State Farm Mutual Auto v. Dill, B. ( 2015 )

J-E03001-14
2015 Pa. Super. 6
STATE FARM MUTUAL AUTOMOTIVE IN THE SUPERIOR COURT OF
INSURANCE COMPANY PENNSYLVANIA
Appellee
v.
BARISHA DILL
Appellant No. 3120 EDA 2012
Appeal from the Judgment Entered December 19, 2012
In the Court of Common Pleas of Philadelphia County
Civil Division at No(s): 1370 March Term, 2012
BEFORE: BENDER, P.J.E., BOWES, PANELLA, DONOHUE, SHOGAN, ALLEN,
LAZARUS, WECHT, AND STABILE, JJ.
CONCURRING AND DISSENTING OPINION BY BOWES, J.:
FILED JANUARY 13, 2015
I agree with Judge Shogan, and thus disagree with the learned
majority, that waiver is inappropriate on the facts herein. There is no
indication that Ms. Dill, who was eleven years old at the time of the accident,
or her present counsel, who did not represent her in the underlying third-
party case, had actual knowledge of Attorney Kevin McNulty’s role in that
litigation at the time of the arbitration. Furthermore, I am reluctant to
penalize Ms. Dill for failing to recall or discover Mr. McNulty’s earlier
participation, especially when Mr. McNulty maintained he had no memory of
the case and obviously did not check for possible conflicts.
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Absent waiver, I agree with Judge Donohue that this appeal requires
construction of the insurance policy language detailing the selection of
UIM/UM arbitrators. The State Farm insurance policy herein provides:
Each party shall select a competent arbitrator. These two shall
select a competent and impartial third arbitrator. If unable to
agree on a third one within 30 days, either party may request a
judge of a court of record in the county in which the arbitration
is pending to select a third one. The written decision of any two
arbitrators shall be binding on each party.
State Farm Policy at 20. A “competent arbitrator” is undefined, although it
appears that one need not be impartial to be competent. 1 I also concur with
Judge Donohue that Pa.R.C.P. 1302, governing compulsory arbitration, has
no application herein. Consequently, its incorporation of the Code of Judicial
Conduct disqualification rules does not inform our review. Hence, I disagree
with Judge Shogan’s premise that Mr. McNulty’s earlier representation of the
third-party tortfeasor automatically disqualifies him from serving as an
arbitrator in this UIM proceeding. See Canon 3(C)(1)(b).2
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1
This distinction is not an aberration. The Rules of Professional Conduct
place different constraints on subsequent representation by an attorney who
formerly acted as a neutral arbitrator and one who was “selected as a
partisan of party in a multi-member arbitration panel.” See Pa.R.Prof.C.
1.12(a) and (d).
2
The trial court concluded that after Attorney McNulty withdrew his
appearance and Daniel Lewbart, Esquire, entered his appearance, “neither
McNaulty (sic) nor any attorney in his office had further involvement in the
third party action.” Trial Court Opinion, 3/7/13, at 1. However, contrary to
the trial court’s representation, the docket reflects that Attorney Lewbart
(Footnote Continued Next Page)
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I do believe, however, that the word “competent” as used in the
policy, connotes more than knowledge, skill and expertise. In the legal
context, competence involves qualification to be a party, witness, or in this
case, an arbitrator.3 There may be situations where a skilled attorney is
incompetent to serve as an arbitrator due to a conflict of interest, present or
prior involvement with the parties, a pecuniary benefit in the outcome, or
outside knowledge of the disputed facts. His or her failure to disclose the
circumstances or withdraw may constitute an irregularity within the meaning
of 42 Pa.C.S. § 7341.4 Partiality alone, however, does not render a partisan
arbitrator in a multi-member panel incompetent to serve.
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(Footnote Continued)
was Attorney McNulty’s partner in the firm of Gerlamo McNulty Divis
Lewbart.
3
In addition to mental condition and immaturity, a person may be rendered
incompetent to be a witness by virtue of another’s assertion of a privilege.
See 42 Pa.C.S. §§ 5925, 5926, 5927 (spouses incompetent to testify against
each other in civil cases with certain exceptions). See also the Dead Man’s
Act, 20 Pa.C.S. § 2209 (defining circumstances when witnesses are
incompetent to testify against a decedent). Pa.R.E. 605 renders a presiding
judge incompetent to testify as a witness at the trial or other proceeding.
