Ryan v. Furey

Decision Date30 January 1970
Docket NumberNo. 190,Nos. 189 and 190,Nos. 189,No. 189,190,189,s. 189 and 190,s. 189
Citation262 A.2d 305,437 Pa. 96
PartiesMatthew J. RYAN, III, Administrator of the Estate of Nicholas Wasylina, Deceased, and the Estate of Mary Wasylina, Deceased, Appellee in, and Eugene Wasylina, a minor, by Nick Wasylina, his Guardian, Appellee in, v. E. William FUREY, Administrator of the Estate of John Edward McGinn, Deceased, and Curtis E. Mapes, Administrator of the Estate of Margaret M. Milmoe, Deceased, and the Hertz Corporation, and Royal Indemnity Company, Appellant in
CourtPennsylvania Supreme Court

Victor L. Drexel, Philadelphia, Robert E. Siegrist, Lebanon, for appellant.

Bernard A. Buzgon, Lebanon, for appellee Matthew J. Ryan, III, Admr. of Estate of Nicholas Wasylina, Dec'd and Estate of Mary Wasylina, Dec'd.

Before BELL, C.J., and JONES, COHEN, EAGEN, O'BRIEN, ROBERTS and POMEROY, JJ.

OPINION

JONES, Justice.

On January 24, 1967, the Court of Common Pleas of Lebanon County entered judgments on jury verdicts in trespass actions against the Estates of Margaret Milmoe (Milmoe) and John McGinn (McGinn) and in favor of Matthew J. Ryan, III, Administrator, and Eugene Wasylina, a minor, by Nick Wasylina, his guardian.

On February 1, 1967, an attachment execution proceeding was issued against Royal Indemnity Company (Royal), garnishee, on the basis that it was the insurer of Milmoe and McGinn. The pleadings proceeded under Pa.R.Civ.P. 3145, 12 P.S. Appendix, whereunder interrogatories and the answers thereto in an attachment execution proceeding serve as the pleadings. See: Helms v. Chandler, 423 Pa. 77, 223 A.2d 30 (1966); Hanchey v. Elliott Truck Brokerage Co., 421 Pa. 131, 218 A.2d 743 (1966). Plaintiffs then filed motions for summary judgment in accordance with Pa.R.Civ.P. 1035.

By Order of the Court of Common Pleas of Lebanon County dated November 7, 1968, subsequently amended, the court granted summary judgment to the plaintiffs in their respective cases against Royal, in the amounts of the original judgments against the Estates of Milmoe and McGinn, with interest from the date of entry of judgments on the verdicts.

The essential facts out of which the original litigation arose were that on June 6, 1964, a vehicle owned by Hertz Corporation collided with a vehicle operated by one of plaintiffs' decedents, thereby causing the death of both plaintiffs' decedents, severe injuries to their minor son, Eugene Wasylina, and death to Margaret Milmoe and John McGinn. Milmoe and McGinn were both in the Hertz automobile, which had been leased under a rental agreement dated June 6, 1964, in Washington, D.C., by Margaret Milmoe, who had furnished Hertz with her operator's license number and Washington, D.C. address.

Royal admitted that as of June 6, 1964, there was in full force and effect a liability policy f insurance pursuant to which automobiles rented by Hertz Corporation were furnished with liability coverage under and subject to the terms and conditions contained in the policy. Royal denied coverage and refused payment to the respective plaintiffs, asserting that there was no coverage under the policy.

On this appeal the appellant-garnishee, Royal, makes three arguments. First, Royal claims that the policy was invalid because Milmoe, in renting the car, had presented a credit card issued to McGinn, identifying the possessor as an authorized representative of the Peace Corps, although the authority of anyone to use that card had been revoked. We are in agreement with the court below that such misrepresentation neither voided the rental contract with Hertz nor rendered the garnishee's insurance policy inoperative. Under the terms of the insurance policy, the word 'insured' included the named insured and also '(1) any person * * * to whom an automobile has been rented without a chauffeur by the named insured.' Milmoe would appear to fall within the scope of this clause since she was a renter of a Hertz automobile. Nowhere does the rental agreement state that it is ineffective if an individual uses a credit card, which he is not authorized to use, to gain an extension of credit. The only clauses at all relevant are those which prohibit the operation of the car 'by any person who has given to lessor a fictitious name or false age or address' and which indicate that the insurance policy does not apply under these circumstances. Since it is undisputed that Milmoe supplied her proper name, age and address, the contract cannot be voided on these grounds.

