A Summary Of Recent Pennsylvania Appellate Decisions

PENNSYLVANIA STATE COURT DECISIONS It seems as though the Pennsylvania Supreme Court ends every calendar year by issuing numerous Opinions, with the volume increasing any year in which a Justice is leaving the bench. With Justice Nigro's unceremonious removal from the bench at the behest of voters irate because the legislature decided to award a large pay raise to itself and the judiciary, 2005 was no exception. Consequently, the decisions reviewed in this issue are grouped by Court rather than by topic. 1. SUPREME COURT OF PENNSYLVANIA 1.1. AUTOMOBILE INSURANCE ► Uninsured & Underinsured Motorist Claims ♦ Insurance Federation of Pennsylvania, Inc. v. Commonwealth, Department of Insurance No. 2007 MAP 2003 (December 30, 2005) Holding: The Insurance Department overstepped its legislative mandate and does not have the authority to require mandatory binding arbitration in uninsured and underinsured motorist disputes. Consequently, insurance carriers may require that UM and UIM claims be resolved in the courts or, presumably, by other means specified under the insurance contract. Justice Saylor filed a dissenting opinion, joined by Justice Castille. This decision will likely portend the demise of arbitration as the preferred method for deciding uninsured and underinsured motorist claims. It seems ironic, however, that carriers would seek to avoid arbitration when insurers, credit card companies, and businesses of all types, are including arbitration clauses in their agreements. Of course, these anti-consumer provisions generally preclude appeals, limit punitive damages, and otherwise restrict the nature of allowable claims. It is safe to assume that auto insurers will likely propose similar provisions for approval by the Insurance Department. With this Supreme Court Opinion, the question arises whether the Insurance Department can prohibit such provisions. Time will tell. ♦ State Farm Mutual Automobile Insurance Co. v. Foster No. 2007 MAP 2003 (December 30, 2005) Holding: An insurer may deny uninsured motorist benefits to an insured claimant who fails to report the accident to the police or other governmental authority as required by the policy and the Motor Vehicle Financial Responsibility Law, 75 Pa.C.S.