Cid, H. v. Erie Insurance Group
3041 EDA 2015
| Pa. Super. Ct. | Oct 20, 2016Background
- Hilda Cid, an Erie insured, suffered injuries in two car collisions (2005, 2006) and previously sought UM/UIM arbitration; a prior petition was transferred to Montgomery County under a policy forum-selection/arbitration clause and that transfer was litigated on appeal.
- In July 2015 Cid filed a new complaint in Philadelphia County asserting breach of contract, bad faith (42 Pa.C.S. § 8371), fraud, abuse of process, and civil conspiracy based on Erie’s handling of her UM/UIM claims.
- Erie filed preliminary objections asserting improper venue based on the policy’s UM/UIM arbitration venue clause (arbitration to occur in the county of the named insured’s legal domicile at time of accident).
- The trial court sustained Erie’s preliminary objections and transferred the case to Montgomery County, reasoning the claims depended on entitlement to UM/UIM benefits and thus fell within the forum-selection clause.
- Cid appealed; the Superior Court reviewed de novo whether the policy language controlled and whether the arbitration/venue clause applied to her extracontractual claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the policy’s UM/UIM arbitration/venue clause requires transfer of Cid’s bad-faith and related claims to Montgomery County | Cid: the clause applies only to UM/UIM coverage disputes (entitlement/amount) and not to extracontractual/derivative claims (bad faith, fraud, etc.); venue is proper in Philadelphia | Erie: the forum-selection clause governing arbitration in the insured’s domicile governs venue for related litigation and thus supports transfer to Montgomery County | Reversed: clause applies only to covered arbitration disputes; extracontractual claims and disputes about parties’ rights/duties under the policy are for a court, so trial court erred in transferring venue |
| Whether Erie proved the specimen policy containing the clause was the policy issued to Cid | Cid: Erie failed to prove the specimen policy was her actual policy | Erie: relied on policy language and prior proceedings asserting the clause applies | Waived on appeal: Cid did not raise this issue below, so it cannot be considered now |
| Whether bad-faith claims are dependent on resolution of the UM/UIM arbitration | Cid: bad-faith claims are distinct and may be filed before resolution of coverage/contract claims | Erie: asserted the complaint necessarily depends on entitlement to benefits | Court: bad-faith claims are separate from contract entitlement and need not await arbitration; they do not depend on UM/UIM arbitration outcome |
| Whether O’Hara controls transfer here | Erie/trial court: O’Hara upheld a broad policy forum-selection clause requiring suits in insured’s domicile | Cid: O’Hara is distinguishable because that policy’s language was broader and applied to all suits; this policy limits only arbitration | Court: O’Hara is distinguishable; policy here confines the forum-selection to arbitration, not derivative tort suits, so it does not mandate transfer |
Key Cases Cited
- Donegal Mut. Ins. Co. v. Baumhammers, 938 A.2d 286 (Pa. 2007) (clear policy language must be enforced; ambiguities construed for insured)
- Cid v. Erie Ins. Group, 63 A.3d 787 (Pa. Super. 2013) (prior appeal addressing venue/arbitration dispute between these parties)
- O’Hara v. First Liberty Ins. Corp., 984 A.2d 938 (Pa. Super. 2009) (upheld broad forum-selection clause requiring suits in insured’s domicile)
- Adamski v. Allstate Ins. Co., 738 A.2d 1033 (Pa. Super. 1999) (bad-faith claims under § 8371 are separate from contract claims and may be filed before contract resolution)
- March v. Paradise Mut. Ins. Co., 646 A.2d 1254 (Pa. Super. 1994) (bad-faith claims are distinct causes of action)