No. 738 October Term, 1977, Appeal from the Order of the Court of Common Pleas of Philadelphia County, Trial Division, Law, May Term, 1976, No. 276.
Howard D. Scher, Philadelphia, with him Goodis, Greenfield, Henry & Edelstein, Philadelphia, for appellants.
James J. McCabe, Jr., Philadelphia, with him Carl N. Martin, II, and Duane, Morris & Heckscher, Philadelphia, for appellee.
Watkins, President Judge, and Jacobs, Hoffman, Cercone, Price, Van der Voort and Spaeth, JJ. Watkins, former President Judge, and Hoffman, J., did not participate in the consideration or decision of this case.
[ 256 Pa. Super. Page 137]
This is an appeal from an order of the Court of Common Pleas of Philadelphia County, dismissing appellants' assumpsit complaint for failure to state a cause of action.*fn1
According to the complaint, appellants, a law firm, were engaged by Gateway Insurance Company to defend claims against persons insured by Gateway. They furnished legal services valued at $54,760.00 until August 21, 1974. On that date Gateway was ordered liquidated as it had become insolvent. Appellants have never been paid for the legal services they rendered prior to liquidation and now seek to recover payment from defendant, Pennsylvania Insurance Guaranty Association (P.I.G.A.).
P.I.G.A., which is now responsible for paying claims under policies issued by Gateway, was created by the Act of November 25, 1970, P.L. 716, No. 232, 40 P.S. 1701.101 et seq.
[ 256 Pa. Super. Page 138]
Every insurer writing property and casualty policies in Pennsylvania is required to participate and to pay a periodic assessment. The purpose of the Act is set forth in Section 1701.102 which reads in pertinent part:
"The purposes of this Act are:
(1) To provide a means for the payment of covered claims under certain property and casualty insurance policies, to avoid excessive delay of payment of such claims, and to avoid financial loss to claimants or policy holders as a result of the insolvency of an insurer . . ."
Section 1701.201 of the Act makes clear that the only disbursements the P.I.G.A. may make, except for expenses necessarily involved in carrying out its functions, are those that satisfy "covered ...