J-S06034-17


NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

BRIDGET FERNANDEZ                                     IN THE SUPERIOR COURT OF
                                                            PENNSYLVANIA
                                  Appellant

                      v.

ERIE INSURANCE GROUP
                                                             No. 1002 EDA 2016


                Appeal from the Order Entered February 23, 2016
       in the Court of Common Pleas of Montgomery County Civil Division
                             at No(s): 2014-01257

BEFORE: MOULTON, RANSOM, and FITZGERALD,* JJ.

MEMORANDUM BY FITZGERALD, J.:                                FILED APRIL 18, 2017

        Appellant,   Bridget      Fernandez,   appeals      from   an   order   of     the

Montgomery County Court of Common Pleas granting the motion for

summary judgment of Appellee, Erie Insurance Group, to limit the amount of

Appellant’s underinsured motorist (“UIM”) benefits to $37,000.00. Appellant

objects to the trial court’s ruling that an award entered by an arbitrator in

Appellant’s    underlying      personal   injury   action    against    the   tortfeasor

collaterally   estopped     her    from   obtaining   UIM    benefits   in    excess    of

$37,000.00. We reverse and remand for further proceedings.

        On December 22, 2009, Appellant was driving her car in Bucks

County, Pennsylvania when her vehicle was struck from behind by a vehicle

driven by Holly Trask.       At the time of the accident, Trask was insured by

*
    Former Justice specially assigned to the Superior Court.
J-S06034-17


State Farm with liability limits of $50,000. On October 5, 2011, Appellant

filed a civil complaint against Trask and her husband in the Philadelphia

Court of Common Pleas at October Term, 2011, No. 336, for injuries that

she sustained in the accident.

        On October 24, 2012, counsel for Appellant notified the Philadelphia

County court that the parties agreed to submit the case to “binding

arbitration.”    R.R. 410a.1     Two days later, the court ordered the case

transferred to binding arbitration. R.R. 408a.

        On or about March 12, 2013, the arbitrator entered the following

report and award:

              This matter was submitted to me as binding sole
           arbitrator on March 12, 2013. I heard testimony from all
           parties and accepted evidence.        After hearing the
           testimony, and reviewing the evidence submitted and upon
           deliberations, I find in favor of [Appellant] and render
           the following award:

              In favor of [Appellant] in the amount of
           $87,000.00. The award is made up of $75,000.00 for
           pain and suffering and $12,000.00 for medical bills. The
           $12,000.00 figure is based on approximately $9,400.00 in
           charges from the lien that at least appeared to be related
           to this accident. I came to that figure by taking off
           amounts charged by providers that clearly were not related
           to this incident such as the Rheumatic Disease Associates
           and the surgery for [Appellant]’s cyst removal. I also
           included an additional amount for the Act VI figure bills for
           the outstanding amounts to NovaCare and Dr. Biddle. I
           understand in speaking to the parties that based on
           their prior agreement that this amount is to be
           molded to a finding in the amount of $50,000.00.

1
    For the convenience of the parties, we refer to the reproduced record.



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R.R. 411a (emphases added).

     On September 6, 2013, Appellant signed the following release entitled

“General Release In Full Settlement Of All Claims”:

           For the Sole Consideration of Fifty Thousand Dollars
        ($50,000), the receipt and sufficiency whereof is hereby
        acknowledged, the undersigned hereby releases and
        forever discharges Holly Trask and John Trask and State
        Farm Mutual Automobile Insurance Company, their heirs,
        executors, administrators, agents and assigns, and all
        other persons, firms or corporations liable or, who might
        be claimed to be liable, none of whom admit any liability to
        the undersigned but all expressly deny any liability, from
        any and all claims, demands, damages, actions, causes of
        action or suits of any kind or nature whatsoever, and
        particularly on account of all injuries, known and unknown,
        both to person and property, which have resulted or may
        in the future develop from an accident which occurred on
        or about December 22, 2009 at or near Philadelphia, PA
        and which was the subject of a lawsuit filed in the Court of
        Common Pleas of Philadelphia County at #1110 00336 and
        captioned Bridget A. Fernandez vs. John Trask and Holly
        Trask.

           This settlement include[s] any and all medical expenses
        arising from the alleged accident and any and all liens of
        any kind whatsoever, and [Appellant] expressly agrees
        that [she] shall be responsible for paying them . . .

R.R. 412a.    In between the first and second paragraphs of the foregoing

text, Appellant wrote and initialed the following: “By signing this release,

[Appellant] expressly reserves the right to pursue her underinsured motorist

claim against Erie Insurance Co.” Id.




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        On September 23, 2013, the Philadelphia County court marked

Appellant’s action against the Trasks settled, discontinued and ended. R.R.

409a.

