327 A.2d 363 (Pa.Super. 1974), Hionis v. Northern Mut. Ins. Co.

Citation:327 A.2d 363, 230 Pa.Super. 511
Opinion Judge:Author: Hoffman
Party Name:Alexander HIONIS v. NORTHERN MUTUAL INSURANCE COMPANY and Nationwide Mutual Fire Insurance Company, Appellants.
Case Date:September 23, 1974
Court:Superior Court of Pennsylvania
 
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327 A.2d 363 (Pa.Super. 1974)

230 Pa.Super. 511

Alexander HIONIS

v.

NORTHERN MUTUAL INSURANCE COMPANY and Nationwide Mutual Fire

Insurance Company, Appellants.

Superior Court of Pennsylvania.

September 23, 1974.

[230 Pa.Super. 512] Fronefield, deFuria & Petrikin, Peter A. Dunn, Media, for appellants.

Rodger L. Mutzel, Media, for appellee.

Before WATKINS, Presiding Judge, and JACOBS, HOFFMAN, CERCONE, PRICE, VAN der VOORT and SPAETH, JJ.

[230 Pa.Super. 513] HOFFMAN, Judge:

This is an appeal from a directed verdict in favor of the plaintiff for damages recovered under two insurance policies for fire loss.

On July 13, 1970, the plaintiff-appellee was the lessee of premises located at 625 Welsh Street in the City of Chester, where he was trading under the name of the Welsh Restaurant. On that date, the restaurant was destroyed by fire, together with its contents, improvements and fixtures. Plaintiff gave prompt notice of his loss to the defendant insurance companies demanding payment of full coverage under the combined policies. 1 Despite combined coverage of $49,500.00, defendants denied liability for the full amount and tendered

Page 364

the sum of $12,733.86 as their estimate of the amount owed. Payment was refused, and suit was instituted in the Court of Common Pleas of Delaware County. On March 19, 1973, the case was tried before the Honorable C. Norwood Wherry and a jury.

The plaintiff introduced the insurance policies to evidence improvements and betterments coverage in the amounts claimed. Defendant did not contest the policy limits but maintained that since plaintiff did not repair or replace the improvements destroyed in the fire, he was entitled only to a proportionate amount of the cost of said improvements. The controversy centered around the following relevant portions of the policies:

'(E) Improvements and Betterments Coverage:

(Applies only when insured is not the building owner) When the insurance under this policy covers Improvements and Betterments, such insurance shall [230 Pa.Super. 514] cover the insured's use interest in Improvements and Betterments to the described building.

(1) The term 'Improvements and Betterments', wherever used in this policy, is defined as fixtures, alterations, installations, or additions comprising a part of the described building and made or acquired at the expense of the insured, but which are not legally subject to removal by the insured.

(2) The word 'Lease' wherever used in this policy, shall mean the lease or rental agreement, whether written or oral in effect as of the time of loss.

(3) In the event improvements or betterments are damaged or destroyed during the term of this policy by the perils insured against, the liability of this company shall be determined as follows:

(a) If repaired or replaced at the expense of the insured within a reasonable time after such loss, the actual cash value of the damaged or destroyed improvements and betterments;

(b) If not repaired or replaced within a reasonable time after such loss, that portion of the original cost at the time of installation of the damaged or destroyed improvements and betterments, which the unexpired term of the lease at the time of the loss bears to the period(s) from the date(s) such improvements...

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