clauses. Although this result supports Home's position, it was reached without discussion and thus provides little guidance.
Liberty Mutual cites W.T. Grant Co. Inc. v. U.S.F. & G. Ins. Co., 279 Pa.Super. 591, 421 A.2d 357 (1980). In that case injury plaintiffs recovered a settlement from the defendant retailer of a defective swimming pool. The retailer had coverage under a liability policy and, through a vendor's endorsement, under the manufacturer's policy. The cost of the settlement and the cost of defense were recoverable from the manufacturer's insurer. Although this result supports Liberty Mutual's position, it was reached without discussion and, like the prior case, provides little guidance.
Home cites Mattocks v. Daylin, C.A. No. 76-147 Erie (W.D. Pa. May 29, 1980). In that case injury plaintiffs had filed suit against the defendant manufacturer of flammable pajamas and others. The pajama manufacturer had coverage under a liability policy and, through a vendor's endorsement, under a policy issued to the manufacturer of the flammable fabric. It had previously been determined that the insurer of the fabric manufacturer was liable for the defense costs of the pajama manufacturer. In the matter before the court, the insurer's contention that its policy should be prorated with the pajama manufacturer's own policy was rejected as not timely. The court stated: "It is not necessary for our present purposes to recite the language of [this insurer's] other insurance clause. It is a standard provision, there is no doubt about its meaning or the effect it would have had if it were raised timely in the prior proceeding." While this statement tells something about the expectation of courts with regard to coverage in these circumstances, just as the demand for a proportionate recovery in Great Atlantic and Pacific Tea Co. and White Cross Stores, Inc. cases tells something about the expectation of litigants, the absence of discussion on this point does not aid the present inquiry.
Liberty Mutual cites United National Ins. Co. v. Philadelphia Gas Works, 221 Pa.Super. 161, 289 A.2d 179 (1972) as an application of the rule of priority of specific insurance in the context of a third party liability action. In that case the gas company's insurer sought to recover from the gas company sums paid to claimants injured through the gas company's negligent operation of a rented vehicle. The insurer relied on a clause providing that its coverage was excess over other insurance and contended the gas company had other insurance by reason of a certificate of self-insurance. The court held the certificate of self-insurance was not insurance under the other insurance clause, and if it were, it did not cover rented vehicles. The loss which occurred was from a rented vehicle, the certificate of insurance did not cover losses from rented vehicles, and thus there was no other insurance covering the loss. The court's characterization of the certificate of insurance as a blanket policy was, at best, gratuitous because the certificate did not cover the loss which occurred. This was not a case of specific and general coverage of a loss.
This Court's research has disclosed one case under which the results of all, but one,
of the cases discussed above can be harmonized: Miller v. Home Ins. Co., 108 Pa.Super. 278, 164 A. 819 (1933). In Miller the plaintiff had two policies covering his home and barn: the first insured against loss by tornado, the second against loss by fire and tornado. Each policy contained a clause providing for proration with other insurance. Plaintiff's home and barn were damaged by a tornado.
The issue framed by the Miller court was "whether there was such double insurance on the property as limits the liability of the defendant [insurer which covered loss by tornado] to a pro rata share of the loss sustained." Double insurance was defined as two or more policies on the same interest, the same subject and against the same risk. The interest and subject were identical. The court next asked "Is the same risk assumed by the insurers in the two policies?" The court answered that both policies insured against the same risk, loss by tornado. Thus, the court concluded there was double insurance and each insurer was liable for a pro rata share of the loss.
In reaching this conclusion the Miller court analyzed Sloat v. Royal Ins. Co., 49 Pa. 14 (1865); Clarke v. Western Assurance Co., 146 Pa. 561, 23 A. 248 (1892); and Meigs v. Ins. of North America, 205 Pa. 378, 54 A. 1053 (1903). In each of these cases one policy covered specific property and a second policy covered the specific property plus other property; in each case it was held that there was not identity of subject matter and hence no double insurance. The Miller court held it was error to analogize from the lack of identity of subject matter in these cases to conclude there was no identity of risk where one policy covered loss by tornado and the second loss by fire and tornado.
In the case at bar Liberty Mutual urges this Court to make the jump in reasoning Miller proscribes. Liberty Mutual urges this Court to draw upon Sloat v. Royal Ins. Co. and its progeny and conclude that there is no identity of risk where the Home policy covered loss from defective fabric and the Liberty Mutual policy covered losses generally. As discussed above Liberty Mutual cites no specific authority for this position, the cases cited by Home indicate that courts and litigants have a contrary expectation when dealing in this area, and Miller expressly rejects the argument.
Therefore the Court finds the Home and Liberty Mutual policies cover the same interest, the same subject matter and the same risk. Thus there is double or other insurance and the other insurance clauses will be given effect.
Contribution by equal shares or by limits
Having determined that the other insurance clauses will be given effect, it is necessary to determine whether contribution is by equal shares or by limits. The Home policy and the two Liberty Mutual policies each contain identical other insurance clauses.
6. Other Insurance. The insurance afforded by this policy is primary insurance, except when stated to apply in excess of or contingent upon the absence of other insurance. When this insurance is primary and the insured has other insurance which is stated to be applicable to the loss on an excess or contingent basis, the amount of the company's liability under this policy shall not be reduced by the existence of such other insurance.
When both this insurance and other insurance apply to the loss on the same basis, whether primary, excess or contingent, the company shall not be liable under this policy for a greater proportion of the loss than that stated in the applicable contribution provision below: