Popskyj v. Keystone Insurance

565 A.2d 1184, 388 Pa. Super. 429, 1989 Pa. Super. LEXIS 3274

• Court: Supreme Court of Pennsylvania
• Decided: October 30, 1989
• Docket: 02359
• Status: Published

Opinions

BROSKY, Judge.

This is an appeal from the order of July 21, 1987, docketed August 11, 1987, which denied appellant’s petition to modify or vacate an arbitration award.

On May 24, 1985, appellant, George Popskyj was struck, while a pedestrian, by an automobile driven by Steven R. Alexy. Alexy was insured by Prudential Property and Casualty Insurance Company (“Prudential”). In April of 1987, Prudential tendered the full amount of Alexy’s policy in settlement of appellant’s claim. In return, appellant signed a release in favor of Alexy.

Appellant then demanded from his own insurer, Keystone Insurance Company, appellee herein, the payment of under-insured motorist benefits. Appellee denied coverage, based upon the issue of liability, as well as the amount of damages.

Pursuant to the insurance contract, the parties submitted their dispute to statutory arbitration. At arbitration, appellees raised defenses pertaining to liability and damages, but also argued that appellant had settled with Alexy without appellee’s prior consent, thereby extinguishing appellee’s right of subrogation in violation of various provisions in the insurance contract. The arbitrators held in appellee’s favor.

Appellant then filed a petition to vacate or modify the award of the arbitrators. The Court of Common Pleas of Philadelphia County denied appellant’s petition. This appeal followed.¹

Appellant raises the following issues, in his original brief, for our determination: (1) whether the arbitrators’ decision misinterpreted the insurance contract, and was thus an error of law; (2) whether appellee waived the contract’s consent to settle clause by its conduct; (3) whether appellee improperly introduced new evidence on appeal to the trial court; (4) whether appellee must demonstrate prejudice to itself in order to deny coverage; (5) whether the consent to settle clause was so vague and ambiguous as to be unenforceable; (6) whether the terms of the contract were contradictory so as to create a “catch-22” situation whereby an insured could not recover; and (7) whether appellee’s conduct in dealing with appellant amounted to bad faith.

Appellant also raises, by way of his supplemental brief to the en banc court, whether this Court may review the arbitrators’ award for an error of law.²

Upon review of the record, and the arguments of counsel, we find no error, and now affirm.

Our discussion must begin with Issue 1 as raised in appellant’s supplemental brief, as its resolution determines whether we may reach the other issues raised, which all concern the legal correctness of the result reached by the arbitrators: may an arbitration award such as this be reviewed for an error of law?

In support of his position, i.e., that we may review for an error of law, appellant cites the following provision, in relevant part, from the Pennsylvania Uniform Arbitration Act of 1980,³ 42 Pa.C.S. § 7301, et seq:

§ 7302. Scope of subchapter

* * * * * *

(d) Special application.—

(1) Paragraph (2) shall be applicable where:

(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.

(2) Where this paragraph is applicable 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.

(Emphasis supplied).

While the boundaries of appellant’s arguments on this point are not well delineated, but rather, are overlapping, he appears to be making three arguments as to why the broad scope of review under § 7302(d)(2) should apply here: (1) 42 Pa.C.S. §§ 7303 and 7304 provide that agreements to arbitrate are valid, enforceable, and irrevocable, and thus the insurance contract's arbitration provision brings the parties within § 7302(d)(1)(iii) as persons “required by law to submit ... a controversy to arbitration”; (2) the repealed No-Fault Act, which, pursuant to 40 P.S. § 2000 and the regulations promulgated thereunder, required the carriage of uninsured motorist coverage, and arbitration of uninsured coverage disputes, has been replaced by the Motor Vehicle Financial Responsibility Law, which requires both uninsured and underinsured coverage, and thus the applicable regulations should be construed as requiring arbitration of underinsured claims as well, which would make these parties persons “required by law ... to agree to submit a controversy to arbitration” under § 7302(d)(1)(iii); and (3) lastly, case law to date involving such coverage disputes has routinely applied the broad scope of judicial review.

