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JOHN T. PFEIFFER v. GROCERS MUTUAL INSURANCE COMPANY (10/06/77)

decided: October 6, 1977.

JOHN T. PFEIFFER, III, RECEIVER OF GOETZ DEMOLITION, INC.
v.
GROCERS MUTUAL INSURANCE COMPANY, APPELLANT



No. 646 October Term, 1977, Appeal from the Order of the Court of Common Pleas, Civil Action, Law, of Schuylkill County, at No. S-543 May Term, 1975.

COUNSEL

Thomas K. Noonan, Mahanoy City, for appellant.

Anthony J. Urban, Mahanoy City, for appellee.

Watkins, President Judge, and Jacobs, Hoffman, Cercone, Price, Van der Voort and Spaeth, JJ.

Author: Hoffman

[ 251 Pa. Super. Page 3]

Appellant, Grocers Mutual Insurance Company, contends that the lower court erred in holding that a Manufacturers' and Contractors' Liability Insurance policy covered a demolition company's destruction of two buildings that it had no authority to destroy. Appellee responds that appellant is estopped from denying payment on this ground because it initially and mistakenly disclaimed payment on different grounds. We hold that appellant is not barred from arguing non-coverage and that the policy in fact did not cover the demolition company's destruction of the two buildings.

In May, 1972, the Pennsylvania Department of Transportation awarded Goetz Demolition, Inc. (hereinafter Goetz) a contract to clear a right of way for the relocation of Route 209 near Tamaqua, Schuylkill County, by demolishing and removing certain designated structures. On May 23, 1972, appellant issued a Manufacturers' and Contractors' Liability Insurance policy to Goetz. This policy listed the seven structures which Goetz had contracted to demolish and remove. Goetz negligently destroyed two structures owned by the Reading Anthracite Company (hereinafter Reading) which were not designated in either appellee's contract with the Pennsylvania Department of Transportation or the insurance policy.*fn1 Subsequently, Goetz went into receivership, and John T. Pfeiffer, III, Esquire, was appointed receiver. In connection with the proceedings to dissolve Goetz, Reading

[ 251 Pa. Super. Page 4]

    filed a claim for damages arising from the destruction of its two buildings. On November 25, 1974, a Schuylkill County Court of Common Pleas conducted a hearing on this claim. Appellant was present at the hearing, but refused to defend against Reading's claim because it believed that the insurance policy did not cover the destruction of the two buildings. In December, 1974, the court entered an order awarding Reading $12,500 and directing appellee to file an action to recoup these damages from appellant. In its award, the court specified that Goetz acted negligently in destroying the two buildings not located in the right of way and not listed for destruction in the demolition company's contract with the Pennsylvania Department of Transportation.

On April 7, 1975, appellee filed a complaint in assumpsit in the Court of Common Pleas of Schuylkill County; appellee sought payment under the insurance policy of the amount awarded to Reading. Appellee answered that the policy did not cover the destruction of the two buildings. On July 9, 1976, the lower court conducted a hearing, and on July 13, 1976, the court entered an order awarding appellee $12,500 plus 6% interest on that amount from November 25, 1974. This appeal followed the lower court's denial of appellant's exceptions.

We will first consider appellee's assertion that appellant is barred from arguing that the insurance policy does not cover the destruction of Reading's two buildings because appellant initially declined payment on different grounds. According to appellee, appellant at first refused to pay because of lack of timely notice, but later abandoned this contention. Appellant next questioned whether the policy was in effect on the date of the destruction of the two buildings.*fn2 When this issue was resolved to appellant's satisfaction, appellant adopted appellee's failure to co-operate as the basis for its

[ 251 Pa. Super. Page 5]

    refusal to pay. Finally, at the November 25, 1974 hearing on Reading's claim, appellant asserted that the insurance policy did not cover the destruction of the two buildings and, therefore, refused to defend. From the date of this hearing, appellant steadfastly maintained that the ...


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