No. 499 Jan. Term, 1978, Appeals from the orders dated Feb. 1, 1977, of the Court of Common Pleas of Northampton County, Pa, Civil Division--Law at No. 387 Jan. Term, 1974 (Appellant, August) and No. 356 Jan. Term, 1975 (Appellant, Belzner) and from the Orders dated April 13, 1978, of the Superior Court of Pa., at No. 1098 Oct. Term, 1977 (Appellant, August) and No. 1143 Oct. Term, 1977 (Appellant, Belzner).
Paul C. Hensel, Bethlehem, for Timothy E. August.
Robertson B. Taylor, Bethlehem, for David C. Belzner.
Thomas F. Traud, Jr., Allentown, for appellee.
O'Brien, C. J., and Roberts, Nix, Larsen, Flaherty and Kauffman, JJ. Roberts, J., filed a concurring opinion in which O'Brien, C. J., and Flaherty, J., joined. Flaherty, J., joins the majority opinion and Roberts, J., concurring opinion. Nix, J. concurred in the result.
This case involves an insurance policy provision which requires the insured to promptly notify the insurance company in the event of an accident or loss.*fn1 At one time such provisions were strictly enforced in our Commonwealth, and late notice would release the insurance company from its contractual duties, even where the late notice did not harm the insurance company in any way. See Meierdierck v. Page 553} Miller, 394 Pa. 484, 147 A.2d 406 (1959). However, we rejected the strict enforcement approach in Brakeman v. Potomac Insurance Co., 472 Pa. 66, 371 A.2d 193 (1977), holding that late notice would release the insurance company only where the late notice was prejudicial. Whether the new law should be applied retroactively to cases pending on appeal when this Court decided Brakeman is the issue in this case.
The accident in question occurred on November 22, 1973. John Stasak was the driver of a car which struck a telephone pole, injuring Timothy E. August and David C. Belzner (appellants) who were passengers in the car. John Stasak and his parents (appellees) did not inform their insurance company of the accident until seven months later on June 25, 1974. Appellant August had already sued the appellees; appellant Belzner sued soon thereafter. The insurance company investigated the claim but refused to defend or indemnify the appellees, asserting that the required prompt notice was not given. Appellees retained their own counsel to defend the suit of appellant August, but on May 28, 1975 August recovered a verdict of $12,150.26. Appellant Belzner obtained a default judgment on August 4, 1975, and a verdict was rendered in the amount of $4,120.00. These trials both occurred well after the insurance company had notice of the accident.
In order to satisfy their judgments, appellants instituted attachment proceedings against appellees' insurance company in 1975. At trial, the court expressly found that the insurance company was not prejudiced by the late notice because the company had access to all the witnesses, the police accident report, and appellee's personal defense counsel's files. Furthermore, adequate time to prepare for trial remained even after late notice. However, the court denied relief, holding that the insurance company's refusal was proper under the prior law. August v. Stasak, No. 387 January Term 1974, No. 356 January Term 1975 (Court of Common Pleas of Northampton County, filed February 1, 1977). In 1977, while an appeal to the Superior Court was
pending in this case, this Court decided Brakeman, supra, and changed the law. The Superior Court, however, refused to apply our holding in Brakeman retroactively to this case and denied relief. August v. Stasak, 253 Pa. Super. 311, 384 A.2d 1359 (1978). Judges Hoffman and Spaeth dissented and would have extended ...