Appellee, by contrast, takes the position that this matter does not fall within any of the special circumstances where the § 7302(d)(2) broad scope of review is applicable. If appellee is correct, the “other provision(s)” referred to in § 7302(d)(2) would define our scope of review, and control whether this Court has the authority to vacate, modify, or correct the award in any fashion. The “other provision(s)” are found at 42 Pa.C.S. §§ 7314 and 7315, which, in relevant part, narrowly circumscribe the circumstances in which we may alter an award:

§ 7314. Vacating award by court

(a) General rule.—

(1) On application of a party, the court shall vacate an award where:

(i) the court would vacate the award under section 7314 (relating to common law arbitration) if this sub-chapter were not applicable;

(ii) 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;

(iii) the arbitrators exceeded their powers;

(iv) the arbitrators refused to postpone the hearing upon good cause being shown therefor or refused to hear evidence material to the controversy or otherwise so conducted the hearing, contrary to the provisions of section 7307 (relating to hearing before arbitrators), as to prejudice substantially the rights of a party; or

(v) there was no agreement to arbitrate and the issue of the existence of an agreement to arbitrate was not adversely determined in proceedings to compel or stay arbitration) and the applicant-party raised the issue of the existence of an agreement to arbitrate at the hearing.

(2) The fact that the relief awarded by the arbitrators was such that it could not or would not be granted by a court of law or equity is not a ground for vacating or refusing to confirm the award.

* * * # jjt ?fc

§ 7315. Modification or correction of award by court

(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.

******

(Emphasis supplied.)

As none of the above circumstances are applicable, and appellant has proffered no argument to the contrary, clearly we would not have the authority to disturb this award for an error of law if appellee is correct in its position.

Upon review of the record and the arguments of counsel, we conclude that the broad scope of review under § 7302(d)(2) is not appropriate under the facts presented, and, as the parties are in agreement that none of the circumstances contemplated in §§ 7314 and 7315 are involved, we hold that this Court does not have the power to alter the arbitrators’ award. Accordingly, we affirm.

Appellant’s first argument is that the parties’ contract, which provides for arbitration of disputed underinsured motorist claims, brings §§ 7303 and 7304 into play. Those sections provide as follows, in relevant part:

§ 7303. Validity of agreement to arbitrate

A written agreement to subject any existing controversy to arbitration or a provision in a written agreement to submit to arbitration any controversy thereafter arising between the parties is valid, enforceable and irrevocable, save upon such grounds as exist at law or in equity relating to the validity, enforceability or revocation of any contract.

§ 7304. Court proceedings to compel or stay arbitration

(a) Compelling arbitration. — On application to a court to compel arbitration made by a party showing an agreement described in section 7303 (relating to validity of agreement to arbitrate) and a showing that an opposing party refused to arbitrate, the court shall order the parties to proceed with arbitration. If the opposing party denies the existence of an agreement to arbitrate, the court shall proceed summarily to determine the issue so raised and shall order the parties to proceed with. arbitration if it finds for the moving party. Otherwise, the application shall be denied.

As § 7303 makes such provisions as the one sub judice “valid, enforceable, and irrevocable”, with § 7304 providing the mechanism for court enforcement, appellant reasons that the parties are persons “required by law ... to submit a controversy to arbitration” for purposes of § 7302(d)(1)(iii), thereby entitling him to a review of this award under the broad “judgment n.o.v.” standard.

One need only consult the language of § 7302(a) to see the flaw in appellant’s argument:

§ 7302. Scope of subchapter

(a) General rule. — An agreement to arbitrate a controversy on a nonjudicial basis shall be conclusively presumed to be an agreement to arbitrate pursuant to Subchapter B (relating to common law arbitration) unless the agreement to arbitrate is in writing and expressly provides for arbitration pursuant to this subchapter or any other similar statute, in which case the arbitration shall be governed by this subchapter.

