Barth v. State Farm Fire & Cas. Co.

• Decision Date: 13 June 1969
• Citation: 214 Pa.Super. 434,257 A.2d 671
• Parties: Jerry BARTH, a/k/a Gerald Barth t/a Jerry's Market, Appellant, v. STATE FARM FIRE AND CASUALTY COMPANY.
• Court: Pennsylvania Superior Court

257 A.2d 671

214 Pa.Super. 434

Jerry BARTH, a/k/a Gerald Barth t/a Jerry's Market, Appellant, v. STATE FARM FIRE AND CASUALTY COMPANY.

Superior Court of Pennsylvania.

June 13, 1969.

Henry E. Skaroff, Skaroff & Skaroff Philadelphia, for appellant.

A Bricklin, Joel Paul Fishbein, Bennett, Bricklin & Saltzburg Philadelphia, for appellee.

Before WRIGHT, P.J., and WATKINS, MONTGOMERY JACOBS, HOFFMAN, SPAULDING and CERCONE, JJ.

HOFFMAN, Judge:

This is an action in assumpsit by the owner of a grocery store against an insurer which refused to make payment on an insurance policy.

Appellant the store owner, testified that he and an agent of the defendant-insurance company negotiated a contract of insurance for appellant's grocery business. They reached an understanding and thereupon the agent filled out a coverage schedule on the back of a six page foldout brochure detailing the scope of coverage available. As the representations made in the brochure are important to the disposition of this case, a brief description of the brochure follows:

The front page contains an artist's rendition of an insurance agent and an insured happily scanning an insurance policy. In prominent lettering appears the legend 'Now Cash In On Benefits of 'Package Merchandising in * * * Your Insurance.' The New Special Mercantile Package Policy Combines the Insurance for Your Business into One Neat Package for 1. Better Protection against Risks and Perils. 2. Time Saving Convenience Centralization of Coverage. 3. Premium Savings over Coverage Bought in Separate Policies. Just one policy--one agent to consult, one renewal date, and one premium to pay.' Opposite this description is a picture of an open carton labeled 'Mercantile Package Policy.'

The following three pages contain thirty-four sketches of different hazards against which the insured is protected, each accompanied by a brief textual description of the coverage involved. In addition, running across the bottom of these three pages is an insert labeled, 'A Choice of 'All Risks' Coverage * * * Plus any of these Important Coverages * * * All at Attractive Discounts!' Underneath this legend is a series of eight pictures of the types of hazards covered by this 'All Risk' insurance. One picture portrays a thief handing a typewriter to his confederate through the window of business premises. Apparently this transaction takes place when the premises are closed to business. Below this rendition appears the notation 'Open Stock Burglary, or Storekeepers Burglary & Robbery, or Comprehensive Crime, may be added.

On the last two pages appears another picture of two smiling men, apparently an insurance agent and an insured, looking into the contents of a huge open box labeled 'Special Package for Wholesalers and Retailers.'

Opposite this picture is a schedule with columns entitled 'Property and Perils Covered' and 'Coverage (Amount)'. Twenty-seven different hazards are listed under 'Property and Perils Covered.' One such category is 'Comprehensive Crime Insurance.' Another is 'Open Stock Burglary Insurance.' In the column labeled 'Coverage (Amount)' entries were made by the insurance agent in thirteen categories of hazards. Among these entries were the sum, 3,000 for Open Stock Burglary Insurance and 1,500 for Comprehensive Crime Insurance. In the column to the right of these entries appears the total insurance premium which was $256.00. Underneath this figure is an arrow within which is printed the legend 'One policy/one agent/one renewal date/one premium.'

It is undisputed that the insurance agent, who had authority to represent the insurer, typed in the various sums in the Amount column on the schedule in accordance with the directions of the store owner. Thereupon, on November 3, 1966, the agent wrote in longhand on the front page of the brochure 'Nov 3, 1966 Received $50.00 Cash to apply against SMP policy effective 11--3--66 (signed) Felix J. Longo.'

Several weeks later, appellant received an insurance policy in the mail. The policy is nineteen pages long and contains several pages of concise technical language with small print narrowly spaced.

On the sixth page of the policy is a 'Mercantile Robbery and Safe Burglary Coverage Form.' Therein, it is stated that appellant's grocery store is insured for '1,5000 for 'Robbery Inside the Premises.' Appearing below this coverage, but, outside the printed box where the coverage is listed, is the provision that the coverage shall only be in effect 'when the premises are open for business.'

Appellant, upon receiving the insurance policy, did not read it.

Thereafter, before the term of the policy had expired, cash which had been secreted in hiding places about the store was stolen during non-business hours.

Appellant made demands upon the insurer to reimburse him for his loss and such payment was refused.

Thereupon this action was brought.

Trial was held before Judge O'DONNELL sitting without a jury. At trial, the insurer denied coverage and maintained that its agent told appellant that the policy would not insure him against robberies 'occurring during non-business hours and when no one was on the premises.' This testimony was disputed.

Judge O'DONNELL found for the insurance company. Exceptions were filed. Judge O'DONNELL died, however, before passing on these exceptions, writing an opinion or otherwise indicating findings of fact and conclusions of law.

The lower court sitting en banc, affirmed and this appeal followed.

As Judge MONTGOMERY has stated 'Since the court made no specific findings of fact or conclusions of law but merely rendered a decision, it now becomes our responsibility on this appeal to review the entire record and attempt to make our own determination of the facts and draw our own conclusions of law based thereon. (Citations omitted).' Smith v. Peacock Construction Company, Pa.Super., 257 A.2d 592 (1969).

The thrust of appellant's argument is that the insurance company led him to rely on the representations made in the insurance brochure, and that the representations should be considered as elements of the contract. Specifically, he maintains that the brochure's description of 'Comprehensive Crime Insurance' and other representations of 'all risk' 'single package' one policy protection were so misleading as to constitute an estoppel which would excuse him from reading the policy and ascertaining whether the language therein coincided with the brochure's representation.

Couch on Insurance 2d (Anderson Ed., 1959) states: 'Generally it may be said that a prospectus, pamphlet, schedule, or illustration which is not attached or referred to in the policy, does not form a part of the contract, and is not binding on the insurer. However, the facts may be such as to warrant a different conclusion, as, for example, where published advertisements which were knowingly false have been regarded as rendering the company liable to one who acted upon the statements therein.' § 4:42 (Emphasis added).

While our research and that of the parties have failed to uncover any Pennsylvania cases dealing explicitly with this doctrine, several helpful cases from other jurisdictions have come to light. For instance in Coastal States Life Ins. Co. v. Raphael (1966, Fla.App.), 183 So.2d 274, the court affirmed the chancellor's decree that the life insurance policy in question be reformed to include the

terms of a prospectus furnished to plaintiff by the insurer's agent, which prospectus, containing provisions for payment or return in somewhat greater amount than the policy in certain respects, was relied on by the...