Smaligo v. Fireman’s Fund Insurance Co.

Elizabeth Smaligo was a secretary for an electric company for almost 20 years before being diagnosed with schizophrenia and committed to a mental-health facility. While at the facility, Elizabeth was permitted to visit home on weekends and holidays. During one of the weekend visits, Elizabeth was struck by a hit-and-run driver and passed away. Michael and Mary Smaligo (plaintiffs), as personal representatives of their daughter’s estate, made a claim against their insurance company, Fireman’s Fund Insurance Company (insurance company) (defendant), citing the terms of their insurance agreement. The agreement stated that the company would pay all sums the insured was entitled to recover as damages. The company refused to pay the full amount requested by the Smaligos, and the Smaligos made a demand for arbitration with the American Arbitration Association. During the arbitration, the Smaligos requested a continuance to secure expert testimony from Elizabeth’s attending physician regarding her potential future earning ability and capacity. The arbitrator stated that the testimony was unnecessary and denied the continuance. The arbitrator issued a small award to the Smaligos that was significantly lower than their claimed amount. The Smaligos moved to vacate the award in Pennsylvania state court. The Smaligos argued that the arbitrator denied them a fundamentally fair hearing by refusing a continuance to get the testimony of Elizabeth’s attending physician and finding that the testimony was unnecessary to the arbitration. The trial court vacated the award, and the insurance company appealed to the Pennsylvania Supreme Court.