* * * * * *

Taking appellant’s argument as true, it would be impossible for contracting parties to have a written agreement to arbitrate, and not fall within the exceptional circumstances of § 7302(d)(1)(iii), entitling the loser at arbitration to review of the award for errors of law. As the above-emphasized language of § 7302(a) makes clear, however, it is entirely possible for parties to agree in writing to arbitrate, and in the absence of an express provision that statutory arbitration is involved, it shall be “conclusively presumed” that the parties intend for the rules of common law arbitration to apply. The scope of review applicable to a common law arbitration award is even narrower than that encompassed in §§ 7314 and 7315:

SUBCHAPTER B

COMMON LAW ARBITRATION

§ 7341. Common Law Arbitration

The award of an arbitrator in a nonjudicial arbitration which is not subject to Subchapter A (relating to statutory arbitration) or a similar statute regulating nonjudicial arbitration proceedings is binding and may not be vacated or modified unless it is clearly shown that a party was denied a hearing or that fraud, misconduct, corruption or other irregularity caused the rendition of an unjust, inequitable or unconscionable award.

As such, appellant’s argument that a written agreement to arbitrate automatically invokes the § 7302(d)(2) broad scope of review, must fail.

Appellant’s second argument concerns the now-repealed No-Fault Act, 40 P.S. § 1009.101, et seq., and the regulations promulgated pursuant to that Act. At 31 Pa. Code § 63.1, the Insurance Commission, in accordance with the authority given it by 40 P.S. § 2000, made the inclusion of uninsured motorist coverage in liability insurance policies mandatory, except where such coverage was “rejected in writing by the insured.” Furthermore, at 31 Pa.Code § 63.2, a sample form setting forth the minimum required coverage to be offered, included the following arbitration provision for the resolution of coverage disputes:

8. Arbitration. If any person making claim hereunder and the company do not agree that such person is legally entitled to recover damages from the owner or operator of an uninsured automobile because of bodily injury to the insured, or do not agree as to the amount of payment which may be owing under this endorsement, then, upon written demand of either, the matter or matters upon which such person and the company do not agree shall be settled by arbitration in accordance with the rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. Such person and the company each agree to consider itself bound and to be bound by any award made by the arbitrators pursuant to this endorsement.

As the replacement act, the Motor Vehicle Financial Responsibility Act, 75 Pa.C.S. § 1701, et. seq., now makes both uninsured and underinsured coverage in liability policies mandatory, see 75 Pa.C.S. § 1731, appellant argues by analogy that arbitration as provided in the above regulation is now mandatory in both uninsured and underinsured coverage disputes, making such disputes as the current one disputes where the parties are persons “required by law ... to agree to submit a controversy to arbitration” under § 7302(d)(1)(iii).

We shall not, and need not, resolve whether appellant is correct that arbitration is now required, under 31 Pa.Code § 63.2, of underinsured coverage disputes, for we find that the regulation in question demonstrates the flaw in appellant’s argument. As the above-emphasized language shows, mandatory arbitration must be available to the parties, but “in accordance with the rules of the American Arbitration Association”. The rules of the AAA provide for common law arbitration of disputes. See Great American Ins. Co. v. American Arbitration Assoc., 436 Pa. 370, 260 A.2d 769, 770 (1970); Wingate Construction Co. v. Schweizer Dipple, Inc., 419 Pa. 74, 213 A.2d 275, 277 (1965).

Hence, appellant is once arguing that the very existence of an arbitration provision that is legally enforceable, automatically entitles him to review of this award for errors of law under the § 7302(d)(1)(iii), where the very body of law providing for arbitration makes it patently obvious that a liability carrier is only obligated to submit to common law arbitration. We have already established that awards pursuant to common law arbitration are not subject to the broad scope of judicial review.

Appellant’s argument, again, must fail.

