Wednesday, September 12, 2012

Judge Nealon Addresses Scope of Review of UM Arbitration Panel

In his recent decision in the case of Roberts v. Travelers Insurance Company, No. 2012-Civil-539 (C.P. Lacka. Co. Aug. 24, 2012 Nealon, J.), Judge Terrence R. Nealon of the Lackawanna County Court of Common Pleas addressed the issue of the scope of the arbitrators’ authority and whether a certain issue presented in an uninsured motorist (UM) matter should be decided by a arbitration panel or, in the alternative, the court by way of a declaratory judgment action.

The insureds in this matter were allegedly injured in a multi-vehicle chain collision accident. The insured presented claims for uninsured motorist benefits after they were unable to determine which of the eight other vehicles involved in the accident had impacted their vehicle. The uninsured motorists carrier denied the UM claims presented.

Thereafter, the insureds demanded a UM arbitration pursuant to policy language provided for common law arbitration of the issue of whether the operator of a “uninsured motor vehicle” is “legally liable” to the insureds for damages.

The carrier opposed the insureds’ request for arbitration and asserted that only a court of law could address the insureds’ right to recover UIM benefits since the claims presented involved an interpretation of the phase “uninsured motor vehicle” as set forth in the UM policy at issue.

Judge Nealon ruled that, under the terms of the policy, to recover UM benefits, the insureds must prove that the operator of an “uninsured motor vehicle” caused the accident in question and is, therefore, “legally liable” to them.

Judge Nealon noted that the question of fault and the statutory and policy definitions of an “uninsured motor vehicle” are “inevitably intertwined and inseverable in this case. Roberts at p. 2. The court in Roberts ruled that, since the policy provided the arbitrators with the authority to determine whether the operator of an “uninsured motor vehicle” is “legally liable” to the insureds, the UM claim should be decided by the arbitrators even though the insureds’ right to cover implicated the definition of an “uninsured motor vehicle.”

Accordingly, Judge Nealon ruled that the parties’ UM dispute was indeed within the scope of the arbitration agreement. Accordingly, the court granted the insureds’ Petition to Compel Arbitration.

Anyone desiring a copy of this decision may contact me at

I send thanks to Attorney Jim Kilpatrick of the Scranton law firm of Munley, Munley & Cartwright for forwarding this decision to my attention.

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