*1 not been claim has thus assistance ineffective Appellant’s waived. therefore review and is for our preserved is affirmed. of sentence Judgment in the result. NIX, J., concurred WILKINSON, JJ., did not participate KAUFFMAN this case. decision of in the H/W, Bertha, Appellants, &
Julius SCHREIBER MUTUAL LUMBERMAN’S PENNSYLVANIA COMPANY. INSURANCE Pennsylvania. Supreme Court Sept. 1981. Submitted 30, 1982. April Decided and, witnesses, his while amining most of the Commonwealth’s Dougherty Raymond questioning technique Homicide Detective designed ideal, clearly 3.46-3.53) may was (N.T. have been it not Trial points case. highlight of the Commonwealth’s the weak representation.” effective in his was therefore counsel Cargo, supra, (emphasis Commonwealth v. n. at 3 9 at supplied). *2 Friedman, Dennis L. for Philadelphia, appellants. Sorin, David for Philadelphia, appellees. O’BRIEN, J., ROBERTS,
Before C. and NIX, LARSEN, FLAHERTY, and HUTCHINSON, McDERMOTT JJ. OF THE
OPINION COURT ROBERTS, Justice. Bertha
Appellants Julius and Schreiber appeal from an order of the Court an order Superior affirming of the Court Philadelphia Common Pleas of granting motion of appellee Lumberman’s Mutual Pennsylvania Insurance Com on the pany judgment pleadings. Appellants’ sole con tention these has throughout proceedings been that limitation of suit contained in one-year provision their policy of fire not bar appellants insurance should from bringing suit on the over two and two months years after their insurance alleged loss unless can appellee company demon strate that it been prejudiced by appellants’ We delay. find and, this contention to be without merit accordingly, affirm.* 12, 1975, appellants
On November lost certain allegedly items of in an internal heater personal property explosion. reassigned present *This case was writer on March 1982. of the loss insurance company notified Appellants appellee 28,1975, 15,1975, appellants on November on November and Febru- this loss to On appellee. delivered an accounting later, filed a appellants months some ary twenty-six alleging simply in assumpsit against appellee, complaint full accounting with a had appellants provided appellee them as had not reimbursed their loss and that appellee required policy. insurance by had been answer, alleged payment In its appellee the losses prove had “failed to refused because appellants al- damages adequately prove and “failed to alleged” matter, con- addition, appellee of new leged.” way was barred tended that cause of action appellants’ insurance clause limitation of suit contained one-year policy. matter, on June did not this new answer
Appellants entered in favor of 20, 1978, on the was judgment pleadings *3 a motion for reconsidera- then filed appellee. Appellants 12,1978, tion, appellants which was granted. September On defense, affirmative appellee’s alleging only answered could not bar their limitation of suit provision one-year to itself from suit because had no appellee alleged prejudice court this rejected trial appellants’ two-year delay. on the for argument again pleadings and entered judgment A af- appellee. Superior unanimous Court panel firmed, and this allowance of granted appeal. Court
In Brakeman v. Potomac A.2d this held that a failure (1977), policyholder’s Court contract to abide a in an automobile insurance by provision claims would not bar suit on the notice of requiring timely the insurer. prejudice by Appel- absent policy showing mandates a similar conclusion lants that Brakeman argue with to the limitation of suit at regard statutory provision issue here. assertion, the rationale our
Contrary appellants’ decision case. in Brakeman is not applicable present In Brakeman, the insurer had chosen to include in its auto- that, mobile insurance a provision requiring policy accident, loss, of an occurrence or written the event “[i]n for shall be or the insured given by notice ... or of its as soon as agents practi- authorized company any cable.” and the inclusion
In reasons its examining provision in the this Court stated: policy, is not a negotiated
“An insurance contract agreement; are large by rather its conditions dictated insurance insured.” company 72, 371 196. 472 Pa. at A.2d at Because the above provision notice “as soon as was at the practicable” included requiring insurer, exclusive discretion of the this Court found the in the nature of a contract of Thus to be adhesion. provision from and held that insurer precedent this Court an departed an late prejudiced by must that it been insured’s prove invoke as a successfully notice before it can such a provision defense to a claim. contrast, the limitation of suit provision appellants’ not “dictated the insurance
fire insurance was policy Rather, to the insured.” has man- Legislature company insurance in this dáted that fire issued every policy proviso Commonwealth shall contain or action on this for the recovery any suit “[n]o court claim shall be sustainable of law or any equity . . . unless commenced within twelve months next after of the loss.” inception 682, 506, 23, 1961, 17, 1921,
Act of
P.L.
added August
May
§
636.
1081, 1,
statutory
P.L.
40 P.S.
Such
requirement
§
§
adhesion,”
imposed
can
be termed a “contract
hardly
*4
Rather,
the weaker.
it
stronger party upon
unfairly by
of a
period
determination
reasonable
represents
legislative
must be
a careful
brought,
balancing
within which suits
insurers and insureds. The
validity
the interests of both
mandated limitation of suit
provision
this statutorily
See,
General
e.g.,
Authority
been
State
consistently upheld.
