prospective underwriters, would support a finding of bad faith.
There can be no doubt that the mistake of inserting an incorrect exclusion in the 1983 and 1984 policies was attributable to the carelessness or negligence of Mr. Trumbower acting on behalf of Twin City. However, reformation is not barred by negligent conduct. See General Electric Credit Corporation v. Aetna Casualty Surety Company, 437 Pa. 463, 479, 263 A.2d 448, 457 (1970) and Bugen v. New York Life Insurance Company, 408 Pa. 472, 478, 184 A.2d 499, 502 (1962).
It is important to remember that the instant case involves negligence in writing up the intent of the parties relative to an agreement actually reached (same terms and conditions per 1982 Old Republic policy which contained a complete asbestos exclusion).
This claim for reformation is an equitable one and the doctrine of laches applies rather than any statute of limitations. Here, Twin City was unaware of the mistaken endorsement in the policies issued to Pittsburgh Corning for the years 1983 and 1984 until eight months before it filed this action on April 4, 1989. Pittsburgh Corning's failure to inform Twin City of the mistake once Pittsburgh Corning recognized the mistaken endorsement prior to the renewal for 1984 policy period certainly contributed to Twin City's unawareness of the mistaken endorsement until August of 1988.
Further, we fail to find on this record that Pittsburgh Corning has suffered prejudice to its legal rights or its ability to adequately defend Twin City's claims because of an eight month delay before commencing this lawsuit after Twin City became aware of the mistaken endorsement. This Court concludes that the defense of laches is not available to Pittsburgh Corning in this case.
Accordingly, we make the following
CONCLUSIONS OF LAW
1. Jurisdiction to adjudicate this case exists pursuant to 28 U.S.C. § 1332 and 28 U.S.C. §§ 2201-2202.
2. The amount in controversy, exclusive of interests and costs, exceeds $ 10,000.
3. Twin City Fire Insurance Company is equitably entitled to have its policies numbered TXU105918 and 98 TXU110876 issued to Pittsburgh Corning Corporation reformed so as to reflect the actual intent of the parties, which was to exclude coverage for all claims arising from asbestos or asbestos products.
4. The terms and conditions of the Twin City Fire Insurance Company policies numbered TXU105918 and 98TXU110876, as reformed, do not cover the claims involving the asbestos property damage hazard or risk for which Pittsburgh Corning Corporation has demanded coverage.
An appropriate Order will be filed.
AND NOW, this 26th day of August, 1992, after a non-jury trial and in accord with the Findings of Fact, Conclusions of Law and Discussion set forth in the accompanying Adjudication,
IT IS ORDERED AND DECLARED, that:
(1) Twin City Fire Insurance Company policies numbered TXU105918 and 98TXU110876 issued to Pittsburgh Corning Corporation are hereby reformed to exclude coverage for the years 1983 and 1984 for all claims arising from asbestos or asbestos products.
(2) Twin City Fire Insurance Company owes no insurance coverage obligation to Pittsburgh Corning Corporation for claims involving asbestos property damage hazards or risk.
(3) The Clerk of this Court shall upon the filing of this Order mark the above-captioned case closed.
Glenn E. Mencer
United States District Judge