Finally, appellant cites several cases involving uninsured/underinsured coverage disputes, in which it was held that the loser at arbitration was entitled to receive the broad “judgment n.o.v.” scope of review of the award, and that the award could be corrected for errors of law.

A discussion of these cases would be premature prior to a comparison/contrast of the current Pennsylvania Uniform Arbitration Act, 42 Pa.C.S. § 7301, et seq., and its now repealed predecessor, the Uniform Arbitration Act of 1927, 5 P.S. §. 161, et seq.

The Uniform Arbitration Act of 1927 provided the following grounds for court modification or correction of an award in arbitration:

§ 171. Modifying or correcting award, grounds

In either of the following cases the court shall make an order modifying or correcting the award upon the application of any part to the arbitration:

(a) Where there was an evident material miscalculation of figures, or an evident material mistake in the description of any person, thing or property referred to in the award.

(b) Where the arbitrators have awarded upon a matter not submitted to them, unless it is a matter not affecting the merits of the decision upon the matters submitted.

(c) Where the award is imperfect in matter of form not affecting the merits of the controversy.

(d) Where the award is against the law, and is such that had it been a verdict of the jury the court would have entered different or other judgment notwithstanding the verdict.

The court may modify and correct the award or resubmit the matter to the arbitrators.

Clearly, the broad “judgment n.o.v.” standard of review was not limited under the 1927 Act to any particular class of litigants or to any special circumstances pertaining to the context of the parties’ statutory arbitration agreement.

This, of course, is in direct contrast to the current act, passed into law in 1980, which now limits the availability of review of awards for errors of law. See 42 Pa.C.S. § 7302(d)(1). However, the 1980 Act was passed with an accompanying historical note which sets forth the following, in relevant part:

Historical Note

Application:

Section 501(b) of Act 1980, Oct. 5, P.L. 693, No. 142. provides as follows:

The provisions of 42 Pa.C.S. § 7302(d)(2) (relating to special application) shall be applicable to any nonjudicial arbitration pursuant to:

(1) An agreement made prior to the effective date of this act which expressly provides that it shall be interpreted pursuant to the law of this Commonwealth and which expressly provides for statutory arbitration.

(2) An agreement heretofore or hereafter made which expressly provides for arbitration pursuant to the former provisions of the Act of April 25, 1927 (P.L. 381, No. 248), relating to statutory arbitration.

In essence, the legislature recognized the inequity and chaos likely to result by imposing the 1980 Act’s limitations as to the review of awards, upon parties who had expressly agreed to the rules, and broad scope of review, provided in the 1927 Act. To avoid this result, the legislature included the above historical note, which specifies two instances which, without more, shall be viewed as falling within the parameters of § 7302(d)(1)(iii), as involving parties legally bound to arbitrate subject to broad judicial review: (1) agreements to arbitrate made prior to December 4, 1980, the effective date of the 1980 Act, expressly providing for arbitration pursuant to the laws of the Commonwealth; and (2) agreements to arbitrate, made either before or after 1980, expressly providing for arbitration under the 1927 Act.

With this background, we turn to the cases cited by appellant, and find that we needn’t embark upon an exhaustive analysis of the facts of each case. The cases cited clearly fall, with few exceptions,⁴ within one of three categories:

1) cases in which the accident precipitating the cause of action occurred pre-1980, and the parties’ agreement thereby either expressly or implicitly provided for arbitration under the 1927 Act: see Littlejohn v. Keystone Ins. Co., 353 Pa.Super. 63, 509 A.2d 334 (1986);⁵ Boyle v. State Farm Mut. Ins. Co., 310 Pa.Super. 10, 456 A.2d 156 (1983); Obdyke v. Harleysville Mut. Ins. Co., 299 Pa.Super. 298, 445 A.2d 763 (1982);

