Opinion
Docket No. 78-3545.
Decided March 5, 1980. Leave to appeal applied for.
Selby, Dickinson, Pike, Mourad Brandt (by Ronald R. Hanlon), for plaintiff.
Lopatin, Miller, Bindes, Freedman, Bluestone, Erlich Rosen (by Steven G. Silverman), for defendant.
Before: D.C. RILEY, P.J., and R.B. BURNS and D.E. HOLBROOK, JR., JJ.
Defendant, while operating a pickup truck insured by plaintiff, was injured in an accident involving an uninsured motorist. Defendant was a named insured under the truck's policy and under another policy issued by plaintiff on defendant's automobile. Both policies had a maximum uninsured motorist recovery limit of $20,000 and both contained the following exclusions clause:
"The insurance afforded by this coverage does not apply: "(1) to bodily injury to an insured sustained while occupying any automobile, other than an owned automobile, except a non-owned automobile to which there is applicable and available to such insured no insurance similar to that afforded by this coverage".
Defendant claimed that her insurance coverage should be "stacked" to allow a maximum recovery of $40,000. As provided in the policies, the claim was submitted to an arbitration panel and defendant received an award of $35,000. Plaintiff filed a motion in circuit court seeking to vacate the arbitration award, arguing that the policies' exclusions clauses limited the company's liability to $20,000. The circuit court denied plaintiff's motion.
The parties do not dispute that under a literal application of the policies' exclusions clauses plaintiff's liability is limited to $20,000. Rather their dispute is centered on whether the arbitration panel had the power to reject the exclusions clauses if it found that the application of the clauses would produce an unconscionable result.
An arbitration award will be vacated by the court when an arbitration panel exceeds its powers. GCR 1963, 769.9(1)(c). At the time the arbitration panel made its award to defendant, it was unclear whether the panel had the power to "stack" the insurance coverage. Before the repeal of Michigan's uninsured motorist statute, MCL 500.3010; MSA 24.13010, Michigan case law required "stacking" of uninsured motorist coverage. Blakeslee v Farm Bureau Mutual Ins Co of Michigan, 388 Mich. 464; 201 N.W.2d 786 (1972), Boettner v State Farm Mutual Ins Co, 388 Mich. 482; 201 N.W.2d 795 (1972). The rationale underlying these decisions was eliminated by the repeal of the uninsured motorist statute and the passage of the Michigan no-fault act, MCL 500.3101 et seq.; MSA 24.13101 et seq. With these events, the Michigan courts were left to contend with the issue of "stacking"; and results of a varying nature have been produced. Leave to appeal has been granted by the Michigan Supreme Court in two cases which discuss this issue, and a definitive answer is now near. State Farm Mutual Automobile Ins Co v Davidson (Docket No. 29626, decided July 25, 1977, [unreported]), lv gtd 402 Mich. 950q (1978), Fletcher v Aetna Casualty Surety Co, 80 Mich. App. 439 ; 264 N.W.2d 19 (1978), lv gtd 402 Mich. 950s (1978).
Due to the unsettled nature of the Michigan law at the time of the arbitration award it was impossible for the arbitration panel to know with certainty whether it did or did not have the power to reject the application of the policies' exclusions clauses. The arbitrators chose to exercise that power and their choice can be supported by case law. See, e.g., Fletcher, supra. Under these circumstances, we agree with the circuit court that the arbitration award should not be vacated.
Affirmed.