Court Opinion

ID: 6259705
Source: CourtListenerOpinion
Date Created: 2022-02-17 21:58:47.970585+00
Date Added: 2024-06-11T08:59:40.333787
License: Public Domain

Dissenting Opinion by
Mr. Justice Roberts:
While I agree with the general principle relied upon by appellees that a suit brought in a court without jurisdiction is a mere nullity, I believe that appellants’ position rests not so much upon the existence of the federal action as it does upon appellees’ reaction to that federal suit. Appellants do not contend that the federal action tolled the statute, or that it worked a compliance with the policy. Rather, the Frattos contend that even if the federal action was a mere nullity and even if parties cannot confer subject matter jurisdiction upon a court which otherwise has no such jurisdiction, nevertheless it was appellees’ express admission of jurisdiction which caused appellants to continue their suit in the wrong forum thus preventing a timely action in the proper court. It is on this equitable principle of estoppel, not on the legal effect of the federal suit itself, that appellants rest their case.
Viewed in this perspective, the present controversy is easily distinguishable from Miller v. Fulton, 206 Pa. 595, 56 Atl. 74 (1903); Keystone Mut. Benefit Assoc. v. Norris, 115 Pa. 446, 8 Atl. 638 (1886); Roth v. Northern Assurance Co., 46 Ill. App. 2d 253, 196 N.E. 2d 389 (1964). In Keystone, there was no allegation that the insurance company in any way lulled plaintiff into continuing its first suit in the wrong court. In Miller, the trial court itself apparently cautioned plaintiff that he might be in the wrong forum. And in Roth, the insurance company promptly moved for *144dismissal of the federal action on jurisdictional grounds. Thus, all three cases comport with the general notion that a party ought not be able to plead his own conduct as an excuse for failing to comply with a statute of limitations. See Lardas v. Underwriters Ins. Co., 426 Pa. 47, 231 A. 2d 740 (1967).
Dalzell v. London and Lancashire Fire Insurance Company, 252 Pa. 265, 97 Atl. 452 (1916) and Hocking v. Howard Insurance Co., 130 Pa. 170, 18 Atl. 614 (1889), however, are practically indistinguishable from the present case. In my view these cases are inconsistent with basic notions of justice especially in this area of technical requirements in insurance contracts and should therefore no longer represent the law of this Commonwealth. In Dalzell the insured instituted his action in the state court only to have it removed at the insistence of defendant insurance company to the federal court. When the federal court finally decided that it lacked jurisdiction over the controversy, plaintiff was held barred by the one year policy statute of limitations from commencing a new suit in the state forum. It should be only too obvious that this decision flies against every conceivable notion of logic and justice. It was, I believe, incorrect when decided and I would overrule it with no hesitancy whatsoever.
Hocking, however, presents a more difficult problem. In that case plaintiff insured brought his first action well within the time limits of the policy. At trial, however, the company for the first time asserted that the action was premature (it having been commenced less than 60 days after plaintiff had filed with the company a statement of loss in contravention of the policy provision giving the insurer a 60 day grace period). The trial court agreed and dismissed plaintiff’s action. His second suit was held untimely. On appeal, plaintiff argued that the insurer’s failure to raise *145the prematurity defense in its answer in time to allow plaintiff to commence a timely action after the 60 day period worked an estoppel of the company’s right to invoke the one year statute of limitations in the second suit. This Court rejected that argument, holding that the estoppel notion has no effect after the parties commence legal action, since then both sides are deemed to be at arms’ length.
On reflection, however, I believe that this “arms’ length” solution is too simplistic, for the notion of the arms’ length transaction still requires that the “arm” holding a boxing glove, rather than a mace. Dilatory tactics such as those apparently used by the insurance company in Hocking have never been favored in the law. And in this regard it should not matter whether the parties have commenced suit, or not. Both in Hocking and in the present case, the insurance company had a complete defense to the first lawsuit. In both cases this defense was raised so late in the proceedings that the insured found himself unable to begin anew in the proper court or (as in Hocking) after the proper 60 day period. Moreover, the case now before us in large measure presents an even more appealing fact pattern than Hocking. Appellees expressly admitted federal jurisdiction here. They were more than willing to try this case in the federal courts on the merits. However, by the federal court’s own act appellees found themselves out of that forum unscathed. They now attempt to reap a complete windfall from this turn of events by invoking the one year statute of limitations.
