OPINION AND ORDER
MARSH, District Judge.
This diversity action was brought on September 24, 1964, by a Pennsylvania citizen, the Administrator of the Estate of Linda E. Kraus, deceased, against Allstate Insurance Company, an Illinois corporation with its principal place of business in a state other than Pennsylvania.
It was alleged that plaintiff is the assignee of Eugene V. Martin, Administrator of the Estate of Arthur H. Depew, of all claims or causes of action which Arthur H. Depew, or the Estate of Arthur H. Depew, deceased, has against Allstate; and that the "cause of action which has been assigned to plaintiff against the defendant" is based upon the following facts:
On July 25, 1957, at or about 9:30 p.m., on East Ohio Street, Pittsburgh, Allegheny County, Pennsylvania, John W. Kraus, Jr., Joan Kraus, John W. Kraus, Emily P. Kraus, Frank Panza, and Martha Panza were injured, and Linda E. Kraus was killed as a result of the use of the motor vehicle owned and operated by Arthur H. Depew. At that time, Depew was insured by an automobile liability policy issued by Allstate on November 9, 1956. Allstate was notified of the accident and the injuries and death "but refused to defend or represent Authur [sic] H. Depew." Suit was instituted at No. 622 October Term, 1959
in the Court of Common Pleas of Allegheny County, Pennsylvania, and judgments were entered in favor of the plaintiff Administrator and the injured parties against the Administrator of the Estate of Depew in the total amount of $20,000.
It was finally alleged (1) that Allstate "wrongfully refused to represent or defend Authur [sic] H. Depew in this law suit"; (2) that the lawsuit "which resulted in a verdict of $20,000.00 against Eugene V. Martin, Administrator of the Estate of Authur [sic] H. Depew, could have been settled within the policy limits of the said insurance policy"; (3) Allstate "is guilty of bad faith and breached its contract with plaintiff's assignee and as a result of said breach of contract and bad faith, plaintiff's assignee has a Judgment in excess of the limits of its policy to-wit the sum of $20,000.00, together with interest from February 5, 1964."
Because of the liberality accorded pleadings under the federal rules, we think plaintiff has sufficiently alleged that Allstate breached its three obligations under the policy of insurance, i.e., (1) its agreement to indemnify Depew's Estate against liability for the injuries and death involved; (2) its agreement to defend the insured against any suits arising under the policy, even if such suit is groundless, false or fraudulent;
and (3) its obligation as a fiduciary to act in good faith and with due care in representing the interests of the insured. If the insurer is derelict in this duty, it may be liable regardless of the limits of the policy for the entire amounts of the judgments secured against the insured.
See: Gedeon v. State Farm Mutual Automobile Ins. Co., 410 Pa. 55, 188 A.2d 320 (1963).
In answer to the operative facts, Allstate admitted only that it was Depew's insurer at the time of the occurrence wherein certain persons were injured, but averred that the harm "was the result [of] intentional and criminal conduct of Arthur H. DePew", and that the "protection provided by the policy of insurance did not include harm resulting from the insured's intentional conduct."
Pursuant to pretrial procedure the parties entered into a Stipulation of Facts (see Appendix). Briefly, the stipulated facts establish that on July 25, 1957, Allstate had in force and effect an automobile liability insurance policy covering Arthur H. Depew, now deceased; that Depew arranged a meeting with his estranged wife on that day at 9:30 p.m., in his automobile on East Ohio Street, a public thoroughfare, and then and there "intentionally detonated" an unknown quantity of dynamite which he had stolen from his employer Dravo Corporation
and had placed in his automobile, "thereby causing an explosion in the automobile completely destroying it, and killing his wife and himself." The means by which Depew detonated the dynamite is unknown. A pedestrian, Linda E. Kraus, the plaintiff's decedent, was also killed and several other pedestrians, who were plaintiffs in the state court action, were injured.
It was also stipulated that in the state court action, the law firm of Van Der Voort, Royston, Robb & Leonard, counsel for Allstate, entered its appearance on behalf of Eugene V. Martin, Administrator of the Estate of Arthur H. Depew. Subsequently, the state court granted this law firm leave to withdraw its appearance for the Estate:
"[Without] prejudice of any right claimed by interested parties to assert that Arthur H. Depew or his legal heirs or representatives or any persons claiming through him was entitled to coverage under a policy of automobile liability insurance issued to Arthur H. Depew by Allstate Insurance Company. Subsequently, Allstate Insurance Company did not participate or in any way defend Eugene V. Martin, administrator of the Estate of Arthur H. Depew."