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INSURANCE COMPANY NORTH AMERICA v. RONALD R. RALL AND MARGARET A. RALL (01/30/87)

filed: January 30, 1987.

INSURANCE COMPANY OF NORTH AMERICA
v.
RONALD R. RALL AND MARGARET A. RALL, HIS WIFE, AND FARMERS FIRE INSURANCE COMPANY V. BARNET, INC., FOR ITSELF AND DOING BUSINESS AS GATEWAY UNDERWRITERS, AND GEORGE JONES, INDIVIDUALLY AND TRADING AND DOING BUSINESS AS REAL REALTY. APPEAL OF FARMERS FIRE INSURANCE COMPANY



Appeal from the Order of the Court of Common Pleas, Allegheny County, Civil Division, at No. GD 82-14340.

COUNSEL

C. Robert Keenan, III, Pittsburgh, for appellant.

John W. Smart, Pittsburgh, for Insurance Co. of North America, appellee.

Paul W. Roman, Jr., Pittsburgh, for Barnet, appellee.

John B. Nicklas, Jr., Pittsburgh, for Jones, appellee.

Wickersham, Brosky and Johnson, JJ.

Author: Brosky

[ 360 Pa. Super. Page 377]

This is an appeal from an order denying appellant's posttrial motions. Judgment was entered against appellant after a non-jury trial in which appellant was found liable for property damages suffered as a result of a fire to premises it had insured.

Appellant raises four issues for disposition: (1) whether an insurer is obligated to provide notice to a mortgagee of a lapse in insurance coverage upon the mortgaged premises, (2) whether the mortgagee's failure to keep adequate records as to its debtor's property insurance constitutes negligence so as to prevent recovery by the mortgagee, (3) whether the insurer can be held liable for acts or omissions of a broker where such insurance broker had the only contact with the insured, (4) whether the stipulation of an amount paid by an insurer to its insured is sufficient evidence of the insurer's damage in a subrogation action against another insurer allegedly liable for the debt to the subrogor.

We have carefully considered the above issues and the arguments presented by counsel respective to each and find the entry of the challenged order was improper. Accordingly, we reverse the order entered by the trial court.

The facts giving rise to this appeal can be summarized as follows: In 1976, Ronald and Margaret Rall, bought a home which was financed by appellee First Federal Savings and Loan Association. First Federal took a mortgage interest in the property to secure the loan. The Ralls' secured property insurance, through the aid of their real estate broker, George Jones, who utilized Barnet, Inc., an insurance broker, from appellant Farmer's Fire Insurance Company for the period of July 15, 1976 to July 15, 1979. The Ralls paid the first two years premiums but failed to pay the third, whereupon, that installment was paid by Jones who then notified the Ralls that the policy would not be renewed unless payment was made. Payment was not made by the Ralls or anyone else subsequent to that time.

[ 360 Pa. Super. Page 378]

On October 20, 1980, more than a year after the policy's expiration date, a fire occurred at the mortgaged premises. Payment of the mortgage had been insured by Insurance Company of North America (INA). INA paid First Federal the balance of the mortgage and then sued Farmer's Fire and the Ralls as subrogee. A non-jury trial held on September 26, 1984 in the Court of Common Pleas of Allegheny County resulted in a verdict in favor of INA against the Ralls and ...


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