Edward W. Madeira, Jr., Philadelphia, for appellant.
James Lewis Griffith, Philadelphia, for appellee, Medical Protective Co. of Fort Wayne, Indiana.
Joseph G. Manta, Philadelphia, for appellee, Firemen's Ins. Co. of Newark, N. J. of the Continental Ins. Group.
Jones, C. J., and Eagen, O'Brien, Roberts, Pomeroy, Nix, Manderino, and Packel, JJ. Packel, J., filed a concurring and dissenting opinion in which O'Brien, J., joins.
This appeal, from an Order of the Court of Common Pleas of Philadelphia County entered on September 24, 1974, had its genesis in our decision in Incollingo v. Ewing, 444 Pa. 263, 282 A.2d 206 (1971). In that case, we upheld a verdict and judgment in the amount of $215,000 entered against three joint-tortfeasors, Parke-Davis and Company (Parke-Davis), Domenico Cincinotta, and Samuel I. Levin. The verdict was entered on December 14, 1967; judgment was entered on November 24, 1969. Parke-Davis, through its insurer, Lloyds of London, paid the entire amount of the judgment on November 19, 1971. The judgment included not only the principal amount of $215,000, but also $50,833.30 in interest accrued from December 14, 1967, until the date of payment, and $2,378.84 in costs. Thereafter the judgment was marked to the use of Parke-Davis and satisfied as to it only. This use-judgment was then assigned to Karen Blanck, an employee of counsel for Parke-Davis and the appellant in this case.
Parke-Davis' insurance coverage with Lloyds of London exceeded $2,000,000. Cincinotta was insured by appellee Medical Protective Company of Fort Wayne, Indiana (Medical Protective) in the amount of $10,000. Levin was insured in the same amount by appellee Firemen's Insurance Company of Newark, New Jersey (Firemen's). Parke-Davis claimed that Firemen's and Medical Protective were each liable, under their respective policies with their insureds, for (1) the $10,000 policy coverage, (2) one-third of the interest which accrued on the $215,000 award between December 14, 1967, the date of the verdict, to November 19, 1971, the date when Parke-Davis paid all accrued interest on the principal award to the plaintiff, (3) one-third of the total costs paid by Parke-Davis on November 19, 1971, and (4) interest on the sum of items (1), (2) and (3) from November 19, 1971, when Parke-Davis satisfied the judgment due plaintiff as well as all interest and costs due. (The total due is subject to credit for any partial payments made.)
Appellant caused a writ of execution in attachment and summons to be issued against appellees, each as garnishee. In June of 1972, the issue was submitted to the Court of Common Pleas of Philadelphia County on stipulated facts and cross-motions for summary judgment. On September 24, 1974, the trial court entered summary judgment for appellant holding that each appellee was responsible for one-third of the costs, and that they were not responsible for any interest whatever since they had paid to the limits of their liability under their respective policies. In so deciding, the trial court relied on our decision in Hafer v. Schauer, 429 Pa. 289, 239 A.2d 785 (1968), characterizing Hafer as standing for the proposition that an insurer is not liable for any interest in excess of the policy limits of liability unless the insurer has contracted with its insured to pay such interest. The trial court found the language of both policies to be substantially the same as that of the policy in Hafer, and, without elaboration, simply concluded that the policies did not impose any obligation upon appellees to pay any amounts (excluding costs) in excess of $10,000.00.
The relevant provision in Firemen's policy reads:
"With respect to such insurance as is afforded by this policy, the company shall:
(a) defend any suit against the insured alleging . . . injury and seeking damages on account thereof . . .
(b)(2) pay all expenses incurred by the Company, all costs taxed against the insured in any such suit and all interest accruing after entry of judgment until the company has paid or tendered or deposited in the Court such part of such judgment as does not exceed the limit of the Company's liability thereon . . . and the amounts so incurred, except settlement of claims and suits, are payable by the Company in addition to the applicable limit of liability on this policy."
The relevant provision in Medical Protective's policy reads:
"B. Upon receipt of notice the Company shall immediately assume its responsibility for the defense of any such claim or suit and shall retain legal counsel, who shall defend in conjunction with the legal department of the Company. Such defense shall be maintained until final judgment in favor of the Insured shall have been obtained or until all remedies by appeal, writ of error or other legal proceedings shall have been exhausted at the Company's cost and without limit as to the amount expended.
E. The Company's liability for damages shall not exceed the minimum amount herein stated in any one claim or suit and subject to the same limit for each claim or suit the Company's total liability, during one policy year, shall not exceed the maximum amount herein stated; such amount being in addition to the cost of the unlimited defense provided under Paragraph B and the premium on any bond furnished under paragraph C."
Parke-Davis contends that the dissenting opinion of Mr. Justice Roberts in Hafer v. Schauer, 429 Pa. 289, 239 A.2d 785 (1968), joined by ...