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UNITED STATES FIDELITY & GUARANTY COMPANY v. PENNSYLVANIA NATIONAL MUTUAL CASUALTY INSURANCE COMPANY AND NORTHWESTERN NATIONAL INSURANCE COMPANY (12/31/87)

decided: December 31, 1987.

UNITED STATES FIDELITY & GUARANTY COMPANY, APPELLANT
v.
PENNSYLVANIA NATIONAL MUTUAL CASUALTY INSURANCE COMPANY AND NORTHWESTERN NATIONAL INSURANCE COMPANY, APPELLEES



Appeal from the Order of the Court of Common Pleas of Allegheny County in the case of United States Fidelity & Guaranty Company v. Pennsylvania National Mutual Casualty Insurance Company and Northwestern National Insurance Company, No. GD 84-5490, dated December 29, 1986.

COUNSEL

John M. Silvestri, for appellant.

Keith O. Brenneman, with him, John C. Carlin, Jr., for appellee, Pennsylvania National Mutual Casualty Insurance Co.

Ronald H. Heck, Ronald H. Heck & Associates, P.C., for appellee, Northwestern National Insurance Company.

President Judge Crumlish, Jr., Judge Colins, and Senior Judge Barbieri, sitting as a panel of three. Opinion by President Judge Crumlish, Jr.

Author: Crumlish

[ 112 Pa. Commw. Page 253]

United States Fidelity & Guaranty Company (Fidelity) appeals an Allegheny County Common Pleas Court order entering summary judgment in favor of appellees Northwestern National Insurance Company (Northwestern) and Pennsylvania National Mutual Casualty Insurance Company (Pa. National). We affirm as to Northwestern; we reverse and remand as to Pa. National.

Fidelity paid claims to two of its policyholders whose automobiles sustained damage in two separate accidents. The policyholders were not at fault. Instead, the City of McKeesport and the Penn Township Ambulance Association, Rescue No. 6 (Association), respectively, admitted liability.*fn1 Northwestern (for McKeesport) and Pa. National (on behalf of the Association) reimbursed the policyholders for their deductibles, but refused on the basis of Section 8553(d) of the Judicial Code*fn2 to pay Fidelity the amounts it claimed in subrogation. Hence, Fidelity filed a complaint in the nature of a declaratory action requesting that Section 8553(d) be interpreted so as to not bar their claims.

[ 112 Pa. Commw. Page 254]

Fidelity contends that the common pleas court erred in not recognizing its equitable right to redemption. It also argues that factual questions exist in the record as to whether the Association is a local agency entitled to immunity.

Of course, a common pleas court should only enter summary judgment where no genuine issue of material fact is in dispute and a clear right to the legal relief sought is established. Nordmann v. Commonwealth, 79 Pa. Commonwealth Ct. 187, 468 A.2d 1173 (1983).

Section 8553(d) of the Judicial Code*fn3 requires a claimant entitled to damages from a local agency to first collect and exhaust benefits for losses from his/her insurance company (except a life insurance company) before recovering damages from the local agency.

In Michel v. City of Bethlehem, 84 Pa. Commonwealth Ct. 43, 478 A.2d 164 (1984), we held that a claimant's insurance company, as subrogee, had no separate, distinguishable right to collect its loss from a local agency. Further, in Germantown Savings Bank v. City of Philadelphia, 98 Pa. Commonwealth Ct. 508, 512 A.2d 756 (1986), we upheld the constitutionality of Section 8553(d) and noted that its purpose was rationally ...


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