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AETNA SUR. & CAS. CO. v. SACCHETTI

April 16, 1996

AETNA SURETY AND CASUALTY CO., Plaintiff,
v.
GAIL SACCHETTI, individually and as Administratrix, Administratrix Ad Prosequendum, and Executrix of the ESTATE of ROBERT A. SACCHETTI, MIGUEL LOPEZ, P&B PARTITIONS, INC., KEYSTONE INSURANCE CO., Defendants.



The opinion of the court was delivered by: SIMANDLE

 SIMANDLE, District Judge:

 Presently before the court are defendant's motions to dismiss and to transfer venue. *fn1" Because we find that Pennsylvania law, not New Jersey law, applies to the facts of this case and that under Pennsylvania law the conflict between these parties should be resolved by arbitrators pursuant to the provisions of Aetna's policy, we will grant defendant's motion to dismiss and dismiss defendant's motion to transfer as moot.

 Background

 On July 17, 1992 Robert Sacchetti, Sr., a Pennsylvania resident working as a salesman for Edward J. Moran Lumber, a Pennsylvania company, was involved in a fatal accident in Ocean County, New Jersey while driving a company car. (Amended Compl. at PP 13-14). The company vehicle Mr. Sacchetti drove at the time of the accident was covered by a business auto policy held by Aetna which carried a per accident UIM limit of $ 1,000,000. (Id. at P 7). Edward J. Moran Lumber was located in West Chester, Pennsylvania, and the vehicles covered by Aetna's policies mainly were garaged in Pennsylvania. (Df. Br. at 5). In addition to Aetna's policy, the Sacchettis carried $ 100,000 UIM coverage on a Pennsylvania Auto Policy with Keystone Insurance Co. ("Keystone"). (Id. at 6).

 The other driver, Miguel Lopez, was a New Jersey resident who worked for P&B Partition Co., a New Jersey company. (Amended Compl. at P 15). Gail Sacchetti, Robert's widow, sued Miguel Lopez and P & B Partition Co. in Camden County Superior Court and settled with the defendants for all of Mr. Lopez's insurance coverage and almost all of P&B Partition Co.'s insurance coverage. (Id. at PP 17-19). Ms. Sacchetti notified Aetna of her intent to settle and received Aetna's consent. *fn2" (Df. Br. at 2; Df. Br. Ex. A., Letter dated May 1, 1995, from David Weinberg, Esq., to James Vernile, Esq. indicating Aetna's consent to the proposed settlement). After receiving consent, Ms. Sacchetti gave both Mr. Lopez and P&B Partition Co. releases, entered into stipulations to settle and dismiss the New Jersey state tort actions, and obtained an Order from the trial court that approved the settlement and dismissed the action. (Id. at 2).

 
a. If we and an 'insured' disagree whether the 'insured' is legally entitled to recover damages from the owner or driver of an "underinsured motor vehicle" or do not agree as to the amount of damages, either party may make a written demand for arbitration. Each party will select an arbitrator. The two arbitrators will select a third. If they cannot agree within 30 days, either may request that selection be made by a judge of a court having jurisdiction. Each party will pay the expenses it incurs and bear the expenses of the third arbitrator equally.
 
b. Arbitration shall be conducted in accordance with the Pennsylvania Uniform Arbitration Act [42 Pa.C.S.A. § 7305]. Unless both parties agree otherwise, arbitration will take place in the county in which the "insured" lives. Local rules of law as to arbitration procedure and evidence will apply. A decision agreed to by two of the arbitrators will be binding.

 The policy defined underinsured motor vehicle *fn3" at PF(3) as follows:

 
Underinsured motor vehicle means a vehicle for which the sum of all liability bonds or policies that apply at the time of an 'accident' do not provide at least the amount an 'insured' is legally entitled to recover as damages.

 On June 15, 1995, Aetna filed this action for Declaratory Judgment. Although plaintiff requested that the Court of Common Pleas stay its proceeding based on the Declaratory Action, that court issued an Order to pick arbitrators. (Df. Br. at 8; Df. Rep. Br at 1; Df. Rep. Br. Ex. 3, Order dated September 1, 1995, compelling Aetna to designate an arbitrator). The three arbitrators have been identified in accordance with the terms of Aetna's policy. (Df. Rep. Br. at 2; Df. Rep. Br. Ex. 4, Letters during the period October 25 - November 28, 1995, between the parties and their attorneys concerning the selection of the arbitrators).

 I. Motion to Dismiss

 A. Summary of Arguments

 Defendant makes several arguments in support of her motion. First, she claims that this court should decline to assume jurisdiction of this declaratory action because her suit to compel arbitration currently is pending before the Pennsylvania Court of Common Pleas. (Df. Br. at 10). Second, she argues that this case should be dismissed pursuant to Fed. R. Civ. P. 12(b)(1) and 12(b)(6) because under New Jersey choice of law principles Pennsylvania law would apply and under Pennsylvania law the issues raised in Aetna's complaint and amended complaint should be referred to arbitration. (Id. at 18-21). Third, defendant claims that because plaintiff seeks a declaration under New Jersey law, which is ...


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