Case Name: James T. RAAB and Constance Raab, his wife, Appellants, v. KEYSTONE INSURANCE COMPANY and Ed O'Keefe, Individually and as employee and claims supervisor for Keystone Insurance Company
Court: Superior Court of Pennsylvania
Jurisdiction: Pennsylvania
Decision Date: 1979-10-19
Citations: 271 Pa. Super. 185
Docket Number: No. 2330
Parties: James T. RAAB and Constance Raab, his wife, Appellants, v. KEYSTONE INSURANCE COMPANY and Ed O’Keefe, Individually and as employee and claims supervisor for Keystone Insurance Company.
Judges: Before PRICE, SPAETH and LIPEZ, JJ.
Reporter: Pennsylvania Superior Court Reports
Volume: 271
Pages: 185–193

Head Matter:
412 A.2d 638
James T. RAAB and Constance Raab, his wife, Appellants, v. KEYSTONE INSURANCE COMPANY and Ed O’Keefe, Individually and as employee and claims supervisor for Keystone Insurance Company.
Superior Court of Pennsylvania.
Argued March 21, 1979.
Filed Oct. 19, 1979.
Reargument Denied Jan. 7, 1980.
Anthony B. Quinn, Philadelphia, for appellants.
Hugh J. Hutchison, Philadelphia, for appellees.
Before PRICE, SPAETH and LIPEZ, JJ.

Opinion:
LIPEZ, Judge:
Appellee Keystone Insurance Company (Keystone) issued a no-fault automobile insurance policy to appellants. Appellant James Raab was subsequently injured in an automobile accident. He filed a claim under the policy, and Keystone began paying benefits pursuant thereto. A few months later, Keystone suspended payment. Appellants brought this action in trespass on the theories of 1) Keystone's negligent failure to pay benefits according to the insurance contract; and 2) Appellee O'Keefe's alleged malicious interference with the contractual relationship between appellants and Keystone, O'Keefe's employer. The court below sustained appellee's demurrer and dismissed the complaint.
The issues raised on this appeal have been properly resolved in Judge Gelfand's Opinion for the court below, and we adopt that Opinion in relevant part:
The Complaint in trespass alleges that Defendants by failing to properly administer the business in which they were involved thereby acted in a negligent fashion in handling Plaintiff's no fault claim as a result of which Plaintiff husband sustained physical and emotional injuries. Generally, when the breach of a contractual relationship is expressed in terms of tortious conduct, the cause of action is properly brought in assumpsit and not in trespass. Damian v. Hernon, 102 Pa.Super. 539, 157 A. 520 (1931). However, there are circumstances out of which a breach of contract may give rise to an actionable tort. Closed Circuit Corp. of America v. Jerrold Electronics Corp., 426 F.Supp. 361 (E.D.Pa., 1977). The test used to determine if there exists a cause of action in tort growing out of a breach of contract is whether there was an improper performance of a contractual obligation (mis feasance) rather than the mere failure to perform (nonfeasance). Behrend v. Bell Telephone Company, 53 D & C 2d 421 (1971), citing Siegel v. Struble Bros., 150 Pa.Super. 343, 28 A.2d 352 (1942).
Plaintiffs allege that Defendant's negligence is grounded in their "failure" to take certain actions in the handling of Plaintiff's claim. Our examination of this alleged conduct indicates that it is in the nature of "nonfeasance" inasmuch as it is the "omitting to do, or not doing, something which ought to be done." Nelson v. Duquesne L. Co., 338 Pa. 37 at 44, 12 A.2d 299 at 303 (1940). Accordingly, we find no cause of action in trespass for negligent breach of contract exists under the allegations made herein.
In addition, Plaintiffs seek compensation for physical injuries which resulted from emotional distress caused by Defendants' alleged negligence and request that punitive damages be assessed against them. Inasmuch as we have determined that Plaintiffs failed to set forth a cause of action in trespass for negligent breach of contract, these claims for damages must fall.
Further, Plaintiffs seek relief for conduct of the individual defendant, Ed O'Keefe, which they claim constitutes malicious interference with the contractual relationship between Plaintiffs and the Defendant Company.
In this regard, our appellate courts have held that "[i]f one maliciously interferes in a contract between two parties, and induces one of them to break that contract to the injury of the other, the party injured can maintain an action against the wrongdoer." Ramando v. Pure Oil Co., 159 Pa.Super. 217 at 224, 48 A.2d 156 at 160 (1946).
In the instant matter, Plaintiffs would have this court view O'Keefe, a claims supervisor employed by the Defendant Company, as a third party who interposed himself between two parties to an agreement. However, Plaintiffs aver in the Complaint that O'Keefe "at all relevant times was the agent, servant, and/or employee of the defendant, Keystone Insurance Company, at all times acting within the course of his employment and scope of his authority, under and subject to the direct and exclusive control and supervision of the defendant. . . . " Inasmuch as Defendant Company can only act through its employees and O'Keefe is identified by Plaintiffs as the individual responsible for failing to authorize payments, the individual Defendant and the Company defendant are one and the same entity for purposes of this action. Consequently, there is no third party against who [sic] a claim of interference with contract can lie. Hence, Defendants' demurrer to Plaintiffs' contention that O'Keefe's conduct constituted malicious interference with a contractual relationship must be sustained.
Accordingly, it is the view of this Court, for the reasons heretofore expressed, that Plaintiffs' Complaint fails to state a cause of action upon which relief can be granted. (Footnotes omitted.)
Order affirmed.
PRICE, J., files a concurring statement.
SPAETH, J., files a dissenting opinion.