in the Philadelphia County Court of Common Pleas in November, 1986; Sanchez subsequently called upon plaintiff to defend that action. E.H. Devine ("Devine"), insurance broker for Sanchez, is also named as a defendant in this action.
Two motions are pending before the court. Plaintiff seeks summary judgment against all defendants, contending that no genuine issue of fact remains regarding its purported cancellation of the Sanchez policy prior to the accident involving Ms. Ulshafer. Sanchez seeks summary judgment in its cross claim against Devine for indemnity and contribution in the event that plaintiff's motion is granted.
Sanchez purchased commercial insurance (policy no. BRC231676) for the Pyrenees Restaurant from Orion on October 4, 1984, with effective dates of coverage of October 4, 1984 through October 4, 1985. Devine acted as insurance broker for Sanchez. Soon after Orion issued the policy, Orion began to solicit from Devine information concerning Sanchez's financial condition. Orion contends that such information was necessary to determine whether the risk met their underwriting standards. Plaintiff's Motion for Summary Judgment at 4. Orion sent its initial inquiry on October 31, 1984. Unsatisfied with Devine's reply, Orion again wrote to Devine on January 28, 1985, stating, among other things, that the financial information provided to Orion was "insufficient for our purposes." Orion also stated that the Sanchez risk "does not meet our underwriting standards" and requested that "our coverage be terminated and replaced as quickly as possible." The letter concluded: "If we do not hear from you by March 10, in regards to replacing our coverage, we regret to have no alternative but to issue Direct Notice of Cancellation."
After Devine requested an extension of time to find replacement coverage, Orion agreed to extend coverage until April 25, 1985. See Orion Letter to E.H. Devine, March 6, 1985 (Attached as Exhibit "N" of Plaintiff Motion for Summary Judgment). Orion agreed to another extension of coverage through May 15, 1985. See Orion Letter to E.H. Devine, May 3, 1985 (Attached as Exhibit "O" to Plaintiff Motion for Summary Judgment). On May 20, 1985, Orion sent a Notice of Cancellation to Sanchez, cancelling the policy as of June 24, 1985. On July 17, 1985, Ms. Ulshafer allegedly sustained injuries on the premises of the Pyrenees Restaurant.
Under the insurance agreement between Orion and Sanchez, Orion was permitted to cancel the policy for reasons other than nonpayment if it informed the insured of the cancellation within thirty days of the proposed date of cancellation. The agreement provides as follows: