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CONTINENTAL CAS. CO. v. NATIONAL STEEL CORP.

February 24, 1982

CONTINENTAL CASUALTY COMPANY, Plaintiff,
v.
NATIONAL STEEL CORPORATION, Defendant



The opinion of the court was delivered by: SIMMONS

SUPPLEMENTAL OPINION

I.

 Plaintiff, Continental Casualty Company (hereinafter "CNA"), instituted this action for damages against Defendant, National Steel Corporation (hereinafter "National"), to recover monies allegedly owed by National for insurance premiums from 1974-1978, on a number of policies of insurance. Count I of the Complaint was based on the agreement of insurance, and alternate theories of relief were also advanced: Count II was based on unjust enrichment, Count III on negligent misrepresentation, and Count IV on fraudulent misrepresentation.

 The matter came on for jury trial July 13, 1981, and on July 27, 1981, Defendant National moved for a directed verdict at the close of Plaintiff CNA's case in chief. This motion was renewed by National on August 5, 1981, after National presented its own case and CNA presented rebuttal testimony. CNA at this time made a cross motion for a directed verdict in its favor. After oral argument, the Court granted the Defendant's motion for a directed verdict as to all counts of the Complaint, stating its reasons for doing so on the record. See Transcript, August 5-6, 1981, at 273-284. The Court then directed the execution of a jury verdict in accordance with its ruling, and judgment was subsequently entered for Defendant National. CNA filed a motion for new trial on August 17, 1981. After submission of briefs, and following the receipt of the final transcripts, the Court heard argument on the motion on January 27, 1982, and thereafter entered an Order affirming its previous ruling, based on the reasons previously set forth in its bench opinion. This Supplemental Opinion clarifies and explains the Court's January 27, 1982 Order, affirming the directed verdict granted in Defendant National's favor and denying Plaintiff CNA's Motion for a New Trial.

 II.

 Plaintiff's Motion for a New Trial is based on several grounds. Plaintiff contends that the verdict is contrary to law and contrary to the weight of evidence, and that several errors were made during the course of the trial. It is alleged that the jury should have been given an opportunity to consider the evidence; that Plaintiff's Motion for a Directed Verdict should have been granted; and that erroneous legal standards were used on the cross-motions for the directed verdict. In support of these contentions, CNA claims that the Court improperly considered the credibility of Plaintiff's witnesses; that the Court erroneously considered only Plaintiff's evidence; that the admission of certain evidence was not precluded by the parol evidence rule; and that the Court prejudicially prejudged the presentation of CNA's case and unnecessarily assumed the role of an advocate.

 A motion for a new trial under Rule 59, Fed.R.Civ.P. is addressed to the discretion of the trial court. Thomas v. E. J. Korvette, Inc., 476 F.2d 471 (3d Cir. 1973); Kerns v. Consolidated Rail Corporation, 90 F.R.D. 134 (E.D.Pa.1981). It is with this principle in mind that we review the contentions of Plaintiff CNA.

 III.

 CNA's claim is based upon the existence of an alleged "guaranteed loss ratio plan." According to CNA, the parties agreed that the plan would be put into effect in 1975. However, the "guaranteed loss ratio plan" was not reduced to writing and was not included in the written agreements of insurance at any time. CNA sought to introduce evidence of this alleged oral agreement, but the Court refused to allow this evidence, holding that the admission of such evidence was barred by the Parol Evidence Rule. The operation and application of the Parol Evidence Rule is thus the dispositive issue in this case.

 The parol evidence rule precludes the admission of evidence of an oral agreement where a contract is integrated. See National Cash Register Company v. Modern Transfer Company, Inc., 224 Pa.Super. 138, 302 A.2d 486 (1973). "Where parties, without any fraud or mistake, have deliberately put their engagements in writing, the law declares the writing to be not only the best, but the only, evidence of their agreement...." Gianni v. Russel and Company, 281 Pa. 320, 323, 126 A. 791 (1924) (citing cases).

 If the written agreement and alleged oral agreement "relate to the same subject-matter and are so interrelated that both would be executed at the same time, and in the same contract, the scope of the subsidiary agreement must be taken to be covered by the writing," Gianni, supra at 324, 126 A. 791, a question which is to be determined by the court. In the instant case, Item 12, of the policies reads as follows:

 
12. Declarations
 
By acceptance of this policy the named insured agrees that the statements in the declarations are his agreement and representations, that this policy is issued in reliance upon the truth of such representations and that this policy embodies all agreements existing between himself and the company or any of its agents relating to this insurance. (underlining supplied.)

 Plaintiff's Exhibit 7A, Defendant's Exhibit UU.

 Item 8, of the policy refers to changes in the policy ...


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