Safeguard Mut. Ins. Co. v. Williams

• Decision Date: 03 October 1975
• Citation: 463 Pa. 567,345 A.2d 664
• Parties: SAFEGUARD MUTUAL INSURANCE COMPANY, Appellant, v. Ethel WILLIAMS et al.
• Court: Pennsylvania Supreme Court

345 A.2d 664

463 Pa. 567

SAFEGUARD MUTUAL INSURANCE COMPANY, Appellant, v. Ethel WILLIAMS et al.

Supreme Court of Pennsylvania.

October 3, 1975

Argued April 23, 1974. [Copyrighted Material Omitted]

M. Stuart Goldin, Malcolm H. Waldron, Jr., Malcolm W. Berkowitz, Oscar N. Gaskins, Philadelphia, for appellant.

Louis Kassen, Kassarich & Kassen, Philadelphia, for appellee.

David M. Narrow, Barton Isenberg, Asst. Attys. Gen., Israel Packel Atty. Gen., harrisburg, for Insurance Department as amicus curiae.

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

OPINION

NIX, Justice.

Appellees policyholders of appellant-insurance company, and Temple Insurance Agency, Inc., an agent of the appellant-company, on or about January 18, 1974, filed a complaint in equity and a petition for a preliminary injunction seeking to enjoin appellant, Safeguard Mutual Insurance Company, from the cancellation or the threatened cancellation of approximately 12,000 to 13,000 insurance policies of its current policyholders for non-payment of an assessment premium, until the equity action contesting the legality of the assessment could be brought to a final disposition. After proceedings in the Court of Common Pleas of Philadelphia County, the Chancellor on February 11, 1974, issued a decree granting the preliminary injunction from which this appeal has been taken. ^[1]

Accompanying the appeal to this Court, appellant filed a petition for supersedeas and after hearing, this Court entered an order modifying the order of the Chancellor in that it permitted Safeguard to receive and retain in a segregated fund any assessment payments Voluntarily made, pending the final resolution of this matter. ^[2] The matter is now ripe for disposition.

Appellant first challenges the issuance of the preliminary injunction claiming that it was denied substantive and procedural due process of law. A review of the record of the proceedings below clearly establishes this claim to be without merit. Under the Pennsylvania Rules of Civil Procedure, Rule 1531(a), it is provided:

'A court shall issue a preliminary or special injunction only after written notice and hearing unless it appears to the satisfaction of the court that immediate and irreparable injury will be sustained before notice can be given or a hearing held, . . .'

Here it is not contended that the action was taken before a hearing was held, but rather the challenge is directed to the sufficiency of that hearing. Mr. Justice EAGEN, speaking for this Court in Pubusky v. D.M.F., Inc., 428 Pa. 461, 239 A.2d 335 (1968), set forth the requirements of a hearing of this nature:

'While the testimony at a hearing for a preliminary injunction which seeks only to preserve the status of the parties until the issue is finally determined need not always be as extensive as that at a final hearing, the litigants, should not be deprived of the right of fully cross-examine all adverse witnesses, nor of the opportunity to present testimony which is relevant to the question of whether or not the injunction should issue.'

In our judgment, the proceeding below met these criteria.

In response to the complaint in equity, appellant filed preliminary objections asserting that the complaint had failed to set forth a cause of action, that the assessment was legal and proper, and that the appellees had participated in a proceeding before the Commonwealth Court where the identical issues were raised and therefore should have been bound by that prior proceeding. ^[3] Appellant introduced an affidavit in opposition to plaintiff's request for a preliminary injunction and also offered a number of exhibits in support of its contention. Upon appellant's motion, the notes of testimony of the proceeding before Judge Blatt were offered in the action before the Court of Common Pleas in Philadelphia County and considered by the Chancellor in reaching his decision. Additionally extensive argument was engaged in by counsel for appellant which consumed some sixty-three pages of this record. The record reveals that appellant made no request to offer any additional testimony prior to the Chancellor's ruling although the opportunity was clearly available. It is therefore apparent that appellant's present assertion that he was denied the opportunity to present evidence on his behalf in violation of his right to due process is completely without foundation.

