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CLAIRTON CITY SCHOOL DISTRICT v. GEORGE MARY ET AL. (05/26/88)

decided: May 26, 1988.

CLAIRTON CITY SCHOOL DISTRICT, APPELLANT
v.
GEORGE MARY ET AL., APPELLEES



Appeal from the Order of the Court of Common Pleas of Allegheny County, in the case of Clairton City School District v. George Mary and Stephen Gooder t/d/b/a Mary & Gooder Insurance Agency, Maryland Casualty Company, a corporation, Northern Insurance Company of New York, a corporation and Assurance Company of North America, a corporation, No. AD84-09341.

COUNSEL

Ira Weiss, Gross and Weiss, P.C., for appellant.

George M. Weis, Weis & Weis, for appellees.

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

Author: Palladino

[ 116 Pa. Commw. Page 377]

Clairton City School District (Appellant) appeals an order of the Court of Common Pleas of Allegheny County (trial court) dismissing its complaint on a case stated and entering judgment for George Mary and Steven Gooder t/d/b/a Mary and Gooder Insurance Agency (collectively, Agents), and for Maryland Casualty Company, Assurance Company of North America, and Northern Insurance Company of New York (collectively, Insurers).*fn1 We affirm.

On June 7, 1984, Appellant solicited bids for various insurance coverages to which Agents, on behalf of Insurers, submitted a bid in response to the solicitation. On September 12, 1984, Appellant awarded the insurance contracts to Agents and Insurers for multi-peril, fire, liability, auto, boiler, and machinery coverage at a bid premium of $9,964.00. Neither the bid specifications provided by Appellant nor the bid itself contained any provision regarding cancellation of the insurance policies.

Following the award, Insurers issued their various policies effective October 1, 1984. The policies which were issued contained clauses which provided that either party could cancel the policies upon notice. Shortly thereafter, Insurers cancelled the policies and the parties agree that the cancellations were effected pursuant

[ 116 Pa. Commw. Page 378]

    to the cancellation clauses.*fn2 Appellant then obtained insurance coverage from other insurers at a premium rate which was $17,602.00 more than the premium rate charged by Insurers.

Appellant instituted an action against Agents and Insurers for breach of contract and sought damages in the amount of $17,602.00 plus interest. The trial court dismissed Appellant's complaint and entered judgment for Agents and Insurers, holding that Insurers had validly cancelled the policies.

On appeal to this court, Appellant contends that because the bid specifications and the bid itself contained no provision for cancellation, a contract without a cancellation provision was formed when the bid was accepted. Appellant asserts that Agents and Insurers were obligated to provide insurance coverage at the quoted price and that cancellation of the policies constituted a breach of contract. Appellant argues that even if a cancellation clause was statutorily required in the insurance policies, Agents and Insurers are nevertheless contractually liable for damages resulting from the cancellation.*fn3

Our scope of review is to determine whether the trial court abused its discretion or committed an error of law. See Lynch v. Urban Redevelopment Authority of Pittsburgh, 91 Pa. Commonwealth Ct. 260, 496 A.2d 1331 (1985). In a case stated, we are confined ...


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