Court Opinion

ID: 8889697
Source: CourtListenerOpinion
Date Created: 2022-11-26 22:54:05.065854+00
Date Added: 2024-06-11T17:07:08.143406
License: Public Domain

KALODNER, Circuit Judge
(dissenting).
The insurance policy here involved provides that an action may be instituted against the insurer for recovery of a judgment against its insured to the extent of the policy’s coverage, without specification as to the time in which the action must be brought.1
The majority holds that the suit here is upon the contract and not upon the judgment, and that accordingly, it is barred by the Pennsylvania Statute of Limitations, 12 P.S. § 31, which fixes a six-year limit for action on a contract.
*1364The Achilles’ heel of the stated holding is that it limits its consideration to the single circumstance that the policy confers the right-to-sue on a judgment and disregards the inherent attributes of a judgment and its force insofar as time limitation for its enforcement is concerned. The majority, in other words, has seen fit to focus its attention on the packaging, and not the content, of the judgment privilege.
I disagree with the majority’s disposition for these reasons:
It is settled Pennsylvania law that (1) an action on a judgment is not governed by the six-year Pennsylvania Statute of Limitations applicable to contract actions,2 and (2) the vitality of a judgment prevails undiminished for a period of twenty years inasmuch as a presumption of payment arises only after a lapse of twenty years.3
The policy here provides that the insurer may be sued for recovery of a judgment obtained against its insured to the extent of its coverage. It does not fix a time limit for the institution of such an action although it could have done so under prevailing Pennsylvania law.4
Since the policy fixes no time limitations respecting the exercise of its right-to-sue provision we must resort to Pennsylvania decisions applicable to the construction of an insurance policy.
These settled Pennsylvania principles are applicable:
“It is well settled that an insurance policy will be construed most strongly against the insurer who has prepared it,” 5 and “[i]n case of doubt and ambiguity, a provision of an insurance policy will be construed against the insurer who drafted the instrument.” 6
“In determining what constitutes the obligation of a contract, no principle is more firmly established than that the laws which were in force at the time and place of the making of the contract enter into its obligation with the same effect as if expressly incorporated in its terms.” Beaver County Building and Loan Association v. Winowich, 323 Pa. 483, 489, 187 A. 481, 484 (1936) (emphasis supplied).
The majority has not given effect to the foregoing principles.
It has not construed the policy “most strongly against the insurer who has prepared it.”
It has not accorded the appellant the benefit of the Pennsylvania rule that an action on a judgment is not subject to the six-year Pennsylvania Statute of Limitations.
It has barred a suit upon a judgment which is less than twenty years old although it concedes that the vitality of the judgment exists for twenty years under Pennsylvania law. (footnote 4, majority opinion).
It has made a shambles of the right accorded by a policy to sue the insurer on a judgment by its ruling that when *1365such an action is instituted it must be regarded as a suit upon the contract and not upon the judgment.
The net effect of the majority’s ruling is that it makes a judgment subject to the impact of the six-year Pennsylvania Statute of Limitations, applicable to contracts, in disregard of the Pennsylvania rule that a judgment is not governed by this statute.
“Rich gifts wax poor when givers prove unkind.” 7
In paraphrase: “Rich gifts wax poor when judges prove unkind.”
There remains this to be said:
There is no precedent in Pennsylvania, or any other jurisdiction, state or federal, for the majority’s holding that when a policy grants a right to sue the insurer on a judgment, such an action must be regarded as a suit upon a contract and not upon a judgment.
The majority here sets an unfortunate precedent of transcending importance in insurance law.
I would vacate the Order of the District Court.8

. Paragraph 6 of “CONDITIONS” of the policy, captioned “Action Against Company” provides as follows:
“No action shall lie against the Company unless, as a condition precedent thereto, the Insured shall have fully complied with all the terms of this policy, nor until the amount of the Insured's obligation to pay shall have been finally determined either by judgment against the Insured after actual trial or by written agreement of the Insured, the claimant and the Company.
“Any person or organization or the legal representative thereof who has secured such judgment or written agreement shall thereafter be entitled to recover under this policy to the extent of the insurance afforded by this policy. Nothing contained in this policy shall give any person or organization any right to join the Company as a co-defendant in any action against the Insured to determine the Insured’s liability.
“Bankruptcy or insolvency of the Insured or of the Insured’s estate shall not relieve the Company of any of its obligations hereunder.”
(Emphasis supplied).

. Evans v. Cleary, 125 Pa. 204, 211, 17 A. 440, 442 (1889); Stewart v. Peterson’s Executors, 63 Pa. 230, 234 (1870); Vincent v. Watson, 40 Pa. 306, 309 (1861); Henry’s Estate (No. 1), 28 Pa. Super. 541, 543 (1905); 22 Pennsylvania Law Encyclopedia, Limitation of Actions, § 29.

. Smith v. Shoenberger, 176 Pa. 95, 34 A. 954 (1896); Gregory v. Commonwealth, 121 Pa. 611, 15 A. 452 (1888); Reed v. Reed, 46 Pa. 239, 242 (1963); Peoples Loan & Investment Co. v. Perl, 45 Lackawanna Jurist 199 (C.P.1944); Baker’s Estate, 48 Pa.Dist. & Co.R. 163, 166 (C.P. Montgomery County 1943).

. Ferguson v. Manufacturers’ Casualty Insurance Company of Philadelphia, 129 Pa. Super. 276, 280-282, 195 A. 661, 663-664 (1937). There the policy granted a right to sue the insurer for recovery of a judgment against the insured provided such suit was “brought within ninety (90) days after the right of action accrues. . . .”

. Blue Anchor Overall Co. v. Pennsylvania Lumbermens Mutual Insurance Company, 385 Pa. 394, 397, 123 A.2d 413, 415 (1956).

. Walter v. Dunlap, 368 F.2d 118, 120 (3 Cir. 1966) (citing Pennsylvania cases). See, too, Miller v. Boston Insurance Company, 420 Pa. 566, 570, 218 A.2d 275, 277 (1966); Papadell v. Harleysville Mutual Casualty Company, 411 Pa. 214, 216, 191 A.2d 274, 275 (1963).

. Hamlet, Act III, Scene i.

. The District Court’s Order under review is premised solely on the conclusion “that plaintiff’s claim is barred by the statute of limitations.” The majority has directed its consideration to the stated premise of the District Court’s disposition. This dissent lias likewise done so.