State Farm Mutual Automobile Insurance v. Dill
108 A.3d 882
Pa. Super. Ct.2015Background
- In 2003 an 11-year-old Barisha Dill was injured as a passenger in a car crash; she later sued the other driver and ultimately settled that third‑party claim for policy limits.
- Attorney Kevin McNulty briefly entered an appearance and filed an answer in the 2005 negligence suit before withdrawing; a partner from his firm later defended and the case settled in 2008.
- Dill filed an underinsured motorist (UIM) claim against State Farm; arbitration was required by the policy.
- State Farm appointed McNulty as its partisan arbitrator; Dill’s counsel appointed another arbitrator; a neutral arbitrator was appointed by the court after the parties could not agree.
- The three‑member arbitration panel unanimously ruled for State Farm. Dill moved to strike/set aside the award, arguing McNulty was partial due to prior involvement and that inadmissible collateral‑source evidence was considered. The trial court denied the motion; Dill appealed.
- The Superior Court majority held both appellate claims were waived for failure to timely object at the arbitration hearing and affirmed.
Issues
| Issue | Plaintiff's Argument (Dill) | Defendant's Argument (State Farm) | Held |
|---|---|---|---|
| Whether McNulty’s prior role in the related third‑party litigation required disqualification of McNulty as an arbitrator | McNulty’s earlier representation of the tortfeasor created presumed partiality and required disqualification; such a challenge is non‑waivable | Dill waived the claim by failing to object at the arbitration once she had or should have had knowledge; Longo permits waiver of panel composition objections | Waived. Court affirmed because Dill did not timely object at arbitration and had actual knowledge of McNulty’s earlier participation. |
| Whether the panel considered inadmissible evidence (collateral‑source payments, other materials) that tainted the award | The panel relied on improper, inadmissible materials (payments received, attorney license status, letters) undermining fairness of the hearing | Dill failed to object to admission of these materials at the arbitration hearing; failure to object results in waiver | Waived. Court affirmed because no objection was made at the hearing; claim not preserved. |
Key Cases Cited
- Donegal Ins. Co. v. Longo, 610 A.2d 466 (Pa. Super. 1992) (a party may waive objection to arbitration panel composition if it participates after learning grounds for objection)
- Tindall v. Friedman, 970 A.2d 1159 (Pa. Super. 2009) (appellate review limited to errors timely raised so they can be corrected below)
- Lockley v. CSX Transp. Inc., 66 A.3d 322 (Pa. Super. 2013) (timely, specific objection required to preserve issues for appeal)
- Abramovich v. Pennsylvania Liquor Control Bd., 416 A.2d 474 (Pa. 1980) (principle that objections must be timely raised)
- Sheehan v. Nationwide Ins. Co., 779 A.2d 582 (Pa. Super. 2001) (discussion of prior representation and arbitrator competence in arbitration selection context)
- F.J. Busse Co. v. Zipporah, L.P., 879 A.2d 809 (Pa. Super. 2005) (party seeking to vacate award for irregularity must prove both irregularity and resulting inequity by clear, precise, indubitable evidence)