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BRADFORD v. AMERICAN MUTUAL LIABILITY INSURANCE COMPANY (09/12/68)

decided: September 12, 1968.

BRADFORD, APPELLANT,
v.
AMERICAN MUTUAL LIABILITY INSURANCE COMPANY



Appeal from judgment of County Court of Philadelphia, March T., 1964, No. 10438-C, in case of Oscar Bradford v. American Mutual Liability Insurance Company.

COUNSEL

William A. Goichman, for appellant.

Charles F. G. Smith, with him Swartz, Campbell & Detweiler, for appellee.

Wright, P. J., Watkins, Montgomery, Jacobs, Hoffman, Spaulding, and Hannum, JJ. Opinion by Jacobs, J.

Author: Jacobs

[ 213 Pa. Super. Page 9]

The appellant, Oscar Bradford, was insured by the appellee, American Mutual Liability Insurance Company, under an automobile policy. His wife and two daughters were injured in an automobile collision with an insured third party on August 14, 1963. Medical expenses of $447 were incurred in treating those injuries. On August 26th appellant notified appellee of a claim under the medical expense provision of the policy and appellee sent proof of loss forms on September 28th. On January 15, 1964 appellant mailed medical bills and reports to the appellee and requested payment in the amount of $447. Eight days later, on January 23rd, appellant settled a suit previously brought against the other driver for an amount in excess of $447, and executed a complete release from all claims including the medical expenses. The settlement and release were without the knowledge or consent of the appellee insurance company.

The appellant brought the present suit against his insurer to recover either $149 in legal fees which he incurred in recovering his medical expenses from the tortfeasor, or, alternatively, the full $447 in medical expenses. Initially the case was presented to a panel of arbitrators who found for the appellant. The appeal was heard by the Honorable Gregory G. Lagakos and his decision in favor of the defendant was affirmed by the court en banc. This appeal followed. We affirm.

Reduced to its simplest terms, the appellant's argument is that appellee has failed to comply with the insurance contract, that appellant has complied with the contract, and therefore appellee should pay either what it contracted to pay (i.e., the medical expenses),

[ 213 Pa. Super. Page 10]

    or the appellant's cost of procuring alternative relief (i.e., counsel fees).

Our recent decisions in Demmery v. National Union Fire Ins. Co., 210 Pa. Superior Ct. 193, 232 A.2d 21 (1967); and Caldwell v. Keystone Ins. Co., 212 Pa. Superior Ct. 379, 243 A.2d 448 (1968), control the disposition of this appeal.

The plaintiff in Demmery sought a double recovery of medical expenses. After settling with and releasing the tortfeasor he sought to recover his medical expenses from his insurer. In that suit he attacked a subrogation clause which was virtually identical to that in the instant appeal.*fn1 After reviewing numerous cases from other jurisdictions, we sustained that subrogation clause as not violating public policy and, in so doing, recognized that an insured's noncompliance with the clause was a complete defense to the insurer's liability on the policy. The plaintiff's release of the tortfeasor had made it impossible for plaintiff to comply with the subrogation clause, thereby precluding reimbursement of his insurer.

The plaintiff in Caldwell v. Keystone, supra, sought to recover from his insurer the attorney's fee incurred in recovering from the tortfeasor. Having been unable to agree with his insurer on the amount of collision damages, the insured had sued and recovered from the tortfeasor. We noted that no common fund was created for the benefit of the insurer so as to equitably ...


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