Friestad v. Travelers Indem. Co.

• Citation: 306 A.2d 295,452 Pa. 417
• Parties: Andreas FRIESTAD, t/a Superior Heating Co., Appellant, v. TRAVELERS INDEMNITY COMPANY.
• Decision Date: 02 July 1973
• Court: United States State Supreme Court of Pennsylvania

306 A.2d 295

452 Pa. 417

Andreas FRIESTAD, t/a Superior Heating Co., Appellant, v. TRAVELERS INDEMNITY COMPANY.

Supreme Court of Pennsylvania.

July 2, 1973.

Henry E. Sewinsky, Rodgers, Marks & Perfilio Sharon, for appellant.

Martin E. Cusick, P. Raymond Bartholomew, Sharon, for appellee.

Robert E. Jamison, Jamison & Jones, New Castle, for intervenor.

Before JONES C.J., and EAGEN, O'BRIEN, ROBERTS, POMEROY, NIX and MANDERINO, JJ.

OPINION

JONES, Chief Justice.

Chauncey and Anne Thompson purchased a heating system from Sears, Roebuck and Company ('Sears') in August 1957. Sears contracted with the Superior Heating Company ('Superior') to install the system. After installation, a fire destroyed the Thompson home.

The Thompsons sued Sears and recovered $20,000. Sears paid the judgment and proceeded against Superior for the amount of the judgment plus costs and legal fees associated with its defense of the Thompson claim. ^[1] Superior is insured by the Travelers Indemnity Company ('Travelers'). Pursuant to its policy, Superior demanded that Travelers defend the Sears indemnity action, but Travelers denied coverage. On March 18, 1971, Superior filed a petition for a declaratory judgment under the provisions of the Uniform Declaratory Judgments Act, Act of June 18, 1923, P.L. 840 §§ 1--16, as amended, 12 P.S. §§ 831--846, and its supplementary provisions, Act of May 22 1935, P.L. 228, §§ 1--7, as amended, 12 P.S. §§ 847--853. Superior, by its petition, asked that the lower court construe the Superior-Travelers policy of insurance to determine the extent of Travelers' obligation. The lower court dismissed the petition for declaratory judgment on August 13, 1971, on grounds that another available remedy existed, and the Superior Court affirmed the order of dismissal. ^[2] 222 Pa.Super. 559, 295 A.2d 135 (1972). We granted allocatur and agreed to consolidate this appeal with Sears' petition to intervene. ^[3]

In view of our decision here remanding this matter to the lower court, we need not pass upon the Sears petition to intervene at this time. Instead, Sears' intervention in these proceedings will be considered when and if the petition to intervene is presented in the court below.

Our primary concern in this appeal is the application of Section 6 of the Uniform Declaratory Judgments Act:

'Relief by declaratory judgment or decree may be granted in all civil cases where (1) an actual controversy exists between contending parties, or (2) where the court is satisfied that antagonistic claims are present between the parties involved which indicate imminent and inevitable litigation, or (3) where in any such case the court is satisfied that a party asserts a legal relation, status, right, or privilege in which he has a concrete interest and that either (i) there is a challenge or denial of such asserted relation, status, right, or privilege by an adversary party who also has or asserts a concrete interest therein or (ii) that there is an uncertainty with respect to the effect of such asserted relation, status, right, or privilege upon the determination of any tax imposed or to be imposed by any taxing authority . . . and the court is satisfied also that a declaratory judgment or decree will serve to terminate the uncertainty or controversy giving rise to the proceeding. Where, however, a statute provides a special form of remedy for a specific type of case, that statutory remedy must be followed; but the mere fact that an actual or threatened controversy is susceptible of relief through a general common law remedy, or an equitable remedy, or an extraordinary legal remedy, whether such remedy is recognized or regulated by statute or not, shall not debar a party from the privilege of obtaining a declaratory judgment or decree in any case where the other essentials to such relief are present. . . .' Act of June 18, 1923, P.L. 840, § 6, as amended, 12 P.S. § 836 (Emphasis added).