Pa.R.E. 606(a) renders a juror incompetent “to testify as a witness before
the other jurors at the trial.”
4
As counsel for the third-party tortfeasor in the underlying case, Attorney
McNulty may have been privy to facts regarding Ms. Dill’s injuries and
treatment, as well as the amounts of available coverages. Generally, UIM
arbitrators are not informed of amounts received in the prior third-party or
UIM cases, nor the applicable UM/UIM coverages. They are asked to
evaluate the injury, and after the fact, the award is molded to reflect
payments already made and available coverages. Herein State Farm
(Footnote Continued Next Page)
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Even assuming that Attorney McNulty was not competent within the
meaning of the insurance policy, and that his failure to disclose his prior
involvement or knowledge of the underlying facts constituted an irregularity
within the meaning of 42 Pa.C.S. § 7341, in my view, the setting aside of
the award is still not warranted in this case.5 Our scope of review is
extremely narrow. See McKenna v. Sosso, 745 A.2d 1, 4 (Pa.Super.
1999), citing Chervenak, Keane & Co., Inc. v. Hotel Rittenhouse
Assocs., Inc., 477 A.2d 482, 485 (Pa.Super. 1984) (review “limited to
whether the appellant was deprived of a hearing or whether ‘fraud,
misconduct, corruption or other irregularity’ tainted the award”).
This Court recently reaffirmed in F.J. Busse Co. v. Zipporah, L.P.,
879 A.2d 809, 811 (Pa.Super. 2005), that the appellant “bears the burden to
establish both the underlying irregularity and the resulting inequity by
'clear, precise and indubitable evidence.’” (emphasis supplied). In this
context, “irregularity refers to the process employed in reaching the result of
the arbitration, not to the result itself[,]” id., and the irregularity may
appear in the conduct of either the arbitrators or the parties. Paugh v.
_______________________
(Footnote Continued)
apprised the arbitrators of the amounts Ms. Dill previously received, as well
as the limits of available UIM coverage. However, Ms. Dill did not object.
Thus, I agree with the Majority that this issue is waived.
5
The Majority examined Attorney McNulty’s failure to remove himself to
determine whether it was an irregularity that would excuse Ms. Dill’s waiver
within the meaning of 42 Pa.C.S. § 7362(d). Majority Opinion, at 6 n.2.
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Nationwide Ins. Co., 420 A.2d 452, 458 (Pa.Super. 1980); see also
Nicholson Supply Co. v. Pennsy Supply, Inc., 468 A.2d 808 (Pa.Super.
1983) (vacating arbitration award where plaintiff submitted evidence ex
parte). However, the appellant must also demonstrate by “‘clear, precise,
and indubitable’ evidence” the “resulting inequity,” Chervenak, supra at
485, i.e., that the irregularity resulted in “the rendition of an unjust,
inequitable or unconscionable award.” 42 Pa.C.S. § 7341 (emphasis
supplied) (“The award of an arbitrator in a nonjudicial arbitration . . . 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.”).
Ms. Dill did not clearly demonstrate that Attorney McNulty’s prior
involvement in the third-party case tainted the process and rendered this
award unjust, unconscionable, or inequitable. In fact, she makes no
argument at all relative to this issue. My review of the record revealed that
Ms. Dill underwent physical therapy for lower back and left shoulder pain
attributed to strain and sprain twice per week for four months, and then
once per week for two additional months. N.T., 6/15/12, at 30-32. She felt
approximately forty percent better. Id. She saw a pain specialist and an
orthopedic specialist over the next two years. An MRI of her shoulder three
years after the accident was unremarkable. Although home exercises
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provided some relief, Ms. Dill stopped the regimen because “it started to
become painful.” Id. at 49. Although Ms. Dill denied that she was able to
participate in sports, she was confronted with the fact that during the spring
of her sophomore year in high school, she ran the one-hundred-yard dash,
the girls’ four-by-one-hundred relay, and participated in the long jump at the
Ches-Mont track and field championships. Id. at 77-79. Despite her
complaints of ongoing pain, she could not explain why she had not sought a
second opinion from other medical professionals.
Ms. Dill had already received $30,000 in compensation for her injuries,
a fact known by all three arbitrators. I see nothing that suggests that the
panel’s unanimous finding that no additional compensation was due was
unjust, unconscionable, or inequitable. Hence, I would affirm on that basis.
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