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FRATTO ET UX. v. NEW AMSTERDAM CASUALTY CO. (04/23/69)

decided: April 23, 1969.

FRATTO ET UX., APPELLANTS,
v.
NEW AMSTERDAM CASUALTY CO.



Appeal from judgment of Court of Common Pleas of Allegheny County, July T., 1965, No. 3887, in case of Dominick Fratto and Rosina Fratto, individually and trading and doing business as Silver Fox Inn, v. The New Amsterdam Casualty Co. et al.

COUNSEL

James E. McLaughlin, with him Michael R. Stabile, Jr., and McArdle & McLaughlin, for appellants.

Thomas Lewis Jones, with him Samuel P. Gerace, and White, Jones & Gregg, for appellees.

Bell, C. J., Jones, Cohen, Eagen, O'Brien, Roberts and Pomeroy, JJ. Opinion by Mr. Justice Eagen. Concurring Opinion by Mr. Justice Cohen. Dissenting Opinion by Mr. Justice Roberts. Mr. Justice O'Brien joins in this dissenting opinion.

Author: Eagen

[ 434 Pa. Page 138]

On January 2, 1962, appellants' building was destroyed by fire. The building and its contents were insured under policies issued by various insurance companies, nine of which are the present appellees. In April of 1963 appellants commenced two actions in the United States District Court against other insurance companies not here involved, and on June 21, 1963, they instituted a third federal action against the nine companies before this Court today. All three federal actions were consolidated for trial. On June 7, 1965, the federal district court handed down an opinion allowing recovery for appellants on their two April 1963 claims, but dismissing the suit against appellees for failure to meet the federal jurisdictional amount. Fratto v. Northern Ins. Co. of New York, 242 F. Supp. 262 (W.D. Pa. 1965), affirmed sub nom., 359 F. 2d 842 (3d Cir. 1966). It appears that the federal court raised the jurisdictional issue sua sponte.

Upon learning that the federal court was going to dismiss its action against appellees, appellants, on June 24, 1965, commenced a state action in the Common Pleas Court of Allegheny County. Appellees asserted in new matter that this state court suit was untimely, citing a provision common to all the policies here involved: "Suit. No suit or action on this policy for

[ 434 Pa. Page 139]

    the recovery of any claim shall be sustainable in any court of law or equity . . . unless commenced within twelve months next after inception of the loss." Since the loss occurred in 1962 and the present suit was not commenced until 1965, appellees moved for summary judgment under Pa. R. C. P. 1035. The motion was granted, hence this appeal.

It is the position of appellants that summary judgment should not have been granted since appellees are estopped from invoking the one year "statute of limitations" provision of the policies. Appellants contend that by expressly admitting the truth of appellants' allegation in their federal complaint that the suit satisfied federal jurisdictional requirements, appellees lulled appellants into believing that the claim would be finally settled in the federal forum. Therefore, by the time the federal court dismissed the suit, it was too late for appellants to commence a timely state action. The Frattos thus seek to place this controversy within the line of cases holding that "an insurer will not be permitted to take advantage of the failure of the insured to perform a condition precedent contained in the policy, where the insurer itself is the cause of the failure to perform the condition." Arlotte v. National Liberty Ins. Co., 312 Pa. 442, 445, 167 A. 295, 296 (1933); Fedas v. Insurance Co. of Pennsylvania, 300 Pa. 555, 151 A. 285 (1930). Cf. Deemer v. Weaver, 324 Pa. 85, 187 A. 215 (1936).

Appellees counter this argument with the proposition that suits brought in a court without jurisdiction are but a nullity and therefore such an action cannot preclude appellees' later use of the otherwise valid policy statute of limitations in the present case. Dalzell v. London and Lancashire Fire Ins. Co., 252 Pa. 265, 97 A. 452 (1916); Miller v. Fulton, 206 Pa. 595, 56 A. 74 (1903); Hocking v. Howard Ins. Co., 130 Pa. 170,

[ 434 Pa. Page 14018]

A. 614 (1889); Keystone Mut. Benefit Assoc. v. Norris, 115 Pa. 446, 8 A. 638 (1887); Roth v. Northern Assurance Co., 46 Ill. App. 2d 253, 196 N.E. 2d 389 (1964).

We conclude that the summary judgment against the appellants was proper, because the appellees had a perfect right, under legal and equitable principles, to raise ...


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