The controversy before us presents the question whether the legislature, by enacting Section 6 of the Act, intended the declaratory judgment to be an Optional or Extraordinary remedy. As applied to this case, the narrow issue is whether Superior can avail itself of a prior adjudication of Travelers' obligation under its policy of insurance, or whether Superior must defend the indemnity action, and, thereafter, proceed against Travelers in assumpsit to recover damages and costs paid out in defending the action by Sears. ^[4]

The legislature adopted the Uniform Declaratory Judgments Act as a 'remedial' statute intended to be 'liberally construed and administered' for the purpose of settling 'uncertainty, and insecurity with respect to rights, status, and other legal relations. . . .' ^[5] Despite this mandate, and notwithstanding the Clear and Explicit legislative intent to make declaratory judgments available though '(the) threatened controversy is susceptible of relief through a general common law remedy, or an equitable remedy, or an extraordinary legal remedy,' many of our decisions have held that a declaratory judgment proceeding would not lie if there existed another available remedy. ^[6] To the extent that these decisions rest upon the view that the Uniform Declaratory Judgments Act provides extraordinary relief which may only be invoked in the absence of another available remedy,--whether statutory or non-statutory--they are disavowed.

The setting for our decision in this case is a history of judicial vacillation spanning five decades. Chief Justice von Moschzisker, writing for the majority of the Court in Kariher's Estate in 1925, first spoke to the issue of whether the availability of an alternative remedy would preclude relief under the Uniform Declaratory Judgments Act:

'(a) proceeding to obtain (a declaratory judgment) will not be entertained where . . . another statutory remedy has been Specially provided for the character of case in hand. . . .' 284 Pa. 455, 471, 131 A. 265, 271 (1925) (Emphasis added).

The opinion of Chief Justice von Moschzisker was consonant with the express language of the Act. That is, the existence of another remedy, no matter how properly suited to a disposition of the issue upon which a declaratory judgment is sought, will not preclude a declaratory judgment proceeding unless the alternative remedy was specially provided by legislative act to dispose of a statutorily specified class of cases.

Unfortunately, the cases which followed in time the decision in Kariher's Estate engrafted upon the Act a judicially created rule that the declaratory judgment is an extraordinary remedy available only in the absence of an alternative remedy in law or equity. See Bell Telephone Co. of Pennsylvania v. Lewis, 313 Pa. 374, 169 A. 571 (1934); Nesbitt v. Manufacturers' Casualty Insurance Co., 310 Pa. 374, 165 A. 403 (1933); Sterrett's Estate, 300 Pa. 116, 150 A. 159 (1930). ^[7]

In 1943, the legislature responded to this Court's indifference to the plain meaning of Section 6: it enacted an amendment intended to remove any possible ambiguity in the Act's language in order to ensure that a declaratory judgment would lie even where an alternative remedy existed. Act of May 26, 1943, P.L. 645, § 1. Since the 1943 amendment, this Court has shifted its position on at least four occasions on the question of whether entitlement to declaratory relief is optional or extraordinary.

In Philadelphia Manufacturers Mutual Fire Insurance Co. v. Rose, 364 Pa. 15, 70 A.2d 316 (1950), the legislative mandate was heeded. The Court held that the legislature, by its 1943 amendment, 'provided that neither the fact that the defendant might have pursued his 'general common law remedy' by suing in assumpsit, nor the fact that plaintiff might have used an 'equitable remedy' to reform the policy' could debar a party from the privilege of a declaratory judgment. 364 Pa. at 22, 70 A.2d at 319--320.

The Court recanted the 'optional remedy' view in Wirkman v. Wirkman, 392 Pa. 63, 139 A.2d 658 (1958). In Wirkman, the parties to a contract determined that any dispute between them emanating from the contract would be settled by arbitration. This Court determined that the grant of a declaratory judgment would thus circumvent the contractual agreement. In affirming the lower court's dismissal of the petition for declaratory judgment, the Court asserted that '(a) declaratory judgment should not be granted where a more appropriate remedy is available.' 392 Pa. at 66, 139 A.2d at 660. ^[8]

Three years after Wirkman, this Court decided Johnson Estate, 403 Pa. 476, 171 A.2d 518 (1961). In a petition for declaratory judgment for the construction of a will, the Court held that the existence of an alternative remedy would not, in itself, prevent an adjudication by declaratory judgment. The decision in Johnson Estate was supplanted, less than one year later, by McWilliams v. McCabe, 406 Pa. 644, 179 A.2d 222 (1962). The McWilliams decision reinstated declaratory judgment as an extraordinary remedy, not an optional substitute for other available relief. The cases which followed have retained the McWilliams rule. ^[9] We reject it as an overreaching of judicial power.

When the legislature enacted Section 6 of the Act, and its several amendments, we believe it intended the common sense meaning that its language conveys. If a remedy is specially provided by statute, it must be pursued. If, on the other hand, there is another available remedy not statutorily created, whether such remedy is legal or equitable, it is only one factor to be weighed by the court in its discretionary determination of whether a declaratory judgment would lie.

There is no good reason why a rule which relegates the declaratory judgment to the status of an extraordinary remedy...