2) cases in which the insurance agreement was made prior to December 4, 1980, and contained language providing that the law of the Commonwealth would apply, in accordance with part (1) of the historical note: see Bromley v. Erie Ins. Group, 322 Pa.Super. 542, 469 A.2d 1124 (1983);⁶ and

3) cases arising either before or after December 4, 1980, in which the insurance agreement specifically provided for arbitration under the 1927 Act, in accordance with part (2) of the historical note: see Geisler v. Motorists Mut. Ins. Co., 382 Pa.Super. 622, 556 A.2d 391 (1989); Selected Risks Ins. Co. v. Thompson, 363 Pa.Super. 34, 525 A.2d 411 (1987), aff’d in part, rev’d in part on other grounds 520 Pa. 130, 552 A.2d 1382 (1989); Ragin v. Royal Globe Ins. Co., 315 Pa.Super. 179, 461 A.2d 856 (1983).⁷

Hence, it is evident that it is not the status of a case as an uninsured/underinsured coverage dispute that invokes the broad scope of judicial review. Rather, it is the facts of the case, and/or the relevant policy language, that bring a matter within one of the three above categories.

As the accident sub judice occurred in 1984, category (1) is clearly inapplicable. We must examine the arbitration clause in the insurance policy to determine if the language therein falls within either category (2), derived from part (1) of the historical note, or category (3), derived from part (2) of the note.

The arbitration clause contained within the parties’ agreement in 1984, and therefore applicable on the date of the accident⁸, reads as follows, in relevant part:

ARBITRATION

If we and a covered person do not agree:

1. Whether that person is legally entitled to recover damages from the owner or operator of an uninsured motor vehicle or underinsured motor vehicle; or

2. As to the amount of damages: either party may make a written demand for arbitration. Arbitration shall be conducted in accordance with the provisions of the Pennsylvania Uniform Arbitration Act____

The above-emphasized language neither states which act, the 1927 Act or the 1980 Act, is to be followed, nor refers to either act by title and section numbers. As part (2) of the historical note requires that the 1927 Act be specified in a post-1980 arbitration provision for broad judicial review to be available to the parties, this case does not fall within category (3); the Geisler, Selected Risks, and Ragin policies all specified that the 1927 Act would govern arbitration.

The above clause also does not include the date this agreement was formed, nor, for that matter, does any other clause or page in the contract reveal that information. Thus, it is impossible to tell on the basis of the above-emphasized language alone, whether this agreement qualifies as a pre-December 4, 1980 agreement specifying statutory arbitration under the law of the Commonwealth, as per part (1) of the historical note.

Normally, any ambiguity resulting from a deliberate choice of language will be most strictly construed against the party which drafted the contract, herein the insurer. Royal Ins. Co. (U.K.) Ltd. v. Ideal Mut. Ins. Co., 649 F.Supp. 130 (E.D.Pa.1986); Rusiski v. Pribonic, 511 Pa. 383, 515 A.2d 507, 510 (1986). However, where strong evidence supports a contrary interpretation, application of this rule is improper. Royal Ins. Co., supra. A court may resort to an examination of external evidence to determine the intentions of the parties where the words used are, as here, ambiguous. Greene v. Oliver Realty Co., 363 Pa.Super. 534, 526 A.2d 1192, 1194 (1987).

In the instant case, we have available to us as part of the record, information which demonstrates that the parties did not intend for the 1927 Act to apply.

The current arbitration clause is part of a 1984 amendatory endorsement to the policy. Included in the policy “package” that has been submitted into the record by appellee are all prior amendatory endorsements that have at one time or another been incorporated into this policy since 1980.⁹ Certain portions of this policy have been revised several times. One portion that has been amended over time is the arbitration clause.

The arbitration clause contained in the 1980 amendatory endorsement sets forth the following, in relevant part:

ARBITRATION

If we and a covered person do not agree:

1) Whether that person is legally entitled to recover damages under this endorsement; or

2) As to the amount of damages; either party may make a written demand for arbitration____

The reference to the Pennsylvania Uniform Arbitration Act contained in the 1984 clause is absent; and, in fact, no mention whatsoever is made to any form of statutory arbitration. Clearly, then, as per § 7302(a), the parties’ 1980 agreement called for common law arbitration only, which, as previously noted, provides for a very limited scope of judicial review.

