finding that the courts could consider whether a clause making an arbitration award binding on the insured if it did not exceed $15,000 was against public policy
How later courts described this case
- finding that the courts could consider whether a clause making an arbitration award binding on the insured if it did not exceed $15,000 was against public policy
Written by the judges who cited it.
The opinion
FORD ELLIOTT, Judge,
dissenting:
I must respectfully dissent because I do not find the challenged contract clause relevant to the arbitration award entered in this case.
*690 As the majority correctly notes, ordinarily common law arbitration awards may only be reviewed where a party clearly shows he did not get a hearing, or that fraud, misconduct, corruption or other irregularity caused the rendition of an unjust, inequitable or unconscionable award. 42 Pa.C.S.A. § 7341. This court has interpreted § 7341 to allow for review of common law arbitration awards where a provision in an insurance policy is challenged as “contrary to constitutional, legislative or administrative mandate or against public policy or unconscionable.” Caputo v. Allstate Ins. Co., 344 Pa.Super. 1, 4 , 495 A.2d 959, 961 (1985). Iii Caputo , for example, this court found reviewable a claim by Caputo that the arbitration award denying him stacked insurance coverage, permissible under Pennsylvania law, violated Pennsylvania’s public policy favoring compensating victims of uninsured motorists. 1 Thus, I could agree with the majority that the challenged provision is reviewable on public policy grounds if it affected the arbitration award.
As the majority correctly notes, however, the contract provision at issue in this case affects the parties’ rights to a trial de novo if they are not satisfied with the arbitration award. 2 Thus, the arbitrators clearly could not have based their award on the challenged clause. Additionally, by granting a new arbitration hearing, the majority does not provide the insured with any relief from the offending provision. As a result, the majority’s determination that the clause violates public policy does not affect the validity of the previously entered arbitration award, nor will it implicate the proceedings at a new arbitration hearing. I therefore respectfully dissent.
. Caputo involved a conflict-of-laws issue: the vehicle's owner resided and entered into the insurance contract in New Jersey, which did not allow stacking.
. The contract provision actually expands both parties' entitlement to review of a common law arbitration award, albeit only under circumstances favoring the insurer.