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Brooks v. Pennsylvania Manufacturers'' Association Insurance Co.

Decided: October 26, 1972.

CLARK W. BROOKS, PLAINTIFF-RESPONDENT,
v.
PENNSYLVANIA MANUFACTURERS' ASSOCIATION INSURANCE COMPANY, DEFENDANT-APPELLANT



Fritz, Lynch and Seidman. The opinion of the court was delivered by Seidman, J.s.c., Temporarily Assigned.

Seidman

Defendant Pennsylvania Manufacturers' Association Insurance Company appeals from so much of an order entered below as vacates part of an arbitration award in plaintiff's favor. The facts are not in dispute. At issue is whether, in arbitration pursuant to the terms of an uninsured motorist provision in an automobile liability policy, a credit is allowable for the present value of an amount which might be payable to the claimant as the result of a pending and undetermined workmen's compensation action.

Plaintiff Clark W. Brooks, a truck driver, sustained bodily injury on June 3, 1970, in Pennsylvania, as the result of a collision with an uninsured vehicle. His employer was covered for both workmen's compensation and automobile liability in a policy or policies issued by defendant.

On December 9, 1970, acting as the workmen's compensation carrier, defendant filed a petition for termination with the Pennsylvania Department of Labor and Industry, Bureau of Workmen's Compensation, claiming plaintiff had suffered no loss in earning power because of his injuries. Challenging the allegations of the petition, plaintiff brought an action for workmen's compensation in the Commonwealth of Pennsylvania. Those proceedings, apparently, are still pending, since, at oral argument, counsel did not advise us otherwise.

In February 1971 plaintiff made a demand for the arbitration of his claim under the uninsured motorist provisions of his employer's liability policy. After a hearing the appointed arbitrator awarded plaintiff $10,000 less these deductions:

a. ONE THOUSAND FOUR HUNDRED SEVENTY-NINE DOLLARS AND FORTY-THREE CENTS ($1,479.43), previously paid by PENNSYLVANIA MANUFACTURERS ASSOCIATION INSURANCE COMPANY.

b. A credit shall be allowed for the present value of all amounts payable in proceedings presently pending in the Workmen's Compensation Courts of the Commonwealth of Pennsylvania,

the exact amount of which is presently unknown, but which will be determined when a final determination in the Pennsylvania proceedings has been made.

Thereafter, plaintiff obtained in the court below an order to show cause why judgment should not be entered confirming the net award of $8520.57, and vacating that portion allowing a credit for the present value of all amounts payable in the workmen's compensation proceeding. The trial judge modified the award by striking therefrom paragraph (b). The remainder was confirmed, and judgment was entered in favor of plaintiff and against the defendant in the sum of $8520.57.

Defendant complains only of that portion of the order which struck the deduction contained in paragraph (b). Two points are urged: (1) the trial judge lacked jurisdiction to vacate that part of the arbitration award, and (2), assuming he had power to do so, the vacation was improper and contrary to the terms of the policy.

I

The grounds for vacating an award made by an arbitrator are limited to those set forth in the Arbitration and Award Act, N.J.S.A. 2A:24-8, the pertinent one of which, contained in subparagraph (a), is where the award "was procured by corruption, fraud or undue means." Neither corruption nor fraud is, of course, involved herein. "Undue means" is explained in Held v. Comfort Bus Line, Inc. , 136 N.J.L. 640 (Sup. Ct. 1948):

The phrase "undue means" comprehends two other distinct classes of cases -- i.e. (1) where the arbitrator meant to decide according to law, and clearly had mistaken the legal rule, and the mistake appears on the face of the award or by the statement of the arbitrator; and (2) where the arbitrator has mistaken a fact, and the mistake is apparent on ...


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