        On January 20, 2014, Appellant filed a two-count complaint in the

Montgomery County trial court against Appellee alleging breach of contract

and bad faith under 42 Pa.C.S. § 8371. Appellant averred that: (1) Appellee

issued Appellant an auto insurance policy from the period between October

1, 2009 through October 1, 2010 which provided $250,000.00 in UIM

benefits; (2) Appellant was involved in an auto accident with Trask during

the policy period; (3) Appellant sued Trask and her husband and ultimately

obtained a settlement of $50,000.00, the bodily injury insurance coverage

limit for the Trasks’ policy with State Farm; and (4) Appellee was notified of

and consented to the settlement. R.R. 100a. Appellee admitted all of these

facts in its answer to the complaint. R.R. 121-22a.

        The trial court scheduled a jury trial for March 6, 2016. On February

18, 2016, only two and a half weeks before trial, Appellee filed a motion for

summary judgment in which it argued that the arbitrator’s award in

Appellant’s action against the Trasks collaterally estopped Appellant from

seeking damages in excess of the award. R. 380-83a. Appellee requested

the court to grant Appellant a total of $37,000.00 in UIM benefits, i.e., the

$87,000.00 arbitration award less the $50,000.00 obtained in Appellant’s

settlement with the Trasks. Id.



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      On February 22, 2016, Appellant filed a response in opposition to

Appellee’s motion for summary judgment. On February 23, 2016, the trial

court held oral argument and docketed an order granting Appellee’s motion

for summary judgment and entering judgment in favor of Appellant and

against Appellee in the amount of $37,000.00.

      On March 24, 2016, Appellant timely appealed.      Both Appellant and

the trial court complied with Pa.R.A.P. 1925.     Relying on Incollingo v.

Maurer, 575 A.2d 939 (Pa. Super. 1990), the trial court concluded that

Appellant’s arbitration award collaterally estopped her from obtaining UIM

benefits in excess of $37,000.00. Trial Ct. Op., 7/12/16, at 4-6.

      Appellant raises two arguments on appeal, which we re-order for the

sake of disposition: (1) the lower court committed an error of law in finding

the arbitrator’s award precluded Appellant’s Recovery of UIM damages in

excess of $37,000.00; and (2) the lower court unfairly prejudiced Appellant

in accepting, and ruling on, Appellee’s motion for summary judgment.

Appellant’s Brief at 8, 22.2

      We apply the following standard of review to an order granting a

motion for summary judgment:


2
  We recite the headings from Appellant’s argument section because the
argument heading states the issues clearly and because Appellant omitted
the second issue from her Statement of Question Involved in violation of
Pa.R.A.P. 2116(a).   Our disposition of Appellant’s first issue makes it
unnecessary to review her second issue.




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        We view the record in the light most favorable to the non-
        moving party, and all doubts as to the existence of a
        genuine issue of material fact must be resolved against the
        moving party. Only where there is no genuine issue as to
        any material fact and it is clear that the moving party is
        entitled to a judgment as a matter of law will summary
        judgment be entered. Our scope of review of a trial
        court’s order granting or denying summary judgment is
        plenary, and our standard of review is clear: the trial
        court’s order will be reversed only where it is established
        that the court committed an error of law or abused its
        discretion.

Daley v. A.W. Chesterton, Inc., 37 A.3d 1175, 1179 (Pa. 2012) (citation

omitted).

     In her first argument, Appellant asserts that the trial court erred in

determining that the arbitrator’s award in Appellant’s action against the

Trasks collaterally estopped her from obtaining UIM benefits in excess of

$37,000.00. We agree.

        Collateral estoppel, or issue preclusion, is a doctrine which
        prevents re-litigation of an issue in a later action, despite
        the fact that it is based on a cause of action different from
        the one previously litigated.

            Collateral estoppel applies if (1) the issue decided in
            the prior case is identical to one presented in the
            later case; (2) there was a final judgment on the
            merits; (3) the party against whom the plea is
            asserted was a party or in privity with a party in the
            prior case; (4) the party or person privy to the party
            against whom the doctrine is asserted had a full and
            fair opportunity to litigate the issue in the prior
            proceeding and (5) the determination in the prior
            proceeding was essential to the judgment.

Selective Way Ins. Co. v. Hospitality Grp. Servs., Inc., 119 A.3d 1035,

1042 (Pa. Super. 2015) (en banc) (citations and internal quotation marks


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omitted). Collateral estoppel applies when, inter alia, “a defendant seeks to

prevent a plaintiff from asserting a claim the plaintiff has previously litigated

and lost against another defendant.”      Office of Disciplinary Counsel v.

Kiesewetter, 889 A.2d 47, 51 (Pa. 2005) (citation omitted).

      Appellee argues that Appellant is collaterally estopped from obtaining

UIM benefits in excess of $37,000.00 based on the terms of the arbitration

award and the release in Appellant’s underlying personal injury action.

