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JAMES T. RAAB AND CONSTANCE RAAB v. KEYSTONE INSURANCE COMPANY AND ED O'KEEFE (10/19/79)

filed: October 19, 1979.

JAMES T. RAAB AND CONSTANCE RAAB, HIS WIFE, APPELLANTS,
v.
KEYSTONE INSURANCE COMPANY AND ED O'KEEFE, INDIVIDUALLY AND AS EMPLOYEE AND CLAIMS SUPERVISOR FOR KEYSTONE INSURANCE COMPANY



No. 2330 October Term, 1977, Appeal from the Order of the Court of Common Pleas of Philadelphia County, No. 1391, October Term, 1977.

COUNSEL

Anthony B. Quinn, Philadelphia, for appellants.

Hugh J. Hutchison, Philadelphia, for appellees.

Price, Spaeth and Lipez, JJ. Price, J., files a concurring statement. Spaeth, J., files a dissenting opinion.

Author: Lipez

[ 271 Pa. Super. Page 187]

Appellee Keystone Insurance Company (Keystone) issued a no-fault automobile insurance policy to appellants. Appellant James Raab was subsequently injured in an automobile accident. He filed a claim under the policy, and Keystone began paying benefits pursuant thereto. A few months later, Keystone suspended payment. Appellants brought this action in trespass on the theories of 1) Keystone's negligent failure to pay benefits according to the insurance contract; and 2) Appellee O'Keefe's alleged malicious interference with the contractual relationship between appellants and Keystone, O'Keefe's employer. The court below sustained appellee's demurrer and dismissed the complaint.

The issues raised on this appeal have been properly resolved in Judge Gelfand's Opinion for the court below, and we adopt that Opinion in relevant part:

The Complaint in trespass alleges that Defendants by failing to properly administer the business in which they were involved thereby acted in a negligent fashion in handling Plaintiff's no fault claim as a result of which Plaintiff husband sustained physical and emotional injuries. Generally, when the breach of a contractual relationship is expressed in terms of tortious conduct, the cause of action is properly brought in assumpsit and not in trespass. Damian v. Hernon, 102 Pa. Super. 539, 157 A. 520 (1931). However, there are circumstances out of which a breach of contract may give rise to an actionable tort. Closed Circuit Corp. of America v. Jerrold Electronics Corp., 426 F.Supp. 361 (E.D.Pa., 1977). The test used to determine if there exists a cause of action in tort growing out of a breach of contract is whether there was an improper performance of a contractual obligation (misfeasance)

[ 271 Pa. Super. Page 188]

    rather than the mere failure to perform (nonfeasance). Behrend v. Bell Telephone Company, 53 D & C 2d 421 (1971), citing Siegel v. Struble Bros., 150 Pa. Super. 343, 28 A.2d 352 (1942).

Plaintiffs allege that Defendant's negligence is grounded in their "failure" to take certain actions in the handling of Plaintiff's claim. Our examination of this alleged conduct indicates that it is in the nature of "nonfeasance" inasmuch as it is the "omitting to do, or not doing, something which ought to be done." Nelson v. Duquesne L. Co., 338 Pa. 37 at 44, 12 A.2d 299 at 303 (1940). Accordingly, we find no cause of action in trespass for negligent breach of contract exists under the allegations made herein.

In addition, Plaintiffs seek compensation for physical injuries which resulted from emotional distress caused by Defendants' alleged negligence and request that punitive damages be assessed against them. Inasmuch as we have determined that Plaintiffs failed to set forth a cause of action in trespass for negligent breach of contract, these claims for damages must fall.

Further, Plaintiffs seek relief for conduct of the individual defendant, Ed O'Keefe, which they claim constitutes malicious interference with the contractual relationship ...


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