It cannot be reasonably construed, placing these two clauses side by side, that the parties had an agreement before December 4, 1980, calling for statutory arbitration pursuant to the law of this Commonwealth, under part (1) of the historical note. The parties’ 1980 agreement did not even provide for statutory arbitration, much less pursuant to a particular act.

Our construction is further buttressed by reference to the arbitration clause set forth in the 1981 amendatory endorsement:

ARBITRATION

If we and a covered person do not agree:

1) Whether that person is legally entitled to recover damages from the owner or operator of an

a. uninsured motor vehicle; or

b. underinsured motor vehicle if Underinsured Motorists Coverage is afforded; or

2) As to the amount of damages:

either party may make a written demand for arbitration. Arbitration shall be conducted in accordance with the provisions of the Pennsylvania Arbitration Act of 1927

We deem the 1981 clause’s inclusion of new language referring to the 1927 Act to be significant. It indicates a clear understanding on the part of insurer and insured that the prior 1980 clause did not provide for statutory arbitration under the prevailing law in Pennsylvania, and that an amendment to the clause was necessary to rebut the presumption in favor of common law arbitration.¹⁰

Hence, we find that part (1) of the historical note is equally inapplicable, placing this matter outside of category (2) as well.¹¹

As the current fact situation and arbitration clause do not bring this matter within the parameters of any of the three enumerated categories above, the cases cited to us by appellant, in which our Court found the broad scope of judicial review applicable, are all inapposite.

Appellant’s third argument fails as well.

Having found that none of the special circumstances invoking broad judicial review of arbitration awards in statutory arbitration are involved sub judice, we are limited to the narrow scope of review provided in §§ 7314 and 7315. Appellant has not argued that the award herein was the product of any fraudulent, irregular, or impartial conduct on the part of the arbitrators, or that the award contains any miscalculations or deficiencies in form. The parties would appear to be in agreement that the dispute before us is purely one concerning the arbitrators’ findings of fact, and application of the law to those facts. This Court is not at liberty to review this award so broadly, and must now affirm the order below.

Order affirmed. Jurisdiction is relinquished.

MONTEMURO, J., files a concurring opinion in which McEWEN, TAMILIA and JOHNSON, JJ., join. McEWEN and TAMILIA, JJ., concur in the result of the majority and join MONTEMURO, J., concurring opinion. DEL SOLE, J., files a dissenting opinion.

1 . We note that there would appear to be a procedural irregularity in the taking of this appeal.

The trial court denied appellant’s petition to vacate or modify by order of July 21, 1987. Appellant entered final judgment on the order, and appealed from that judgment.

In Dunlap v. State Farm Ins. Co., 377 Pa.Super. 165, 546 A.2d 1209 (1988), a panel of this Court held that an order denying a petition to vacate an arbitration award is not an appealable order. Id., at p. 1210. The court, where no further application to modify or correct the award is pending, has the obligation to enter an order confirming the award; it is the order confirming the award that is to be reduced to final judgment for the taking of an appeal. Id., at p. 1211.

In the matter sub judice, the trial court did not confirm the arbitration award. However, as Dunlap was not filed until August 23, 1988, more than one year after the current appeal was taken, we shall not remand for the performance of this ministerial act. but shall overlook this procedural irregularity, as this appeal was taken from a final judgment.

2 . In his supplemental brief, appellant also repeats Issues 1 and 2 from his original brief, in his supplemental Statement of Questions Involved.

3 . The parties do not dispute that the insurance policy, as of the date of this accident, provided for statutory, and not common law, arbitration of disputed underinsured motorist claims. They also do not dispute that the 1980 Act had taken effect as of the relevant date. It is the interpretation of the 1980 Act, as it applies sub judice, that forms the basis of the parties’ dispute.

