Court Opinion

ID: 9630037
Source: CourtListenerOpinion
Date Created: 2023-08-22 09:58:04.305806+00
Date Added: 2024-06-11T18:07:29.954852
License: Public Domain

*377NIX, Chief Justice,
concurring and dissenting.
I agree with the majority that an insurer should be permitted to rescind a fraudulently obtained insurance policy beyond the sixty-day period following issuance of the policy provided the fraud could not reasonably have been discovered during those sixty days and the insurer would not have assumed the risk of issuing the policy had the nature of the misrepresentations been known. However, I can not agree with the majority’s position that such a policy may be rescinded as to the perpetrator of the fraud but not as to third parties.
There is no basis for rescinding a contract as to the parties while allowing non-parties to benefit from that contract. Once a contract is rescinded it is treated as though it never existed. “A rescission amounts to the unmaking of a contract and is not merely a termination of the rights and obligations of the parties towards each other, but is an abrogation of all rights and responsibilities of the parties towards each other from the inception of the contract.” Klopp v. Keystone Ins. Cos., 528 Pa. 1, 7-8 n. 6, 595 A.2d 1, 4 n. 6 (1991) (quoting Metropolitan Property and Liab. Ins. Co. v. Commonwealth of Pennsylvania, Ins. Comm’r, 97 Pa.Commw. 219, 223, 509 A.2d 1346, 1348 (1986), aff'd. by an equally divided court, 517 Pa. 218, 535 A.2d 588 (1987)). The result reached by the majority combines the remedies of rescission and cancellation in order to allow relief to innocent parties who are injured at the hands of a driver who fraudulently obtained insurance. In my view, the proper remedy for such innocent victims is through their own insurance carrier if they were insured at the time of the accident or through the Assigned Claims Plan, 75 Pa.C.S. §§ 1751-1757, if they were not. See Pennsylvania Fin. Responsibility Assigned Claims Plan v. English, 541 Pa. 424, 664 A.2d 84 (1995).
Because I agree with the majority’s position that under certain circumstances an insurance policy may be rescinded beyond the sixty days following issuance of the policy, I would remand this matter to determine if these circumstances exist in the instant case. However, I dissent from the majority’s conclusion that if the requirements necessary to rescind the *378contract are met, the contract may be rescinded only as to the parties who committed the fraud but not as to the injured third parties.
FLAHERTY, J., joins in this concurring and dissenting opinion.