Court Opinion

ID: 6263936
Source: CourtListenerOpinion
Date Created: 2022-02-17 23:11:57.197601+00
Date Added: 2024-06-11T08:59:45.811422
License: Public Domain

NIX, Chief Justice,
concurring.
While I agree that the insurers under the facts of the cases before us cannot establish a valid claim for rescission of the policies in question, I cannot accept the sweeping holding in the Opinion Announcing the Judgment of the Court that the passage of Act 78, 40 P.S. § 1008.1 et seq. (Supp.1987),1 expresses a legislative intent to foreclose an action for rescission of a policy in an appropriate case.
The Act in question related solely to cancellation, refusal to write or to renew a policy for automobile insurance. Section 4 of Act 78, 40 P.S. § 1008.4, provides the grounds for which the cancellation may be granted. Section 5, 40 P.S. § 1008.5, provides the procedure to be followed before that cancellation becomes effective. Under the terms of the Act, the policy remains in effect until the insurer “shall deliver or mail, to the named insured ...” such notice of cancellation. 40 P.S. § 1008.5. Although section 4 provides for cancellation upon a showing of a misrepresentation, “material to the acceptance of the risk by the insurer”, 40 P.S. § 1008.4, this right would not defeat a claim of loss arising between the issuance of the policy and the effectuation of the cancellation of that policy as required by section *2325 of the Act. Thus the Act makes no provision for the rejection of a claim where the policy was in fact obtained through the material misrepresentation between the issuance of that fraudulently secured policy and the effectuation of the cancellation of that policy.
The premise of the Opinion Annoucing the Judgment of the Court is that, since the Act does not expressly provide for a right of rescission, we must infer a legislative intention to abrogate the well recognized right to rescind, ab initio, a fraudulently procured policy. See Safeguard Mutual Insurance Co. v. Huggins, 241 Pa.Super. 382, 361 A.2d 711 (1976). This result was reached in the Opinion Announcing Judgment even though it is there conceded that the false procurement of the policy may well amount to a criminal act. 40 P.S. § 474. To ascribe this intent to the legislature is to attribute to them an absurd result, 1 Pa.C.S. § 1922. In my view the fact that the legislature decided to provide a procedure for cancellation or refusal to renew policies and placed these matters under the auspices of the insurance commissioner does not warrant the inference of the elimination of the well recognized contract remedy of rescission where a fraud has occurred.2.
The Opinion Announcing Judgment attempts to justify this result by characterizing as a “marketing tool” the practice of immediate coverage before the insurer has had an opportunity to thoroughly check the accuracy of the representation made in the application. This disparagement ignores the fact that the major purpose of the automobile insurance laws was to support the policy of this Commonwealth that drivers of motor vehicles should be financially responsible for injury or damage they may cause upon our highways. See Motor Vehicle Financial Responsibility Law, 75 Pa.C.S. § 1701 et seq. If thorough verification must be *233made to assure the veracity of the responses before coverage is afforded, to guard against the relatively small number of cases where there may be a deliberate attempt to deceive, such an approach would serve to undermine that policy rather than support it.
I concur in the result because the misrepresentations in the two cases before us were not material to the loss that was claimed. Property damage by vandalism or theft of a vehicle and its contents has no relationship to the drivers’ misstatements as to their prior driving records. While these complaints may well have justified a cancellation of the policy, if the provisions of the Act had been properly followed, there was no basis for a rescission to avoid coverage for alleged misstatements which were in no way material to the loss sustained.3
FLAHERTY and PAPADAKOS, JJ., join in this opinion.

. Act of June 5, 1968. P.L. 140, No. 78 § 1 et seq., as amended.

. The implicit premise of the Opinion Announcing the Judgment of the Court is that the statutory remedy supersedes and eliminates all prior common law remedies. However, the suggestion that a common law tort action for fraud based upon the misrepresentation may still be a viable action, see maj. op. at 228-229, seems inconsistent with this principle.

. The views expressed in this opinion would not absolve the insurer from the responsibility of promptly reviewing the veracity of statements contained in an application for insurance and of seeking to rescind the insurance contract timely once discovery of the material misrepresentation is made. See, e.g., Fichera v. Gording, 424 Pa. 404, 227 A.2d 642 (1967). The instant complaint is directed at the total abrogation of the remedy of rescission in this area.