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REESE ET UX. v. NORTHERN INSURANCE COMPANY NEW YORK (12/16/65)

decided: December 16, 1965.

REESE ET UX., APPELLANTS,
v.
NORTHERN INSURANCE COMPANY OF NEW YORK



Appeal from judgment of Court of Common Pleas of Allegheny County, April T., 1963, No. 3122, in case of Burton Reese et ux. v. Northern Insurance Company of New York.

COUNSEL

Frank R. Sack, for appellants.

Richard C. Witt, with him White, Jones & Gregg, for appellee.

Ervin, P. J., Wright, Watkins, Montgomery, Jacobs, and Hoffman, JJ. (Flood, J., absent). Opinion by Ervin, P. J.

Author: Ervin

[ 207 Pa. Super. Page 21]

The plaintiffs, Burton Reese and Lissi Reese, his wife, owned a frame dwelling house at 585 Rosedale Street in Pittsburgh, Pennsylvania. On or before April 21, 1961, plaintiffs purchased a Homeowners insurance policy from the defendant, Northern Insurance Company of New York. This policy insured the plaintiffs against loss by certain named perils, including fire, and was effective for a period of three years from April 21, 1961 to April 21, 1964.

On or about January 2, 1963, while the said policy was in full force and effect, the plaintiffs' dwelling was destroyed by fire of accidental origin. After negotiations between the plaintiffs and defendant's adjuster, the plaintiffs agreed to take $14,600.00 in partial settlement of their claim. Of this amount $5,600.00 was accepted as payment for unscheduled personal property, for additional living expenses and for removal of debris. The balance of $9,000.00 represented actual cash value of the dwelling house as depreciated by the adjuster, and agreed to by the plaintiffs. However, plaintiffs in accepting the $9,000.00 reserved the right to recover under the replacement cost endorsement the difference between the $9,000.00 actual cash value and the replacement cost of the dwelling without deduction for depreciation -- a sum agreed by both parties to be $4,230.47. Defendant denied liability under the replacement cost clauses and this litigation followed.

As there were no facts in dispute, the parties stipulated the issues for trial without a jury.

The sole question involved is whether the replacement cost provisions of the policy, in effect at the time of the loss, can be utilized without actual replacement or rebuilding.

The pertinent parts of the policy are: "5. Conditions

[ 207 Pa. Super. Page 22]

"Replacement Cost:

"(2) If at the time of loss the limit of liability for the dwelling in Coverage A of this policy is eighty per cent (80%) or more of the full replacement cost of the dwelling insured, Coverages A and B*fn1 only of this policy are extended to include the full ...


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