Roberts v. Fireman's Ins. Co. of Newark, N. J.
| Decision Date | 04 January 1954 |
| Citation | 376 Pa. 99,101 A.2d 747 |
| Parties | ROBERTS et al. v. FIREMAN'S INS. CO. OF NEWARK, N. J. |
| Court | Pennsylvania Supreme Court |
Donald M. Bane, Prichard, Lawler & Geltz, Pittsburgh, for appellant.
A. Leonard Balter, Rubin & Balter, Leonard M. S. Morris, Pittsburgh, for appellees.
Before STERN, C. J., and STEARNE, JONES, BELL, CHIDSEY, MUSMANNO and ARNOLD, JJ.
This appeal grows out of an action in assumpsit instituted on a policy of fire insurance issued by the defendant company on a building owned by the plaintiffs. The policy carried an endorsement extending the coverage to damage caused by certain specified hazards other than fire. At trial the jury returned a money verdict for the plaintiffs. Judgment was entered thereon after the defendant's motions for judgment n. o. v. and for a new trial had been overruled; and the defendant appealed. The question involved relates to the insurance company's right of subrogation to the insureds' claim against asserted tort-feasors who allegedly caused the damage to the insured building for which the plaintiffs sought recovery under the policy. In short, did the insured discharge the insurance company from liability under the policy by voluntarily settling their claim against the alleged tort- feasors even though the insurer suffered no actual loss by reason of such settlement? Shortly after the trial, the court reporter, who had taken the testimony, died without having transcribed his notes. It later developed that no other reporter could decipher his shorthand. The appeal is now before us upon an agreed statement of facts which need by related.
The extended coverage endorsement of the policy insured the plaintiffs against loss by reason of damage to their building from, inter alia, 'vehicles', that term being expressly limited to 'vehicles running on land or tracks but not aircraft'. The subrogation clause of the policy required the insured to assign to the insurance company 'all right of recovery against any party for loss to the extent that payment therefor is made' by the company.
While the policy was in force, construction of a building on a vacant lot adjoining the plaintiffs' property was begun by a contractor. In excavating for the new structure, the subcontractor, who was digging the excavation, made use of a high-lift (an automotive machine) which is a type of bulldozer. A footer ditch was dug along a wall of the plaintiffs' building to a depth below its foundation. While the excavation work was in progress, the entire end of the insureds' building collapsed and, falling into the excavation, killed three of the contractor's employees, then working in the ditch, and seriously injured another. The damage to the insureds' building was estimated at approximately $13,000. The insured gave the company prompt written notice of their loss, claiming that the damage was due to the striking of the foundation wall by the high-life (vehicle) in the course of the excavation work. The insurance company referred the claim to an adjuster who, after investigation, declined to recommend payment, asserting that the collapse was not caused by the operation of the high-lift but because of the faulty construction of the insureds' building.
The owners of the building first instituted an action in trespass against the contractor for the damage, alleging it to have been due to his negligence in permitting the high-lift to strike the foundation wall of the building repeatedly. The contractor brought the subcontractor upon the record as an additional defendant. Subsequently, the insured instituted the assumpsit action, here involved, against the insurance company. The latter filed preliminary objections to the complaint which the insured thereupon amended. At that point the parties agreed to let the assumpsit suit lie dormant until the insureds' trespass action against the contractors had been disposed of.
In the meantime, trespass actions for damages against the contractor, the subcontractor and the owners of the building had been begun by or on behalf of the contractor's employees who had been injured or killed when the end wall of the building collapsed. One of the death actions was called for trial. The owners of the building, fearing that a verdict unfavorable to them in that case would be res judicata of their claim against the contractors, obtained an order consolidating their action against the contractors and the death action above referred to for trial. After lengthy conference, a compromise settlement of those suits was arrived at whereby the contractor and the subcontractor each agreed to pay the owners of the building $3,000. Before accepting the aggregate $6,000 settlement, counsel for the insured informed the adjuster of the status of the litigation. He told the adjuster that in his opinion the chance of the insureds' recovery against the contractors, where proof of negligence was necessary, was doubtful and that the insured should accept the settlement offer. The adjuster refused to have anything to do with the compromise or even to advise the insured as to their proper course of action. He merely reiterated his previous denial of the company's liability under the policy. The insured then accepted the settlement offer and executed and delivered to the contractors common-law releases contemporaneously with the entry of consent verdicts in favor of the insured against the contractor and subcontractor for $3,000 each. These verdicts were later satisfied. The insurance company does not allege that the insureds' settlement with the contractors was improvident or unfair. Indeed, it is conceded that counsel for the insured acted throughout with the utmost good faith.
Some two years after the insureds' settlement with the contractors, the insurance company filed an answer to the complaint in the assumpsit action. Therein the defendant alleged that (1) the high-lift was not a vehicle within the purview of the extended coverage endorsement, (2) the collapse of the building was not caused by the action of the high-life but by the faulty construction of the building's foundation, (3) the settlement with the contractors had indemnified the insured for any loss they had suffered, (4) the insured, by releasing the contractors from any further liability, had destroyed the company's right to subrogation under the policy and, hence, had discharged the company for any liability under the policy, and (5) there was no waiver by the insurance company of its contractual right of subrogation. The first three of the foregoing contentions, depending for answer upon factual findings, were resolved by the jury's verdict adversely to the defendant and have since been abandoned.
There remains then only the question arising out of the company's right of subrogation. In fact, the opinion for the learned court below, in disposing of the defendant's after-verdict motions, states that 'At the oral argument and in its brief, * * * defendant has chosen to proceed solely on the motion for a new trial' and that, in support of that motion, the only reason counsel argued was that 'the inability to secure a transcript of the record entitled him to a new trial.' On that basis, we would be warranted in disregarding the question of law based on the defendant's right of subrogation. As counsel for the appellee reminds us, 'It is our rule that questions not raised in the court below will not be heard on appeal by this court [citing cases]'. Grange Nat. Bank v. Collman, 306 Pa. 200, 203, 159 A. 26. Citing the Grange case, supra, we said in Bourd v. Berman, 359 Pa. 183, 185, 58 A.2d 442, 444, that '* * * a matter not raised or duly pursued in the court below will not, ordinarily, be considered on appeal' (Emphasis supplied.) However, it does not seem to us that the defendant either intended to or actually did abandon its contention that it was relieved of liability upon being deprived of its right of subrogation by the plaintiffs' independent settlement with the alleged tort-feasors. Rather, the defendant appears not to have pressed the question before the court en banc because there was then no transcribed record upon which to argue it. The agreed statement of facts which counsel have filed of record in connection with this appeal are sufficient for the determination of the question whether the...
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