J. A15026/16
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
HILDA CID, : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
Appellant :
:
v. :
:
ERIE INSURANCE GROUP A/K/A :
ERIE INSURANCE EXCHANGE A/K/A :
ERIE INSURANCE COMPANY, :
:
Appellee : No. 3041 EDA 2015
Appeal from the Order Entered August 21, 2015
In the Court of Common Pleas of Philadelphia County
Civil Division at No.: No. 1874 – June Term, 2015
BEFORE: FORD ELLIOTT, P.J.E., DUBOW, J., and JENKINS, J.
MEMORANDUM BY DUBOW, J.: FILED OCTOBER 20, 2016
Appellant, Hilda Cid, appeals from the Order of the Court of Common
Pleas of Philadelphia County sustaining the Preliminary Objections of
Appellee, Erie Insurance Exchange (“Erie”), to venue and transferring this
matter to Montgomery County. After careful review, we reverse.
The facts, as summarized by this Court in disposing of Appellant’s first
appeal, are as follows:
Hilda Cid, an Erie insured, sustained injuries in two automobile
collisions in May 2005 and March 2006. On November 15, 2011,
she filed a petition to appoint a third/neutral arbitrator and
compel UIM arbitration in Philadelphia County. Erie filed an
answer to the petition arguing, inter alia, that according to the
insurance policy, proper venue lay in Montgomery County, the
county of residence of the named insured at the time of the
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accident.[1] On November 29, 2011, Ms. Cid inexplicably filed a
second, identical petition to compel arbitration at the same
number, together with an affidavit showing service upon Erie by
certified mail. On December 8, 2011, Erie filed preliminary
objections to this second petition challenging venue and service
of process. On January 3, 2012, the court ordered Erie to file a
copy of the insurance policy and specifically reference the venue
provision to enable the court to make a preliminary
determination. Erie complied, and on January 18, 2012, the trial
court sustained Erie’s preliminary objections to venue and
dismissed the petition without prejudice for Ms. Cid to file a
similar petition in the proper venue, Montgomery County.
Cid v. Erie Ins. Group, 63 A.3d 787, 788-89 (Pa. Super. 2013).
The trial court granted reconsideration, and ultimately again sustained
the Preliminary Objections. Appellant appealed; this Court affirmed and the
Pennsylvania Supreme Court denied Appellant’s Petition for Allowance of
Appeal. Id., appeal denied, 77 A.3d 1258 (Pa. 2013). That matter is
pending in Montgomery County.2
On July 15, 2015, Appellant filed a Complaint in Philadelphia County
alleging breach of contract, fraud, bad faith, abuse of process, and civil
1
The Policy Endorsement pertaining to UM/UIM coverage provides, in
relevant part, that any disagreements over “the amount of damages[] shall
be settled by arbitration.” See Policy, UM/UIM Coverage Endorsement at 4.
The Policy further provides that “[u]nless the parties agree otherwise, the
arbitration will take place in the county and state of your legal domicile at
the time of the accident, and will follow the local rules of procedure and
evidence.” Id. (emphasis in original).
2
On March 22, 2012, the Montgomery County Court of Common Pleas
granted Petitions for the appointment of a third arbitrator and to compel
arbitration. See Appellee’s Supplemental Reproduced Record at 100b
(Docket Entries to Case #2011-32290). Neither party indicates whether
arbitration proceedings have ever commenced.
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conspiracy stemming from Erie’s handling of her claims for benefits under
the policy for her injuries suffered in the two motor vehicle accidents. Erie
filed Preliminary Objections, again asserting improper forum based on the
same forum selection clause of the Policy pertaining to arbitration of UM/UIM
disputes. Appellant responded that venue was proper in Philadelphia County
because Erie transacts substantial business in Philadelphia County, and “the
referenced venue clause applies only to the arbitration of [UM/UIM] claims
and not to extracontractual claims such as those set forth in the present
complaint.” Appellant’s Brief at 9; Appellant’s Answer to Preliminary
Objections, filed 7/21/15, at 3.
On August 21, 2015, the trial court sustained Erie’s Preliminary
Objections and ordered that the matter be transferred to Montgomery
County. The trial court stated that all of the issues raised in the Complaint
“necessitate[] a finding of whether [Appellant] is [e]ntitled to [UM/UIM]
benefits under the Policy.” Trial Court Opinion, filed 11/13/15, at 6. On
September 21, 2015, Appellant filed a Notice of Appeal.
