Republic Ins. Co. v. Paul Davis Systems of Pittsburgh South, Inc.

• Decision Date: 04 February 1994
• Citation: 431 Pa.Super. 30,635 A.2d 1056
• Parties: REPUBLIC INSURANCE COMPANY, Appellant v. The PAUL DAVIS SYSTEMS OF PITTSBURGH SOUTH, INC., Appellee.
• Court: Pennsylvania Superior Court

Page 1056

635 A.2d 1056

431 Pa.Super. 30

REPUBLIC INSURANCE COMPANY, Appellant v. The PAUL DAVIS SYSTEMS OF PITTSBURGH SOUTH, INC., Appellee.

Superior Court of Pennsylvania.

Argued Oct. 5, 1993.

Filed Nov. 30, 1993.

Reargument Denied Feb. 4, 1994.

Frank R. Fleming, III, Pittsburgh, for appellant.

Scott T. Redman, Pittsburgh, for appellee.

Before CAVANAUGH, KELLY and BROSKY, JJ.

OPINION BY CAVANAUGH, Judge.

Republic Insurance Company appeals from the grant of summary judgment against it and in favor of Paul Davis Systems of Pittsburgh South, Inc. Summary judgment was entered by the trial court when it concluded that a release executed by Republic's subrogors, Rhett and Regina McPeake in other litigation was of such a general nature as to bar any further cause of action by the McPeakes or their subrogee, Republic, against another party.

The parties' respective interests arose as a result of the fact that Republic insured the McPeake residence. Because of a storm on May 23, 1988, the McPeake's property suffered storm damage. Paul Davis was hired to repair the damage and the roof was removed. There was another storm on June 8, 1988 and more damage was sustained by the McPeakes. Republic voluntarily paid a sum of money to the McPeakes under its homeowner's insurance responsibilities. Later, the McPeakes claimed additional unreimbursed losses and sued Republic for more money. Republic settled the claim for an additional payment of $5,000. and took in exchange the release presently under scrutiny.

Republic then asserted its subrogation interest against Paul Davis in the present action claiming, inter alia, that Davis' negligence was the cause of some or all of the losses incurred by the McPeakes and, in turn, reimbursed to them by Republic. Paul Davis interposed the release executed by the McPeakes in favor of Republic as a defense asserting that it was a general release and as such inured to the benefit of Davis. This was the basis of the summary judgment granted by the trial court against Republic.

Several basic principles of law are not in dispute: 1) the rights of a subrogee (Republic) rise no higher than the rights of its subrogors (McPeakes) and the subrogee is subject to all the defenses which could have been raised against the subrogor and, 2) the release executed in this case is clear, unambiguous and general in its terms.

In Pennsylvania, the effect of a release is determined by its language which must be interpreted according to its ordinary meaning. Brosius v. Lewisburg Craft Fair, 383 Pa.Super. 454, 557 A.2d 27 (1989), appeal denied, 524 Pa. 624, 574 A.2d 66 (1990); Vogel v. Berkley, 354 Pa.Super. 291, 511 A.2d 878 (1986). Since the present release unambiguously releases "all persons" from "all actions", it would initially appear that the trial court was obviously correct in concluding that the release was an effective bar to Republic's action. However, appellant relies on two cases in this court for its argument that the releases do not exclude Republic's claim: Sparler v. Fireman's Insurance Co., 360 Pa.Super. 597, 521 A.2d 433 (1987), appeal denied, 518 Pa. 613, 540 A.2d 535 (1988) and Farrell v. Lechmanik, Inc., 417 Pa.Super. 172, 611 A.2d 1322 (1992). In these cases this court carved out an exception to the all encompassing effect given to general releases. In Sparler, a general release given to an alleged tortfeasor was held to be ineffective against an...