4 . Appellant cites three cases which do not appear to fit into the enumerated categories above. We shall discuss them in chronological order.

The first, Haegele v. Pennsylvania General Ins. Co., 330 Pa.Super. 481, 479 A.2d 1005 (1984), involved a 1978 accident upon which the parties arbitrated in 1981. Despite the fact that the insurance agreement's arbitration clause called for arbitration pursuant to the 1927 Act, the parties apparently orally agreed at arbitration to follow the 1980 Act. Haegele, supra, at p. 1006, n. 3. This would appear to contravene both § 7303, which makes the terms written agreements to arbitrate irrevocable and enforceable, as well as the historical note to § 7302, which makes it clear that agreements specifying the 1927 Act shall be arbitrated in accordance with the 1927 Act.

However, without giving a rationale, our Court held that the broad scope of review was applicable. Hence, we affirm the result reached in Haegele, as the parties’ agreement specified that the 1927 Act would apply, but disavow any suggestion in footnote three that the parties were free to orally alter the terms of their written agreement.

The second case, Houston v. Nat’l Mut. Ins. Co., 358 Pa.Super. 618, 518 A.2d 311 (1986), involved a 1985 accident, with a policy calling for arbitration pursuant to the "Pennsylvania Uniform Arbitration Act, 42 Pa.C.S.A. § 7301 et seq.” Our Court refused to apply the broad standard of review. Appellant argues that the result in Houston derives from the appellant therein failing to argue §§ 7303 and 7304 to our Court.

However, as the terms of the Houston policy expressly called for arbitration pursuant to the 1980 Act, and as we have already declined to follow appellant’s interpretation of §§ 7303 and 7304 vis-a-vis § 7302(d)(1)(iii), we find that Houston was correctly decided.

Finally, in Winters v. Erie Ins. Co. 367 Pa.Super. 253, 532 A.2d 885 (1987), which involved a 1982 accident, arbitrated in 1986, our Court held that the award could be reviewed for errors of law, as the appellee-insurance company had waived any objection to broad review by failing to contest it below.

As the scope of review issue was resolved on the basis of waiver, and as the case does not include the language of the arbitration clause, we decline to either disturb the Winters holding, or to discuss its approach to this issue further.

5 . In Littlejohn, the accident occurred in 1977, while the arbitration did not occur until 1982. Our Court held that, as the accident occurred prior to the repeal of the 1927 Act, the 1927 Act's broad scope of review was applicable. However, the Littlejohn panel also commented that they would have applied the broad scope in any event. Littlejohn, supra., 509 A.2d at p. 337. As the policy language is not included in the decision, we are unable to discern if this comment derived from language which would have placed the parties within § 7302(d)(1)(iii) under the historical note, or if this comment was merely dicta improperly applying the law to the policy. As such, we choose to emphasize that the comment is dicta, and decline further discussion on its implications.

6 . While our Court did not explicitly address the applicability of the historical note to the Bromley policy language, the accident in Bromley occurred in 1979, meaning, presumedly, that the policy was issued pre-1980. The policy language stated that arbitration would "follow the provisions of the Arbitration Act of the jurisdiction where the arbitration takes place". Thus, we feel comfortable classifying Bromley as falling within part (1) of the historical note.

7 . A fourth case cited by appellant that arguably fits into this category as well, is Derry Twp. Mun. Auth. v. Solomon and Davis, 372 Pa.Super. 213, 539 A.2d 405 (1988). While this case did not concern an auto accident coverage dispute, and ultimately applied the rules of common law arbitration anyway, the Derry panel did discuss at length whether statutory or common law arbitration should apply. On the basis of the § 7302 historical note, the panel decided that none of the “magic language", so to speak, which would invoke application of the 1927 Act, was contained in the parties’ arbitration agreement.