Appellant presents one issue for our review:
Whether the trial court erred and abused its discretion in
transferring venue of this bad faith action to Montgomery County
on the basis of the uninsured/underinsured motorist claim forum
selection clause allegedly contained within [A]ppellant’s policy of
insurance?
Appellant’s Brief at 3.
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Our standard of review is well-settled. “Generally, this Court reviews a
trial court order sustaining preliminary objections based upon improper
venue for an abuse of discretion or legal error.” Autochoice Unlimited,
Inc. v. Avangard Auto Fin., Inc., 9 A.3d 1207, 1211 (Pa. Super. 2010)
(quotation and citation omitted).
Instantly, the issue involves the enforceability of a contract provision
and, thus, raises a question of law. Id. “Since the sole issue involves a
question of law, we exercise plenary review over the trial court’s decision.”
Id. (quotation and citation omitted). “When the language of the policy is
clear and unambiguous, we must give effect to that language.” Donegal
Mut. Ins. Co. v. Baumhammers, 938 A.2d 286, 290 (Pa. 2007) (quotation
and citation omitted). “However, when a provision in the policy is
ambiguous, the policy is to be construed in favor of the insured to further
the contract[’]s prime purpose of indemnification and against the insurer, as
the insurer drafts the policy and controls coverage.” Id. (quotation and
citation omitted).
Appellant first avers that “it was never proved in the trial court that
the specimen policy offered by Erie, which contained the forum selection
clause, was the policy sold to [A]ppellant. Erie therefore failed to prove that
there was even a forum selection clause at issue in this litigation.”
Appellant’s Brief at 8. Appellant failed to raise this claim before the trial
court and raises it for the first time on appeal. Therefore, this argument is
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waived. Pa.R.A.P. 302(a) (“Issues not raised in the lower court are waived
and cannot be raised for the first time on appeal.”).3
Appellant next avers that the forum selection clause relied upon by the
trial court is inapplicable because it applies only to claims pertaining to
UM/UIM coverage. Appellant asserts that “[n]othing in the clause extended
its application to derivative tort actions arising from Erie’s handling of UM
and UIM claims.” Appellant’s Brief at 7. For the reasons discussed below,
we agree.
The Policy Endorsement pertaining to UM/UIM coverage and arbitration
provides that the following disagreements shall be settled by arbitration:
1. whether or not anyone we protect is legally entitled to
recover damages from the owner or operator of an
uninsured motor vehicle or underinsured motor vehicle;
or
2. The amount of damages;
Policy, UM/UIM Coverage Endorsement at 4 (emphasis in original).
The venue provision states:
Unless the parties agree otherwise, the arbitration will take place
in the county and state of your legal domicile at the time of the
accident, and will follow the local rules of procedure and
evidence.
Id. (emphasis in original).
3
Appellant also failed to set out where this argument was raised or
preserved in her brief, as required by our Rules of Appellate Procedure. See
Pa.R.A.P. 2117(c) (“Statement of place of raising or preservation of issues”);
Pa.R.A.P. 2119(e) (same).
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With respect to claims raising issues other than UM/UIM coverage, the
Policy Endorsement provides that “all other disagreements shall be decided
by a court of competent jurisdiction and not by arbitration[,]” including but
not limited to:
1. stacking;
2. residency;
3. statutes of limitations;
4. whether or not a claimant is a person we protect under
this endorsement;
5. the validity of coverage selections or waivers executed
pursuant to the Pennsylvania Motor Vehicle Financial
Responsibility Law;
6. our rights and duties or your rights and duties under this
policy;
7. the interpretation of defined terms, the insuring
agreement, exclusions, the limits of protection, the trust
agreement, this arbitration clause, or any other of the
policy’s terms and conditions; or
8. the degree to which either party is bound by a decision
made by an arbitration panel which a party claims is
outside the scope of the arbitration.
Id. (emphasis in original).
In sustaining Erie’s Preliminary Objections, the trial court opined that
all of the issues Appellant raised in her Complaint were dependent “on a
finding of whether she is entitled to UM/UIM benefits under the Policy.” Trial
Court Opinion, filed 11/13/15, at 6. We disagree.
