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DELAWARE COUNTY CONSTRUCTION COMPANY v. SAFEGUARD INSURANCE COMPANY (03/23/67)

decided: March 23, 1967.

DELAWARE COUNTY CONSTRUCTION COMPANY
v.
SAFEGUARD INSURANCE COMPANY, APPELLANT



Appeal from judgment of Court of Common Pleas of Delaware County, June T., 1961, No. 1126, in case of Delaware County Construction Company v. Safeguard Insurance Company.

COUNSEL

Melvin G. Levy, with him McClenachan, Blumberg & Levy, for appellant.

James C. Brennan, with him Hinkson & Cantlin, for appellee.

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

Author: Hoffman

[ 209 Pa. Super. Page 503]

This action arises out of a policy of insurance issued by Safeguard Insurance Company (Safeguard) to Delaware Construction Company (Delaware) insuring the latter for, inter alia, bodily injury liability. The facts follow:

Wilson's Hauling (Wilson) leased a crane, together with its operator and oiler, to Delaware. Delaware, in turn, leased the crane to United Engineers and Construction, Inc. (United). On December 31, 1957, Joseph W. Kelly, an employee of United, was working on a building then under construction, when he sustained fatal injuries as a result of an accident arising out of the use of the crane.

Kelly's estate subsequently instituted suit in the United States Court for the Eastern District of Pennsylvania

[ 209 Pa. Super. Page 504]

    for damages arising from the wrongful death of Kelly. The suit was filed originally against Wilson alone, but, thereafter, both Delaware and United were brought in as third-party defendants. United then filed a cross-claim against Delaware based on an indemnity provision in Delaware's agreement with United. This provision stated that Delaware would "save the lessee [United] harmless and indemnify him from every expense, liability or payment by reason of any injury to any person or persons, including death, or by reason of any damage to property, suffered through any act or omission of the lessor [Delaware] or any one directly or indirectly employed by him in the prosecution of the work covered by this order."

After suit was instituted in the District Court, Delaware called upon Safeguard to represent Delaware's interests in the action, including the claim for indemnification by United. Safeguard notified Delaware that it would not represent Delaware as to United's cross-claim, since the policy specifically excluded coverage for any liability assumed by Delaware under contract. Safeguard did, however, undertake Delaware's defense in the District Court action in all other respects. At trial, Delaware retained private counsel to defend against United's cross-claim.

During the trial in the District Court a settlement was effected. Under the terms of the settlement, Safeguard contributed the sum of $3500, in consideration for which it obtained for Delaware a complete release of all claims by the Kelly estate. Delaware, in its own right, paid the sum of $5000 for which it received from United a complete release of all claims arising out of United's cross-claim for indemnification.

Subsequently, Delaware instituted this action against Safeguard to recover the sum it had paid in settlement of the United cross-claim together with costs and ...


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