Appellant seeks to bolster his claim of denial of due process by characterizing the termination of the proceedings as being abrupt and suggesting that it (appellant) was improperly prevented from concluding its argument. As already indicated, both sides were permitted wide latitude and in our judgment provided ample opportunity to fully develop their respective positions. The record demonstrates that the Chancellor exercised the highest degree of judicial restraint and determined to conclude the proceedings only after it became apparent that the arguments were becoming repetitive and that counsel was beginning to become emotionally involved. ^[4] We are therefore satisfied that the court properly exercised its discretion and in no way infringed upon appellant's right to a full and complete hearing.

Appellant next contends that the intervention by the policyholders in the litigation commenced by the Commonwealth Department of Insurance before Judge Blatt in the Commonwealth Court should have precluded the policyholders' institution of the present action. It is our judgment that neither the doctrine of res judicata nor the doctrine of collateral estoppel prevents the policyholders from institution of the present action.

It is well settled that for the doctrine of res judicata to prevail there must be a concurrence of four conditions: 1) identity of issues, 2) identity of causes of action, 3) identity of persons and parties to the action, and 4) identity of the quality or capacity of the parties suing or sued. Bearoff v. Bearoff Brothers, Inc., 458 Pa. 494, 327 A.2d 72 (1974); Stevenson v. Silverman, 417 Pa. 187, 190, 208 A.2d 786, 787 (1965), cert. denied, 382 U.S. 833, 86 S.Ct. 76, 15 L.Ed.2d 76 (1965). With respect to collateral estoppel we have recently stated that a plea of collateral estoppel is valid if, 1) the issue decided in the prior adjudication was identical with the one presented in the later action, 2) there was a final judgment on the merits, 3) the party against whom the plea is asserted was a party or in privity with a party to the prior adjudication, and 4) the party against whom it is asserted has had a full and fair opportunity to litigate the issue in question in a prior action. In Re Estate of Ellis, [463 Pa. 575] --- pa. ---, 333 a.2d 728, 731 (1975). thus, For appellant to invoke either res judicata or collateral estoppel the issues presented before Judge Blatt in the Commonwealth Court must be the same as those raised in the instant action. Here the element of the identity of issues is absent and therefore neither the doctrines of res judicata nor collateral estoppel will serve to bar the proceeding.

The issue presented in the action commenced by the Commonwealth Insurance Department before Judge Blatt was the right of the Commonwealth to preliminary injunctive relief due to its immediate and irreparable harm occasioned by alleged breaches by Safeguard Mutual of the insurance statutes enforced by the Insurance Department. Specifically, the Insurance Department sought to enjoin actions by Safeguard Mutual which allegedly violated Section 4 of the Act of June 5, 1968 (P.L. 140) No. 78, 40 P.S. § 1008.4. In seeking preliminary injunctive relief the Insurance Department asserted that it had no adequate remedy at law because the only remedy at law ran exclusively to the individual policyholders who might or might not bring an action to protect their rights. In seeking to establish irreparable harm the Insurance Department pointed to the alleged violation of the insurance statutes and the resultant administrative burden on the Insurance Department should there be a great number of policyholder cancellation appeals under the insurance statutes.

In contrast, the issue in the instant action for preliminary injunctive relief by the policyholders is the alleged violation of their contractual rights by Safeguard Mutual and the irreparable harm they will suffer should their insurance policies be improperly cancelled. The record establishes that a vast majority of the policyholders are persons of limited means, who would experience great difficulty if this added financial burden was imposed. The ramifications of improper cancellations by Safeguard Mutual would substantially impair the policyholders' ability to protect or defend their rights in actions that might arise during the pendency of this litigation.

In the earlier litigation the court was concerned with the alleged wrong to the Insurance Department when one of the companies under its aegis acts in violation of statutory law and the irreparable harm that could occur to that Department and the Commonwealth. In the instant litigation the court was concerned with alleged violations of individual policyholders' contractual rights and the irreparable harm that could occur to them should their insurance policies be improperly cancelled. It is clear, therefore, that the identity of issues which is required for the application of the doctrine of either res judicata or collateral estoppel is not present here.

Further, it is apparent from Judge Blatt's order permitting intervention by the policyholders in the Commonwealth's action that the policyholders did not have a full and fair opportunity to litigate the issues that primarily concerned them in the earlier action. Her order provided:

'The Court...