NO. 665 Philadelphia, 1981, Appeal from the Order of the Court of Common Pleas of Cumberland County, Civil, No. 1273 of 1975.
Joseph M. Hankins, Philadelphia, for appellants.
F. Lee Shipman, Harrisburg, for appellees.
Hester, McEwen and Shertz, JJ. Shertz, J., did not participate in the consideration or decision of this case.
[ 317 Pa. Super. Page 572]
This appeal has been taken by Clarence S. Riley, the defendant in a trespass action and an insured of an insolvent insurance company, and by The Pennsylvania Insurance Guaranty Association from an Order of the Common Pleas Court that entered judgment in favor of the plaintiffs and against the Association in the amount of $10,000.00,
[ 317 Pa. Super. Page 573]
pursuant to an interpretation by the court of certain provisions of The Pennsylvania Insurance Guaranty Association Act. We reverse.
Appellees initiated an action in trespass against Clarence S. Riley as a result of a collision between their vehicles. Appellees at all pertinent times maintained with United States Fidelity & Guarantee Insurance Company (USF&G) a policy of automobile insurance that included uninsured motorist coverage. Mr. Riley was at the time of the accident insured by the Summit Insurance Company of New York under a policy with a liability limit of $10,000.00. The Summit Insurance Company thereafter became insolvent and, as a result, The Pennsylvania Insurance Guaranty Association, pursuant to the provisions of The Pennsylvania Insurance Guaranty Association Act, represented the interests of Mr. Riley. Counsel for the parties to the action in trespass agreed to the entry of a verdict in the amount of $10,000.00 in favor of the plaintiffs and against the Pennsylvania Insurance Guaranty Association in the stead of Clarence S. Riley, pursuant to an understanding that the Association would undertake to secure appellate review of the following question:
If a plaintiff fails to make a claim against his own insurer for uninsured motorist benefits based on the insolvency of defendant's motor vehicle liability insurer, is not plaintiff barred from pursuing a claim against the individual defendant and The Pennsylvania Guaranty Association Act because of plaintiff's failure to exhaust his rights as required by § 503(a) of The Pennsylvania Insurance Guaranty Association Act, 40 P.S. § 1701.503(a)?
The Pennsylvania Insurance Guaranty Association Act*fn1 (the Act) created The Pennsylvania Insurance Guaranty Association (the Association) for the purpose, inter alia,*fn2 of enabling claimants or policyholders to avoid financial loss as a result of the insolvency of an insurer, and directed that the Association, upon the insolvency of an insurer, be
[ 317 Pa. Super. Page 574]
"deemed the insurer to the extent of its obligation on the covered claims and to such extent shall have all rights, duties and obligations of the insolvent insurer as if that insurer had not become insolvent."*fn3 The obligation of the ...