Erie Indemnity Co.

Not overruled or negatively treated on appealinfoCoverage
Supreme Court of PennsylvaniaOct 28, 1940
340 Pa. 417 (Pa. 1940)
340 Pa. 41716 A.2d 47

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October 2, 1940.

October 28, 1940.

Insurance — Automobile indemnity — Refusal of insurer to defend action — Liability of insurer beyond amount of policy.

An insurer, under a policy of automobile indemnity insurance, which had declined to defend an action against the insured by an injured party, but which subsequently paid the amount of a judgment obtained against it by the injured party, was held not to be liable to the insured, for the difference between the judgment obtained against the insured and the amount paid by the company, where the testimony showed no bad faith by the insurer.

Argued October 2, 1940.


Appeal, No. 114, March T., 1940, from judgment of C. P. Erie Co., Nov. T., 1938, No. 97, in case of Israel Epstein v. Erie Indemnity Company, attorney-in-fact of subscriber to Erie Insurance Exchange. Judgment affirmed.

Defendant issued its policy of automobile indemnity insurance to plaintiff in the sum of $5,000. Plaintiff injured Riva Fisher, who brought suit against him and recovered judgment for $12,750, which plaintiff did not pay. Fisher brought action in the United States Court against defendant and recovered from it the amount of the policy, $5,000, with interest and costs. Plaintiff, Epstein, then brought this action in trespass against defendant seeking to recover the amount, of the verdict obtained against him by Fisher, less the $5,000 recovery made by Fisher, a total claim of $9,324.78, with interest, basing his claim on the averment that defendant acted in bad faith, maliciously, fraudulently and intentionally in connection with the suit brought by Fisher, which defendant had refused to defend. The trial court, LARRABEE, P. J., specially presiding, entered a nonsuit upon the ground that the defendant, having declined to undertake the defense, could not be held liable beyond the amount of the policy and that the testimony showed no bad faith by defendant.

For the comprehensive opinion of Judge LARRABEE, see 39 Pa. D. C. 117.

Plaintiff appealed.

Error assigned, among others, was the action of the court below in refusing to take off the nonsuit.

Wm. Pollack, of Pollack Pollack, with him Charles A. Mertens, Jr., for appellant.

M. E. Graham and Gunnison, Fish, Gifford Chapin, for appellee, were not heard.

On the argument at Bar, judgment affirmed.