No. 1233 Philadelphia, 1980, Appeal from the Order of the Court of Common Pleas of Philadelphia County, Civil Division, at No. 2033 January Term, 1977.
Daniel L. Thistle, Philadelphia, for appellant.
Judith B. Reap, Philadelphia, for participating party.
Spaeth, Brosky and Hoffman, JJ.
[ 291 Pa. Super. Page 460]
Appellant contends in the present attachment execution proceedings that the lower court erred in concluding that it lacked jurisdiction over appellee, a foreign insurance company authorized to do business in Pennsylvania. We agree and, accordingly, reverse the order of the court below and remand for further proceedings.
On January 14, 1977, appellant commenced an action in trespass against a local retail establishment and appellee's insured, Concepts "100", Inc. (hereinafter Concepts), a nowdefunct New York corporation then doing business in Pennsylvania.*fn1
[ 291 Pa. Super. Page 461]
Appellant alleged that he had been injured due to a defect in a hair dryer manufactured by Concepts and purchased by him in Philadelphia. Pursuant to its contractual obligation, appellee undertook Concepts' defense, instructing its local counsel to enter an appearance and answer appellant's complaint on Concepts' behalf. Because of Concepts' recalcitrance, however, appellee, relying upon a condition in its policy, withdrew its representation of Concepts and disclaimed coverage for appellant's cause of action. Appellant obtained a $700,000 judgment against Concepts on November 5, 1979. On December 12, 1979, appellant commenced execution proceedings by filing a writ of execution and interrogatories in attachment against appellee as garnishee pursuant to Pa.R.Civ.P. 3101-3149. Appellee thereafter filed preliminary objections to the interrogatories in which it asserted, inter alia, that the courts of Pennsylvania lacked jurisdiction over it. See Pa.R.Civ.P. 3142(a), (c) (a garnishee must raise a question of jurisdiction by filing preliminary objections before entering an appearance or answering interrogatories). Appellee asserted that our courts lacked jurisdiction because it is a Michigan insurance company having no property in Pennsylvania, and because it had issued the relevant policy in New York to a New York corporation. Appellant responded that appellee had breached its contractual duty to defend and/or indemnify Concepts and, therefore, was subject to garnishment in Pennsylvania. On April 18, 1980, the lower court sustained appellee's preliminary objection as to jurisdiction and ordered the writ of execution stricken.*fn2 Appellant subsequently petitioned for reconsideration on the ground that appellee was subject to jurisdiction as a foreign insurance company authorized to do business in Pennsylvania for the last twenty-three years.
[ 291 Pa. Super. Page 462]
On July 8, 1980, the lower court affirmed its earlier order, reasoning that although appellee was indeed subject to in personam jurisdiction, our courts lacked jurisdiction over it in the present garnishment proceedings because such proceedings are in rem in nature and appellee had no property within the territorial reach of Pennsylvania process.*fn3 This appeal followed.
It is well settled that garnishment, or attachment execution as it was formerly known, is a viable remedy for a judgment creditor to collect its judgment from the judgment debtor's insurer. In Helms v. Chandler, 423 Pa. 77, 80, 223 A.2d 30, 31 (1976), our Supreme Court stated:
In a motor vehicle trespass action resulting in a judgment against an insured defendant, execution against the defendant's insurer as garnishee has long been recognized under prior practice and under the Rules of Civil Procedure as a means of satisfying plaintiff's judgment. The defendant insurer is a garnishee within the meaning of Rule 3101(b) defining a garnishee. Service of the writ of execution under Rule 3111 constitutes the attachment. The interrogatories under Rule 3144 are "directed to the garnishee respecting property of the defendant in his possession". The form of interrogatories is set forth in Rule 3253. In the case of an insurer garnishee the standard ...