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Reliance Ins. Co. v. General Reinsurance Corp

United States District Court for the Eastern District of Pennsylvania

December 18, 1980

Civ. A. No. 79-2500



This is an action by plaintiff Reliance Insurance Company (Reliance) for recovery of an insurance claim allegedly due under a re-insurance certificate issued to it by defendant General Reinsurance Corporation (General) on an excess umbrella policy. Trial was held before this court sitting without a jury. For the reasons which follow judgment will be entered in favor of the defendant.

This case had its origin in a motor vehicle collision which occurred on November 16, 1969, between a truck insured by Reliance and a jeep driven by Robert Blackwood (Blackwood). Blackwood was seriously injured and became a paraplegic. Reliance insured the truck under an automobile liability insurance policy issued to its insured, Desert Ginning Company (Desert), for a maximum of $ 300,000.00. Blackwood brought suit in California Superior Court, County of Riverside, against Desert, which suit was defended by Reliance.

Since Reliance did not have a local claims office,  [**2]  it retained General Adjustment Bureau (GAB) to investigate the accident, to employ such experts as might be necessary, including an accident reconstruction expert, and to attempt to reach a settlement with Blackwood.

On December 2, 1969, a GAB adjuster and Fred Cady (Cady), an accident reconstruction  [*1043]  expert retained by GAB, examined Blackwood's jeep, which at the time was parked in Blackwood's driveway. Cady removed certain parts from the jeep, in particular the left turn signal. At a subsequent trial in California, Cady testified that he had no permission from anyone to take parts from the jeep, but had assumed that GAB had obtained the necessary permission.

On July 24, 1970, Cady submitted his report to GAB, and advised that he had taken the left turn signal from the jeep, and requested instructions concerning storage of the parts. After Reliance's Los Angeles office received the report on July 27, 1970, that office instructed GAB's Claims Manager to return the parts. Reliance subsequently paid Cady for his services.

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506 F. Supp. 1042 *; 1980 U.S. Dist. LEXIS 16566 **



settlement, umbrella policy, occurrence, coverage, reinsurance, punitive damages, compensatory damages, certificate, jeep, joint application, award of punitive damages, insured, stipulated reversal, property damage, reversal, parties, settlement agreement, new trial, damages, personal injury, bodily injury, adjusters, trial court's judgment, negligent act, Endorsement, deductible, diminution, retrial, signal, insurance policy