Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

METRO TRANSP. CO. v. BALBOA INS. CO.

January 6, 1988

Metro Transportation Co. t/a Yellow Cab Company, Official Creditors' Committee Pennsylvania Public Utility Commission
v.
Balboa Insurance Company



The opinion of the court was delivered by: LUDWIG

 Ludwig, J.

 AND NOW, this day of January, 1988, defendant Balboa Insurance Company's motion to dismiss under Fed.R.Civ.P. 12(b)(1), 17 and 12(b)(6) is denied. *fn1"

 1. Plaintiff Metro Transportation Company has standing to maintain this declaratory judgment action. The complaint alleges that Balboa wrongfully refused to "pay . . . claims and judgments asserted and/or entered against Metro" falling within the scope of coverage of two automobile insurance policies issued to Metro for the policy period from October 1, 1984 to October 1, 1986. (Complaint para. 15). Metro's financial exposure and Balboa's denial of coverage create an "actual controversy". Ideal Mut. Ins. Co. v. Limerick Aviation Co., 550 F. Supp. 437, 441 (E.D. Pa. 1982) (construing Declaratory Judgment Act, 28 U.S.C.A. § 2201 (West Supp. 1987)). See also Riehl v. Travelers Ins. Co., 772 F.2d 19, 22-23 (3d Cir. 1985) ("neither immediate liability for damages nor a liquidation to the extent of an insurer's indemnification obligation is necessary in this Circuit to establish a justiciable controversy").

 Metro's uncertainty with respect to its rights under the policies is a cognizable interest. See American Home Assurance Co. v. Liberty Mut. Ins. Co., 475 F. Supp. 1169, 1171 (E.D. Pa. 1979); 20 Appleman, Insurance Law & Practice § 11354, at 332 (1980). Even if Metro is obligated to reimburse Balboa, a declaration that Balboa must initially pay these tort claims would substantially affect Metro's reorganization plan. Depending on Balboa's status as a creditor, Metro could obtain an ultimate benefit greater than it has vis-a-vis numerous tort claimants currently listed as creditors in the bankruptcy proceeding. Cf. Kapp v. Naturelle, Inc., 611 F.2d 703, 707 (8th Cir. 1979) (when it appears that there may be a surplus of assets to be returned to the bankrupt if claims in a bankruptcy proceeding are disallowed, the bankrupt has standing to contest the claims).

 2. The complaint does not fail to state a claim upon which relief can be granted. Metro's failure to plead its inability to pay the tort claims arising out of its operation of vehicles between October 1, 1984 and October 1, 1986 is not fatal. Metro may be able to show that Balboa insured it against such claims and did not merely guarantee payment upon Metro's default. *fn2"

 Moreover, pursuant to its mandate to issue regulations for motor carriers "for the protection of persons or property of their patrons and the public," *fn3" the Pennsylvania Public Utility Commission requires common carriers to file a certificate of insurance, not a guaranty. *fn4" If, as alleged, Balboa filed such a certification, it may not be able to claim the policy is less effective than the statute requires. Thompson v. Amalgamated Casualty Ins. Co., 92 U.S. App. D.C. 307, 207 F.2d 214, 219 (D.C.Cir. 1953). Furthermore, it appears from the language of the policies, endorsements and certifications that an insured-insurer relationship was contemplated by the parties, not a guaranty ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.