the $20,000 which allegedly is not in dispute. On March 2,1976, an order was issued denying GEICO's motion for protective order and directing that depositions be taken regarding the issue of whether there was an error or ambiguity in the preparation, issuance, execution and transmittal of the arbitrators’ award.

On March 29, 1976 (erroneously docketed as March 19, 1976), GEICO filed preliminary objections in the nature of a demurrer and raising the defense of the pendency of a prior action, in which it argued that punitive damages could not be properly awarded to the Lanes under the facts of this case.

On April 19, 1976, the Lanes filed a motion for consolidation of the instant action with the matter of Government Employees Insurance Company v. Leonard Lane and Sydria Lane, November term, 1975, no. 1041, alleging that: A. The parties are identical in these two actions; B. Both actions involve common questions of fact and law; C. Judicial economy will be served by consolidating these two actions. Said petition was not contested by GEICO and, consequently, was granted by this court on April 30, 1976.

Subsequently, depositions were taken; additional material submitted and on June 8, 1976, this court found that there was, indeed, an error or ambiguity in the preparation, issuance, execution and transmittal of the arbitrators’ award. Accordingly, GEICO’s petition to confirm award of arbitrators was denied and it was ordered that the matter involved herein be remanded to the original panel of arbitrators to correct the award so that it would reflect their findings and decision as of October 23, 1975.

[54]*54There is but one issue raised by both GEICO’s preliminary objections: Whether punitive damages may be properly awarded to the Lanes for GEICO’s refusal to tender the $20,000 allegedly undisputed. It is apparent to this court that such punitive damages would be improper in the instant matter. It has long been held that a petition to confirm an arbitrators’ award is the proper method to determine the validity of the award of a common-law arbitration: Bartilucci v. Safeguard Mutual Insurance Co., 212 Pa. Superior Ct. 414, 416, 242 A. 2d 916 (1968).

However, during the pendency of said petition to confirm, the Lanes requested payment from GEICO of the allegedly undisputed $20,000. GEICO agreed to tender such payment only upon the signing of a release and trust agreement by the Lanes. The Lanes argue that GEICO was remiss in refusing the tender unless a release and trust agreement was signed.

Although it is questionable whether or not GEICO should have released the $20,000, that is not material to the punitive damages issue. This court cannot overlook the fact that at the time the instant complaint was filed it was not yet finally determined whether $20,000 was owed, $40,000 was owed or nothing was owed until the matter could be remanded to the arbitrators for clarification of their award. Consequently, until this court decided how to resolve the dispute there was no valid award upon which GEICO could rely in settling its claim, and, therefore, it was under no obligation to tender $20,000 to the Lanes.

The insurance policy itself substantiates this view. It expressly provides (in paragraph 6, Part IV of the conditions), that no action shall lie against [55]*55the carrier unless as a condition precedent thereto, the insured has fully complied with all the terms of the policy. The policy further provides (in the trust agreement) that in the event of any payment under uninsured motorist coverage, the company is subrogated against the uninsured tortfeasor, the insured holds any recovery against the tortfeasor in trust for the company, the insured must cooperate to effect a recovery against the tortfeasor, and, finally, that the insured shall execute such documents as may be appropriate to secure these rights and obligations.

The “release and trust agreement” (complaint, exhibit C(2)) is in complete accord with those policy obligations. Consequently, until its petition to confirm was finally adjudicated GEICO had a reasonable basis to withhold payment of the said $20,000 unless it received a release and trust agreement in accordance with the policy. Hence, its refusal to tender the money was insufficient to sustain a claim for punitive damages.

In their complaint the Lanes allege (first count, claim in assumpsit, p. 3): “The deliberate and continued withholding by the defendant of the sum of $20,000 which is admittedly due to the plaintiffs together with the insistence by defendant that plaintiffs release any claim in excess of that amount as a condition precedent to the payment of the admitted indebtedness constitutes an unjustifiable breach of contract by the defendant.” (Emphasis supplied.)

The Lanes also allege (second count, claim in trespass, pp. 3 & 4): “Defendant has wilfully, intentionally and arbitrarily disregarded the lawful rights of the plaintiffs by:

“(a) persistently and unjustifiably refusing to [56]*56pay the sum of $20,000 which defendant has admitted to be owing the plaintiffs;

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Bluebook (online)
6 Pa. D. & C.3d 51, 1977 Pa. Dist. & Cnty. Dec. LEXIS 104, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lane-v-government-employees-insurance-pactcomplphilad-1977.