In my view, the better result in cases of this sort is that reached by the court in Bollinger v. National Fire Ins. Co. of Hartford, 25 Cal. 2d 399, 154 P. 2d 399 (1944) (Traynor, J.), a case on all fours with Hocking except in result. There, just as in Hocking, *146the first suit was commenced prematurely and the second beyond the applicable period of limitations. Yet the court refused to allow the company to invoke the statute, holding that by delaying the first suit beyond the contractual period and then raising the prematurity defense for the first time, the insurer could not then take advantage of the statute of limitations provision. The California court said simply: “Under the circumstances it would be a perversion of the policy of the statute of limitation to deny a trial on the merits.” Id. at 406, 154 P. 2d at 403.
It has been long established in Pennsylvania that where an insured commences his lawsuit beyond the statutory period, the company may not defend on this ground when the insured’s delay was itself induced by the company. For example, in Arlotte v. National Liberty Ins. Co., 312 Pa. 442, 167 Atl. 295 (1933), the insured’s dwelling was destroyed when it was hit by a truck. Since all the parties assumed that the insured’s copy of the policy had been destroyed in the ensuing fire, the company agent erroneously told the insured that the policy did not cover this sort of damage. After the one year period had expired, the insured found the policy among his belongings, discovered that truck damage was covered, and commenced his suit. We held the company estopped from raising the statute of limitations. I see no reason not to extend this fair and equitable rule to cases such as the present one, where appellants’ continuation of a suit in an improper court was encouraged by appellees’ express agreement that that Court was the proper forum. Just as in the truck case, appellee could have discovered their error by themselves; but this did not move us in Arlotte, and in my view should not move us here. When the company, by its action, sets in motion the events leading to an insured’s eventual noncompliance *147with a policy provision, the company must not be permitted to defeat a claim by invoking that provision.
There remains, however, one more fly in the ointment of this case’s resolution. Appellants’ theory must* of course, rest on the fact that a timely state court action could have been brought had the company promptly raised the issue of jurisdiction in the federal forum. In this regard, therefore, I am troubled by the fact that this record conclusively shows that appellants’ federal action was itself brought in June, 1963, a full year and a half after the fire. In an affidavit opposing the motion for summary judgment, appellants’ counsel recites that this initial delay in the federal court was the result of negotiations with the company tending towards settlement. A finding that delay was caused by negotiations prompted the federal court to excuse appellants’ lateness in their other two federal actions. However, the federal court never ruled on this delay, in spite of the fact that appellees raised it in their federal court answer, since that tribunal dismissed on jurisdictional grounds. Moreover, the court below also failed to rule on the federal court delay since it no doubt believed this issue irrelevant.
I do not regard the issue as irrelevant, for if the federal suit itself was not timely, then appellees are entitled to a judgment in their favor. If, on the other hand, the court below were to find that the initial delay in filing the federal action was excused by the company’s willingness to attempt a negotiated settlement, then I believe appellants may proceed to trial. Appellants’ affidavit opposing the motion for summary judgment states that settlement negotiations account for their failure to file the federal court action within one year, a statement not denied by appellees. This affidavit places in issue the factual question of what caused the apparent lateness of the federal action thus *148creating a material issue of fact sufficient to withstand the motion for summary judgment. That appellees have not denied the statements contained in appellants’ affidavit, however, should not, in our opinion, operate to appellees’ prejudice, given the fact that until today the parties may well have regarded the timeliness of the federal suit as irrelevant. Thus, I believe that this case should be remanded in order for the court below to decide whether appellants’ tardy commencement of their federal court suit was excusable.
I dissent.
Mr. Justice O’Brien joins in this dissenting opinion.