8 . The Dissenting Opinion by our colleague, Judge Del Sole, finds that a different endorsement, A1091, and not the above endorsement, PP0490, contains the applicable arbitration clause. A1091 provides that, where the damages amount awarded in arbitration exceeds the “minimum limit for bodily injury liability specified by the financial responsibility law of the state in which [the] covered auto is principally garaged____ either party may demand a right to a trial.” The dissent construes this provision as granting appellant entitlement to a broader standard of review, in keeping with the aim of construing insurance contracts against the drafting insurer, and favorably to the insured. We find the dissent’s position flawed in three major respects.

Initially, the parties have agreed that the above-quoted clause, and not the clause contained in A1091, is the applicable arbitration clause. As such, any argument the appellant-insured could have made based on A1091 has been waived, see Winters, supra, (where insurer failed to argue for narrow scope of review, insurer had waived the argument). We consult other provisions in our discussion infra only in an attempt to properly construe the language of the applicable clause in PP0490.

Secondly, as conceded by the dissent, the A1091 clause applies only where damages exceeding the specified amount have been awarded in arbitration, and no damages were awarded sub judice. The dissent, however, argues that the clause provides what is essentially one-sided relief to the insurer, as only the insurer will be likely to request a retrial where the damages are too high, making the clause unconscionable. However, the insurer is not obligated by law to provide for any judicial review of arbitration awards going beyond that which is provided in common law arbitration. See 42 Pa.C.S. § 7341, 31 Pa.Code § 63.2. We are thus hesitant to label the A1091 clause as unconscionable.

Finally, we find it incorrect to attempt, as does the dissent, to equate the right to demand a trial on the issue of damages only, with the right to review the entire award for errors of law. The A1091 clause does not permit the insurer to relitigate questions of law, as is made clear by the language following the language relied upon by the dissent: “(I)f this demand [for a trial] is not made, the amount of damages agreed to by the arbitrators will be binding.” Hence, even if the dissent is arguably correct in stating that the clause unconscionably favors the insurer, the remedy would not lie in extending the clause’s language to provide for the insured a benefit never intended for the insurer.

9 . By these amendatory endorsements, some of which are dated 1980, we do know that the parties have been in a contractual relationship since 1980. However, we do not know as of what date in 1980 the contract was formed, thereby obligating us to perform this more protracted analysis.

10 . Likewise, we cannot ignore the fact that the specific reference to the 1927 Act, which would have brought this agreement within part (2) of the historical note, was deliberately omitted in the 1984 amendment. Obviously, it was the intention of the parties to provide by the 1984 amendment for arbitration under the 1980 Act, with its rules and inherent limitations upon judicial review of awards.

11 . The Concurring Opinion by our colleague, Judge Montemuro, suggests that any discussion of part 1 of the historical note is unnecessary, and that our review of previous policy provisions clouds the proper focus of our analysis, the 1984 clause. The concurrence, however, misperceives why we have elected to consult previous endorsements.

As noted above, the current arbitration clause is part of a 1984 amendatory endorsement. However, an amendatory endorsement page does not necessarily alter any and all terms in its predecessor; it may only change selected words or phrases. To put it simply, it was entirely possible that the arbitration clause had not been changed from the time of the 1980 provision. Had the language referring to the Pennsylvania Uniform Arbitration Act been contained in the 1980 provision, it would not be legally correct to term the current clause a 1984 provision; rather, it would be a 1980 provision that had continued unchanged to the present day, qualifying appellant to receive the broad scope of judicial review pursuant to part 1 of the historical note.

For this reason, we feel that review of previous policy provisions is called for herein, and is the only course of action that would be equitable to the appellant-insured. Insurance policies are to be construed, where ambiguous, against the insurer and favorably to the insured. Royal Ins. Co. (U.K.) Ltd., supra. We are obligated to scrutinize the 1984 clause, and its ambiguous terms, with an eye toward the broader construction, if justified on the basis of the 1980 policy language.