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Nealy v. State Farm Mut. Auto. Ins. Co.

Nealy v. State Farm Mut. Auto. Ins. Co.

Superior Court of Pennsylvania

April 15, 1997, Argued ; May 8, 1997, FILED

No. 00684 Harrisburg 1996

Opinion

 [*790]  OPINION BY OLSZEWSKI, J.:

FILED: MAY - 8, 1997

On February 6, 1989, Troy Nealy, son of appellants Robert and Marylin Nealy, was killed in an automobile accident in Cumberland County. At the time of the accident, appellants were insured by two policies issued by appellee, State Farm Mutual Automobile Insurance Company. The policies provided general liability limits of $ 250,000 and $ 100,000, respectively. The underinsured motorist coverage for each policy, however, was limited to $ 25,000 due to signed waivers requesting such lower coverage pursuant to 75 Pa.C.S.A. § 1734. 1

 [**2]  75 Pa.C.S.A. § 1734.

 [*791]  Following State Farm's denial of the Nealys' requested benefits, the Nealys commenced suit in the Court of Common Pleas of Cumberland County against both State Farm and H. David Miller, Jr., the Nealys' State Farm representative. The Nealys alleged that the waivers signed pursuant to 75 Pa.C.S.A. § 1734 were invalid and that Miller was negligent in failing to obtain for them $ 250,000/$ 500,000 in stacked uninsured/underinsured motorist benefits.

Almost one year thereafter, on June 11, 1991, the Nealys moved to sever the claim against State Farm from that against Miller, asserting that the claim against State Farm fell within the mandatory arbitration provisions of their insurance policies. On October 9, 1991, the trial court granted the Nealys' request and ordered that the claim against State Farm proceed to arbitration pursuant to the Pennsylvania Uniform Arbitration Act, 42 Pa.C.S.A. § 7301 et seq.

Prior to the arbitration hearing, the Nealys identified four issues that would comprise their claim. These issues were (1) the liability of the automobile driver, Benjamin Kutz; (2) the damages sustained due to Troy Nealy's death; (3) the limits of [**3]  the underinsured motorist coverage available to respond to the damage claim; and (4) whether State Farm acted in bad faith in refusing to honor the Nealys' initial claim.

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695 A.2d 790 *; 1997 Pa. Super. LEXIS 1299 **

ROBERT F. NEALY AND MARYLIN K. NEALY, ADMINISTRATORS OF THE ESTATE OF TROY ROBERT NEALY, DECEASED, Appellants v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY AND H. DAVID MILLER, JR., Appellees

Subsequent History:  [**1]  Petition for Allowance of Appeal Denied March 3, 1998, Reported at: 1998 Pa. LEXIS 314.

Prior History: Appeal from JUDGMENT ENTERED August 6, 1996, in the Court of Common Pleas of CUMBERLAND County, No. 2885 CIVIL 1989. Before HESS, J.

Disposition: Affirmed.

CORE TERMS

arbiters, trial court, bad faith, insured, arbitration panel, arbitration, bad faith claim, insurance policy, damages, courts, arbitration award, public policy, contractual

Insurance Law, No Fault Coverage, Personal Injury Protection, General Overview, Damages, Punitive Damages, Remedies, Penalties, Civil Procedure, Trials, Jury Trials, Jury Demands, Right to Jury Trial, Punitive Damages, Constitutional Law, Bill of Rights, Fundamental Rights, Trial by Jury in Civil Actions