We have
in
circumstances,
certain
a limi-
recognized
tation of suit
will
provision
not be
to bar a
permitted
suit: “a
of this
delayed
provision
nature
be extended or
may
waived where the
actions
the insurer lead the insured to
believe the
will
contractual
limitation
not be en-
period
forced.” General
v. Planet
State
Authority
supra,
n.6,
Pa. at 165
FLAHERTY, J., files a concurring opinion.
NIX, J., files a dissenting opinion.
FLAHERTY, Justice, concurring.
I agree with the rationale expressed the dissent au- thored Mr. Nix, Justice but concur in the result reached majority this case. The relationship between the is parties contractual, and, notwithstanding the legislatively dictated term in the insurance, contract of equitable princi- ples to this apply terms, as well as and, other indeed, the expectations based on the realities of custom and practice are to be considered. I would join well-reasoned Dis- senting Opinion were the pleaded facts sufficient to invoke the principle declares, but, which it view, in my the record has precluded me from so. doing
NIX, Justice, dissenting.
The issue raised in is appeal whether a suit limitation provision in a contract of fire insurance should be enforced *5 relief the record the insured from where seeking
to prevent
the “delay”
to
evidence that
any
prejudiced
fails
disclose
the
would
where the effect of
section
the insurer and
the
expectation
payment
frustrate the reasonable
that
follow,
that
I am of the view
insured. For the reasons
to
their
have been allowed maintain
the Shreibers should
for
under the terms of the policy.
suit
recovery
Sehreibers,
the
the
record,
In this
it is uncontroverted that
under the
insured,
precedent
fulfilled all
conditions
receive
for
existing
terms of
to
policy
compensation
their
had entered into
contract with
loss. They
of loss
in this
coverage
type
insurer for
sustained
case,
full,
was
in
paid
they
complied
their
had
premium
in
notification of the loss and
prompt
with the
terms
record
reflect
of loss. The
does not
proof
submission of the
in any
that
their institution of suit
insurer had
prior to
that the
be
communicated to
insured
claim would
way
it,
the information
supplied
or that
rejected
or
Sehreibers,
way
in
deficient
any
inadequate.
was
consideration
the issues
An
analysis
appropriate
an under-
appeal
begin
raised in the instant
must
with
law
nature of
suit limitation clause. Our
standing of the
a socie-
represents
for statutes of limitation
provides
at
tal
that
some
time individuals
point
determination
and that
liability
should
their
terminated
exposure
have
those
defend
required
stale
unfair to
inherently
claims are
v.
Estate of
Medical Center
against
them.
Gasbarini
Inc.,
(1979);
Beaver
Pa.
A.2d 343
County,
Carnahan,
v.
446 Pa.
Insurance
of North America
Company
Ins.
Metropolitan
Ulakovic v.
Life
(1971);
A.2d 728
also
Co.,
571,
Contractural
limitation of suit
like all other
provisions
contract,
terms of a
subject to
adjustment by
appropri-
ate rules of
In the
equity.
field,
insurance
of
principles
the terms
equity controlling
have evolved
policy
under the rubric of
of
right
Brake-
expectation
payment.
man v.
66,
Potomac Ins.
472 Pa.
371 A.2d
(1977);
404,
v. Nationawide Life Ins.
Rempel
370 A.2d
Commonwealth v. Transamerica Ins.
268,
For in Brakeman v. Potomac Insurance we supra, held that the insurer would not be able to defeat right of the insured recovery without first bearing burden of that the breach of proving the notice provision resulted in to prejudice the insured. In Collister Nation wide Life 388 A.2d cert. denied 439 U.S. (1979), S.Ct. L.Ed.2d 55 we said that the courts should be concerned with assuring the insurance purchasing public’s reasonable expectations are fulfilled and insurers should not be to permitted enjoy the benefit of a premium being paid at the time of applica tion, as here, was done without benefits giving comparable in return to the insured. Stasak, in August (1981) whether to Brakeman
determining give to cases applicability decision, we on time of the balanced at the appeal the insurer against hardship of forfeiture hardship insured, Brakeman. “The from a application retroactive a case, expectation had reasonable appellees late by non-prejudicial not be forfeited coverage would is being upon notice.... insurance called company indemnification, for it has re- its perform duty full can be counted as a hard- hardly ceived premiums—this ship.” Board, 497 Appeal
In Jarvis Compensation v. Workmen’s we held that an insurer (1981) Pa. 441 A.2d the insured of its failing notify breached a duty renewal Workmen’s Com- intention not to offer hold- despite contrary result was reached This pensation. *7 Co., 113, Pa. Casualty 379 ing Operators Luther v. Coal A.2d We reasoned the realities of insurance 108 691 (1954). the of expectations par- concomitant industry customs not reflected in the ration- ties of contracts were insurance ale in Luther. employed by to instant case distinguish attempts majority of fire insurance
virtue of
that
the provisions
the fact
It is
that the
are
prescribed.
argued
policies
legislatively
is not
because
appropriate
expectation
concept
of payment
in con-
normally
which is
present
the element
adhesion
of
because
the legisla-
has been removed
tracts
insurance
However,
case
our
policy
tive
imprimatur
provisions.
by
the terms are directed
although
law has
clear
made
relationship
included in such
legislature
policies
to be
i.e.,
remains
a contractual
unchanged,
between the parties
v. Planet Ins.
supra;
one. General
Authority
State
v.