In the Complaint, Appellant alleged breach of contract, bad faith,
fraud, civil conspiracy, and abuse of process, each grounded in an averment
that Erie has put up numerous roadblocks, “whether proper or not, to
prevent, delay or limit [Appellant’s] recovery for the injuries, damages and
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losses that she has suffered from the injuries caused by these two
collisions.” Complaint, ¶ 10. These causes of action do not pertain to
whether Appellant “is legally entitled to recover damages from the owner or
operator of an uninsured motor vehicle or underinsured motor vehicle.”
Policy, UM/UIM Coverage Endorsement at 4. Rather, the allegations in the
Complaint essentially derive from disagreements as to the parties’ “rights
and duties … under [the] policy” and allegations of bad faith. Id. Pursuant
to the unambiguous and clear policy language to which we must give effect,
these “disagreements shall be decided by a court of competent jurisdiction
and not by arbitration[.]” Id.; see Donegal, supra. The trial court, thus,
erred in granting the preliminary objection and transferring the case to
Montgomery County on the basis of forum selection directed in the
arbitration clause of the policy.
Moreover, the trial court erred as a matter of law in concluding that
each of the claims depends on the outcome of the UM/UIM arbitration
proceeding in Montgomery County.
In her Complaint, Appellant grounded each cause of action in an
allegation that Erie has acted in bad faith. See, e.g., Complaint at ¶ 6 (Erie
“failed and refused … to fulfill their obligations to … their insured”); ¶ 7 (Erie
has “done everything in their power to delay the plaintiff’s claims, frustrate
the plaintiff’s claims, and or take actions or inactions as they attempt to limit
the plaintiff’s recovery, some proper and others that are not”); ¶ 8 (Erie has
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“failed and refused to negotiate … in good faith”); ¶ 10 (Erie “[has] done or
will do almost anything, whether proper or not, to prevent, delay or limit the
plaintiff’s recovery” under the policy); ¶ 25 (the “behavior of [Erie] in
refusing to pay benefits to plaintiff[] is a blatant breach of the fiduciary
obligations owed by [Erie] to plaintiff[] and is outrageous conduct intolerable
in a civilized society.”).
This Court has held that bad faith claims are “neither related to nor
dependent on the underlying contract claim against the insurer[,]” and an
insured is “not required to wait until the merits of the contract claim [are]
decided to file suit for bad faith.” Adamski v. Allstate Ins. Co., 738 A.2d
1033, 1039 n.5 (Pa. Super. 1999) (discussing 42 Pa.C.S. § 8371, entitled
“Actions on insurance policies.”); see also March v. Paradise Mut. Ins.
Co., 646 A.2d 1254, 1256 (Pa. Super. 1994) (reiterating that bad faith
“claims under section 8371 are separate and distinct causes of action and []
the language of section 8371 does not indicate that success on the contract
claim is a prerequisite to success on the bad faith claim”).
In support of its decision to transfer this matter to Montgomery
County, the trial court relied on O’Hara v. First Liberty Ins. Corp., 984
A.2d 938 (Pa. Super. 2009). In O’Hara, this Court upheld the applicability
of a forum selection clause in an underinsured motorist insurance policy that
limited suits to courts in the county and state of the named insured’s legal
domicile at the time of the accident. That policy stated, “You must comply
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with the terms of the policy before you may sue us. Suit must be brought in
a court of competent jurisdiction in the county and state of your legal
domicile at the time of the accident.” Id. at 941.
The trial court’s reliance on O’Hara is misplaced. That broader
insurance policy language extended to all lawsuits against the insurance
company First Liberty. Id. at 941. Here, the policy language is not as broad
and does not explicitly address Appellant’s derivative claims at issue.
Moreover, the instant policy language only limits arbitration to Appellant’s
legal domicile at the time of the accident. It does not speak to derivative
lawsuits. Accordingly, O’Hara is readily distinguishable on its facts.
Based on the foregoing, we conclude the trial court erred as a matter
of law in sustaining Erie’s Preliminary Objection. Accordingly, we reverse.
Order reversed. Case remanded for further proceedings consistent
with this Opinion. Jurisdiction relinquished.
PJE Ford Elliott joins the memorandum.
Judge Jenkins files a Dissenting Memorandum.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 10/20/2016
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