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HANS MICHEL AND WILHELMINA MICHEL AND STATE FARM INSURANCE CO. v. CITY BETHLEHEM (07/18/84)

decided: July 18, 1984.

HANS MICHEL AND WILHELMINA MICHEL AND STATE FARM INSURANCE CO., APPELLANTS
v.
CITY OF BETHLEHEM, APPELLEE



Appeal from the Order of the Court of Common Pleas of Northampton County in case of Hans Michel and Wilhelmina Michel, and State Farm Insurance Company v. City of Bethlehem, No. 1979-C-12462.

COUNSEL

Charles J. Fonzone, for appellants.

Matthew R. Sorrentino, for appellee.

Judges Rogers, Craig and Barbieri, sitting as a panel of three. Opinion by Judge Rogers.

Author: Rogers

[ 84 Pa. Commw. Page 44]

Hans and Wilhelmina Michel and the State Farm Insurance Company have appealed from an order of the Court of Common Pleas of Northampton County granting the City of Bethlehem's motion for summary judgment against State Farm.

The facts are not in dispute. On February 15, 1979, a water pipe owned and maintained by the City of Bethlehem ruptured causing damages in the amount of $23,490 to a house owned by Hans and Wilhelmina Michel. State Farm, as insurers of the damaged premises, paid the Michels $20,440.00 in discharge of its obligation under the policy of insurance. The Michels and State Farm brought separate actions against the City of Bethlehem. The Michels sought

[ 84 Pa. Commw. Page 45]

    recovery of damages in the amount of $23,490.00. State Farm's action was based on its asserted right of subrogation and sought recovery of the $20,440 which it had paid to the Michels. The cases were consolidated and the City moved for summary judgment against both plaintiffs. The trial court entered a partial summary judgment against the Michels effectively reducing their claim to $3,050.00, the amount of their losses not already paid by State Farm. This action is not a subject of this appeal.

The trial court entered a summary judgment against State Farm's total claim holding that its suit was barred by Section 8553(d) of the Judicial Code, 42 Pa. C.S. ยง 8553. State Farm has appealed from the judgment.

In Ayala v. City of Philadelphia, 453 Pa. 584, 305 A.2d 877 (1973), the Pennsylvania Supreme Court abrogated the doctrine of governmental immunity in Pennsylvania. In response, the Pennsylvania Legislature, pursuant to Article I, Section 11 of the Pennsylvania Constitution, enacted the Political Subdivisions Tort Claims Act.*fn1 This legislation reestablished the immunity of political subdivisions from suit, excepting however, claims of persons for injuries resulting from eight separately described causes. In the same Act, the Legislature placed limitation on the extent of the liability of political subdivisions to injured persons in cases falling within the eight exceptions. In this case we are concerned with the limitation made by Section 8553(d) of the Act which provides:

(d) Insurance Benefits -- If a claimant receives or is entitled to receive benefits under a policy of ...


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