Ins.
Chauvin v.
supra;
Superior
Lardas Underwriters
A. 326
397,
129
Gratz
Fire Insurance
America,
224, 127
Pa.
A. 620
Ins. Co. of North
282
of legislative prescription
policy provi-
The fact that the
does not
its fairness in
abstract
sion
indicate
may
This has
application.
its
in particular
unfairness
preclude
have permitted equita-
our courts which
recognized
been
by
prescribed
and alter
modify
legislatively
ble
principles
terms within
See,
such context.
Roberts v. Fireman’s Ins.
A.2d
cited
(1954)
in Brakeman v.
Potomac,
wherein we held
supra,
that the right
subroga-
tion,
by
afforded
the standard form of fire insurance policy
25, 1945,
under
Act of April
P.L.
Section
P.S.
657, and included in the
shall be
governed
§
by
equitable
also
principles. See
McMeekin v. Prudential
In-
surance
America,
Co.
Pa.
A.2d
(1944)
statute of limitations held not to
(six-year
bar the
right
institute suit); Arlotte v. National
Liberty
(1933)
I believe that this record requires the application equi- table to avoid the principles harsh and inequitable result the majority today countenances. It must first be posture noted that the adversarial that exists where one is from seeking an insurer of an recovery alleged tort feasor is not here Lumbermens present. undertook to protect and insulate the Shreibers from the loss which occurred here. It was that very promise protection formed basis for the relationship and for which Lumbermens received the full As indicated premium. earlier, the conditions imposed upon the insured to obtain were met. Under recovery contract, terms a carefully designed scheme has been *8 developed to reinforce of relationship trust, confidence, fairness and faith.1 good clause,2
The “When loss payable”
“Appraisal”
the
clause3
and the limitation of suit
all
provision,
legislatively pre-
Co.,
268,
1. See
v.
Commonwealth
Transamerica Ins.
462
341
Pa.
A.2d
(1975);
442,
Liberty
74
v.
Arlotte
National
Ins.
312 Pa.
167 A.
Pa.,
555,
(1933);
v.
of
Fedas
Ins. Co.
State of
300 Pa.
The scheme set forth
the loss an opportunity
evidence of
would
insured submitted
be
to examine the materials presented
to the insurer
given
the
make a
as to the
of
claim.
legitimacy
and
determination
as
the
arises
to the
of
informa-
question
adequacy
Where a
claimed,
the
the
validity
damage
tion submitted or
by
writing
filing
Company
an
pressed in
the
with this
of
award
or
provided.
as herein
Company
agree
3.
shall
loss, then,
to
as
In case the
and
fail
to the
insured
the
of
a
on the written
actual cash
or
amount
value
either,
competent
and
of
each shall select
disinterested
demand
appraiser
appraiser
notify
the
the
selected
and
other of
within
twenty days
appraisers shall first
of such demand. The
select
umpire;
failing
days
competent
agree upon
and
for fifteen
and disinterested
umpire
Company,
by
shall be
such
such
selected
property
judge of a
record in the state in which the
court of
loss,
appraisers
appraise
shall
is
The
then
covered
located.
item; and,
stating separately
and
to each
actual cash value
loss
differences, only,
failing
agree,
umpire.
submit their
shall
itemized,
any
writing,
of
two when filed with this
An award
so
Company
cash value and loss.
shall
amount
actual
determine
paid by
party selecting
appraiser
him and the
be
Each
expenses
equally.
shall
umpire
paid
parties
appraisal
shall be
V,
1921,
682,
506,
636,
May
Article
40 P.S.
4.
P.L.
§
§
See Act
as amended.
defect)
(to notify
has been held to be
5.
failure
the insured
Such
See,
part
duty
McMeekin v.
a breach of
on the
insurer.
(1944);
A.2d
v.
Ins.
Stonsz
Prudential
Soc.,
(1936);
187 A.
Equitable Life
Arlotte
Assur.
(1933);
Liberty
Paul COMPANY. MOTORISTS INSURANCE AMERICAN Pennsylvania. Supreme Court of 15, 1981. Sept. Argued 30, 1982. April Decided Pelaez, Cooper, Gilardi & Gilardi, Alfred S. Richard D. P.A., appellant. for Pittsburgh, Kirshner, appellee. Pittsburgh,
Charles ROBERTS, NIX, J., and LARSEN O’BRIEN, C. Before FLAHERTY, JJ.