Superior Court 05/05/08 - AMERICAN AND FOREIGN INSURANCE COMPANY, ROYAL INSURANCE CO. OF AMERICA, SAFEGUARD INSURANCE COMPANY AND ROYAL INDEMNITY COMP

AMERICAN AND FOREIGN INSURANCE COMPANY, ROYAL INSURANCE CO. OF AMERICA, SAFEGUARD INSURANCE COMPANY AND ROYAL INDEMNITY COMPANY v. JERRY’S SPORT CENTER, INC., JERRY’S SPORT CENTER NORTHEAST, INC., BONITZ BROTHERS, INC. OUTDOOR SPORTS HEADQUARTERS, INC., SIMMONS GUN SPECIALITIES, INC., NATIONAL ASSOC. FOR THE ADVANCEMENT OF COLORED PEOPLE, NATIONAL SPINAL CORD INJURY ASSOC., AMERICAN INTERNATIONAL INSURANCE COMPANY, DOE CORPORATIONS 1-15 APPEAL OF: JERRY’S SPORT CENTER, INC., JERRY’S SPORT CENTER NORTHEAST, INC., BONITZ BROTHERS, INC., OUTDOOR SPORTS HEADQUARTERS, INC. AND SIMMONS GUN SPECIALITIES, INC.
No. 1098 MDA 2006 2008 PA Super 94 Atlantic: n/a Filed: 5/5/2008
Appeal from the Judgment Entered July 7, 2006In the Court of Common Pleas of Susquehanna CountyCivil Division at No. 2001-939
Before: STEVENS, ORIE MELVIN and BENDER, JJ.
Opinion by: BENDER, J.
Jerry’s Sport Center, Inc., and its subsidiaries, Jerry’s Sport Center Northeast, Inc., Bonitz Brothers, Inc., Outdoor Sports Headquarters, Inc., and Simmons Gun Specialties, Inc. (collectively, “Jerry’s Sport”), appeal from the July 7, 2006 judgment entered in favor of its commercial liability insurer, American and Foreign Insurance Company, Royal Insurance Company of America, Safeguard Insurance Company, and Royal Indemnity Company (collectively, “Royal”). For the reasons that follow, we conclude the trial court erred by granting Royal’s request for reimbursement of attorney fees that Royal had paid on behalf of Jerry’s Sport while Royal undertook a defense for Jerry’s Sport in an underlying suit pursuant to Royal’s putative reservation of rights for reimbursement of the attorneys fees from Jerry’s Sport should the court later (as it did) declare there was no coverage under the policy. Accordingly, we reverse the July 7, 2006 judgment entered in Royal’s favor.