According to Appellee, Appellant agreed to litigate, and had full and fair

opportunity to litigate, her total amount of damages during binding

arbitration in the underlying personal injury action.    Appellee claimed that

the arbitrator’s assessment of total damages in the amount of $87,000.00

estopped Appellant from seeking UIM benefits above $37,000.00, i.e.,

$87,000.00 less the $50,000.00 paid by the Trasks’ insurer to Appellant. In

other words, Appellee viewed Appellant’s action for additional UIM benefits

as a “claim [that she] previously litigated and lost against []other

defendant[s],” the Trasks. Kiesewetter, 889 A.2d at 51.

      We agree that under collateral estoppel principles, the arbitration

award was binding on Appellant to the extent of the arbitrator’s

jurisdiction, which in turn depended on the terms of the arbitration

agreement between Appellant and the Trasks.           See Stack v. Karavan

Trailers, Inc., 864 A.2d 551, 555 (Pa. Super. 2004) (“the arbitrator's

authority is restricted to the powers the parties have granted them in the



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arbitration agreement”).   We cannot tell, however, whether Appellant and

the Trasks imposed any limit on the arbitrator’s jurisdiction.    There is no

written agreement between Appellant and the Trasks in the record, and the

arbitrator’s award is unclear on this subject. One sentence of the arbitration

award provides that an “award” in Appellant’s favor “in the amount of

$87,000.00”—an indication that the arbitrator had jurisdiction to determine

the entire amount of damages.      R.R. 411a.     Another sentence, however,

states that the arbitrator will “mold” her finding to $50,000.00 “based on

[the parties’] prior agreement . . .” Id. In this context, “prior agreement”

could mean an agreement to determine the amount of damages up to, but

not in excess of, the Trasks’ policy limits of $50,000.00.    Alternatively, it

could mean that the parties agreed that the arbitrator’s award would be

binding up to the policy limit of $50,000.00 but merely advisory above the

policy limit.   To use Appellant’s phrase, under these constructions, any

reference by the arbitrator to damages in excess of $50,000.00 would be

non-binding “dicta.”   Appellant’s Brief at 15.   The jury must resolve this

ambiguity. See Kripp v. Kripp, 849 A.2d 1159, 1163 (Pa. 2004) (citation

omitted) (“[w]hile unambiguous contracts are interpreted by the court as a

matter of law, ambiguous writings are interpreted by the finder of fact”).

      The release between Appellant and the Trasks is ambiguous as well.

The release has standard form language discharging the Trasks and “all

other persons, firms or corporations liable or, who might be claimed to be



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J-S06034-17


liable” from “any and all claims, demands, damages, actions, causes of

action or suits of any kind or nature whatsoever, and particularly on account

of all injuries, known and unknown[.]” R.R. 412a. But beneath this text,

Appellant wrote in her own hand: ”By signing this release, [Appellant]

expressly reserves the right to pursue her [UIM] claim against [Appellee].”

Id.   This handwritten proviso carves out an exception which authorizes

Appellant to pursue UIM benefits from Appellant—but it does not address

whether the arbitration award places a ceiling on recoverable UIM benefits.

      For these reasons, we disagree with Appellee’s contention that the

arbitration   award   and    the   release   collaterally   estop   Appellant   from

recovering UIM benefits in excess of $37,000.00.            The award and release

simply do not resolve this question as a matter of law, which makes the

scope of the agreement between Appellant and the Trasks a fact question for

the jury. See Kripp, 849 A.2d at 1163.

      The trial court’s reliance on Incollingo is misplaced.            There, the

plaintiff was injured in an accident with a “phantom” vehicle and sought

recovery of uninsured motorist (“UM”) benefits against his insurer. Id., 575

A.2d at 940.    An arbitration panel awarded him $70,000.00 of a possible

$90,000.00 limit under the policy. Id. Subsequently, the plaintiff and his

wife brought suit against the driver of a third vehicle involved in the accident

seeking damages for personal injuries, lost earnings and diminution of

earning capacity.     Id.   The trial court entered partial summary judgment



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against the plaintiff on the grounds of collateral estoppel, concluding the

arbitration panel had awarded the full amount of his damages in the UM

arbitration. Id. We affirmed based on our determination that “the issue of

all the damages suffered by the appellant was fully and fairly litigated at the

arbitration proceedings, and the appellant had the opportunity to present

whatever evidence he desired concerning the damages he suffered as a

result of the accident.” Id. at 942.

      Incollingo is distinguishable from the present case, because the

arbitration   award   of   $70,000.00    in     Incollingo   was   well   within   its

jurisdictional limit of $90,000.00, while the present record leaves unclear

whether the arbitrator had jurisdiction to determine Appellant’s damages

above the Trasks’ policy limits of $50,000.00.

      Accordingly, we reverse the order granting summary judgment to

Appellee and remand for further proceedings.

      Order reversed. Case remanded for further proceedings in accordance

with this memorandum. Jurisdiction relinquished.

Judgment Entered.




Joseph D. Seletyn, Esq.
Prothonotary

Date: 4/18/2017




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