Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

EASTERN ENGINEERING & ELEVATOR CO. v. AMERICAN -INSURANCE COMPANY (01/28/83)

filed: January 28, 1983.

EASTERN ENGINEERING & ELEVATOR CO., INC., APPELLANT,
v.
AMERICAN RE-INSURANCE COMPANY



NO. 1044 Philadelphia, 1981, Appeal from the Order of the Court of Common Pleas of Philadelphia County, Civil, No. 4281, August Term, 1976.

COUNSEL

Christina Barbieri, Philadelphia, for appellant.

Morris R. Brooke, Philadelphia, for appellee.

McEwen, Johnson and Watkins, JJ.

Author: Mcewen

[ 309 Pa. Super. Page 580]

We here consider an appeal from an order which granted summary judgment in favor of the defendant-appellee American Re-Insurance Company and against the plaintiff-appellant Eastern Engineering & Elevator Co., Inc.*fn1 We affirm.

Appellant purchased in 1964 an insurance policy from the LaSalle Casualty Company (LaSalle) which provided, inter alia, that LaSalle would defend claims made against appellant under the policy and pay the legal costs and expenses incurred in connection with the defense of such claims. LaSalle then insured itself by means of a re-insurance contract with appellee which provided, inter alia, that appellee would reimburse LaSalle to the extent of fifty percent of the amount LaSalle paid out during the period covered, including costs of defense.

On February 20, 1964, as a result of an accident on a construction site, four personal injury suits were filed against appellant. Prior to the time these suits came to trial, LaSalle became insolvent and was placed in receivership by the Insurance Department of the State of Illinois. Since neither LaSalle nor the liquidator were in a position to defend the action, appellant itself undertook the defense and obtained a dismissal of the suits. Appellant then brought this suit against appellee to recover counsel fees in the amount of $7,505.00.

Reinsurance refers to an "undertaking whereby one insurer agrees to protect another insurer, known as the reinsured, either wholly or partially from a risk which it has undertaken, both policies being in effect at the same time, and the original insured having no interest in the reinsurance." 13A Appleman, Insurance Law & Practice § 7681, at 484-85 (1976). When an insurer has the subject of insurance reinsured to him by another, there is "no privity

[ 309 Pa. Super. Page 581]

    between the original insured and the reinsurer; the latter is in no respect liable to the former as a surety or otherwise; the contract of insurance and of reinsurance being totally distinct and disconnected." Appeal of Goodrich, 109 Pa. 523, 529, 2 A. 209, 211 (1885).*fn2 The insolvency of the original insurer does not change the nature of the reinsurer's obligation so as to permit the insurer to pursue it directly." 19 Couch on Insurance, § 80:66 at 959 (R.A. Anderson ed., 2d ed. (1959)). "The insured may, however, bring a direct action against the reinsurer where a proper third-party beneficiary contract to that effect may be found or where the reinsurer is a successor which has assumed the original insurer's liabilities." 19 Couch on Insurance, supra, § 80:67 at 959.

In the instant case, the appellant does not argue that a third-party beneficiary contract existed or that the appellee is a successor which has assumed the liabilities of LaSalle. Rather, appellant argues that section 117 of the Pennsylvania Insurance Code (40 P.S. § 117) authorizes a direct action by ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.