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HARGROVE v. CNA INSURANCE GROUP (06/21/74)

decided: June 21, 1974.

HARGROVE
v.
CNA INSURANCE GROUP, APPELLANT



Appeal from judgment of Court of Common Pleas of Washington County, Sept. T., 1971, No. 509, in case of Scherwin Diane Hargrove v. CNA Insurance Group.

COUNSEL

William D. Phillips, for appellant.

Frank A. Conte, for appellee.

Watkins, P. J., Jacobs, Hoffman, Cercone, Price, Van der Voort, and Spaeth, JJ. Opinion by Cercone, J.

Author: Cercone

[ 228 Pa. Super. Page 337]

This is an appeal of CNA Insurance Group (CNA) from the lower court's judgment in favor of plaintiff,

[ 228 Pa. Super. Page 338]

Scherwin Diane Hargrove, as a third party beneficiary, under a CNA automobile liability policy.

CNA issued a policy to Aero Trucking Company covering the owner and driver of a truck which Aero leased [from the owner].

Plaintiff was injured in an accident involving the truck while it was being driven by the insured driver. CNA knew of the accident the day it happened, made investigations and paid, on behalf of its insureds, claims made by other persons involved in the accident. CNA also interviewed plaintiff and negotiated with her on her claim for injuries. At no time, however, did CNA know of plaintiff's lawsuit in trespass against its insureds, the owner and driver of the truck, until it was notified by plaintiff's attorney that a default judgment had been taken against these insureds. Plaintiff sought recovery of its judgment against CNA in an assumpsit action as a third party beneficiary under the policy. CNA denied liability on the grounds that its insureds had breached the condition upon which CNA's liability rested: a requirement that the insureds immediately forward suit papers in the event of a lawsuit. The only witness at the trial of the assumpsit action was a CNA supervisor who stated that CNA did not receive the suit papers, and did not have notice of the lawsuit until after the default judgment was obtained against CNA's insureds.

In Flagg v. Puleio, 189 Pa. Superior Ct. 329 (1959), the insurance company knew of the accident the day after it happened, investigated it and attempted settlement with plaintiff; it did not receive information of the lawsuit until a default judgment had been taken against its insured; no suit papers were forwarded to the insurer by its insured. In holding that the insurer was not liable therein we said: "In the present case the insurer did not have an opportunity to appear and defend the action on liability, was not given an opportunity

[ 228 Pa. Super. Page 339]

    to cross-examine plaintiffs' witnesses on damages and was not given an opportunity to present its own evidence relative to liability and damages." In Flagg, it was clearly established that no suit papers were forwarded. In the instant appeal, however, the dispositive question is whether or not the suit papers were forwarded. One of the pillars upon which our legal system rests is the requirement that notice be given to those involved in litigation so that they may have their day in court. If in the instant case the suit papers were not forwarded, the insurer was deprived of that right of notice and of the right to defend, and the lower court's ...


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