The decisive factor to show that the rental agreement is effective, even if the customer supplies a credit card which he is unauthorized to use, is paragraph 3 of the agreement: '* * * If Customer has directed the billing for charges to be transmitted to another person, firm or organization who or which upon being so billed, shall fail to make payment, Customer will, upon demand of Lessor, promptly pay said charges.' Paragraph 3 thus contains a built-in method for collection of the cost of a rental which has been charged to another who has ultimately refused to pay. Not only does the question of credit not affect the validity of the rental agreement, but paragraph 3 reaffirms it in this very situation and provides for the enforcement thereof. Since Milmoe herself was responsible for payment, it was irrelevant whether she was authorized to travel by the Peace Corps.

The policy, like the rental agreement, was to be inoperative if secured 'by a renter or driver who has given a fictitious name or false address to the insured from whom such automobile is rented.' However, Milmoe did not violate this provision. The policy's coverage was not rendered inoperative by virtue of an invalid rental agreement.

The second argument made by the garnishee is that summary judgment is improper because an issue of fact exists as to whether Milmoe or McGinn was the driver of the car. Royal points to the exclusion in the policy, according to which an automobile being operated 'by any person other than the renter who signed the rental agreement' is not covered. Royal claims that no coverage exists because McGinn, who did not sign the rental agreement, was the operator.

The court below initially pointed out that '(i)t is not known whether McGinn or Milmoe was the operator.' However, it summarily dismissed that issue as being irrelevant to the question of Royal's liability, stating: 'Judgments having been entered by the plaintiff against both defendants, we need not be concerned with the identity of the operator of the vehicle in which the decedents, Milmoe and McGinn were driving.' In our Court, with appropriate references to the pleadings, Royal argues: 'Garnishee considers (the identity of the driver) to be a most material issue of fact * * *. If McGinn was not a person permitted by the owner to drive the car, the duties and/or obligations of the owner with respect to the car would be affected. Briefly stated: Unless McGinn was permitted under a valid rental agreement to drive the car, insurance coverage did not extend to him.' (Emphasis added)

The plaintiffs claim that Royal is barred from raising this issue of who was driving at the time of the accident because it was not raised as a defense below. The pleadings in the lower court proceeded under Pa.R.Civ.P. 3145 which provides: '(a) The procedure between the plaintiff and the garnishee shall, as far as practicable, be the same as though the interrogatories were a complaint and the answer of the garnishee were an answer in assumpsit. (b) The garnishee in his answer under 'new matter' may include * * * (2) any defense or counterclaim which he could assert against the defendant if sued by him but he may not assert any defense on behalf of the defendant against the plaintiff or otherwise attack the validity of the attachment.'

The garnishee in the instant case was Royal and, under Rule 3145, it could raise any defense it might have had if it were being sued directly by Milmoe or McGinn and could assert As new matter that it would not be liable on its insurance policy to Milmoe, the insured, and, therefore, would not be liable to the plaintiffs, the injured parties. In the factual posture of this litigaion, Royal could not Now claim a lack of liability on the basis that its insured, Milmoe, was not liable to the plaintiffs. An examination of the pleadings reveals that Royal averred as new matter facts which would negate its liability to Milmoe and which could, consequently, bar an action which must rely upon such liability. The question of who was driving the motor vehicle at the time of the accident was raised in the interrogatories, the answers, and the reply, and these serve as the pleadings in this case. In its new matter, appended to its answers of garnishee to interrogatories, Royal averred: 'Thereafter, Margaret Milmoe put the automobile to her personal use and While it was being operated by McGinn, who was not upon any business of Peace Corps, became involved in an accident.' (Emphasis added).

In their Reply of New Matter, the plaintiffs challenged this averment, as follows: 'Denied. Plaintiff after reasonable investigation, is unable to ascertain to what use the said Margaret Milmoe put the automobile. Plaintiff further avers that the operator of said automobile was Margaret Milmoe when it became involved in the accident.' (Emphasis added).

The issue having been properly raised, our next inquiry must be whether the factual question as to who was driving at the time of the accident is Material. Since the issue constitutes a general question of fact, If the issue was material to the disposition of the case, it was improper for the court below to grant the motion for summary judgment. See: Pa.R.Civ.P. 1035(b). In Mallesky v. Stevens, 427 Pa. 352, 356, 235 A.2d 154, 155 (1967), we said: 'It is well settled that a summary judgment upon the pleadings should not be entered unless the case is clear and free from...

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