author: POPOVICH, Judge:

text:
    563 A.2d 114
    CENTURY 21 HERITAGE REALTY, INC., Appellee, v. William BAIR and Carl Cheek, Appellants.
    Superior Court of Pennsylvania.
    Argued April 19, 1989.
    Filed July 31, 1989.

      James Greenberg, York, for appellant.
    Daniel W. Shoemaker, York, for appellee.
    Before ROWLEY, POPOVICH and JOHNSON, JJ.
   POPOVICH, Judge:

This is an appeal from an order of the Court of Common Pleas of York County denying the appellants’ motions for judgment n.o.v. and/or a new trial after a verdict in favor of the appellees on their claim for unpaid commissions due following the sale of the appellants’ property. We reverse and remand for a new trial.

The record reveals that two lawsuits arising from the same set of facts were combined for trial. The first, out of which this appeal arises, involved the appellees’ claim for their commission for providing a ready, willing and able buyer for The Dock of Hellam, Inc. which was wholly owned by the appellants. The second suit involved John and Mary Wagner’s claim for breach of a valid oral contract to purchase the stock of the corporation. The appellants allegedly breached the contract by selling the business to another individual. The Wagners ultimately purchased the business from the other buyer at a substantially higher cost.

Testimony at trial revealed that the appellants listed their business for sale with Century 21-Heritage Realty. The original six-month exclusive listing agreement was in the name of The Dock of Hellam, Inc. and was signed by William Bair as President of the corporation. However, Sterling Kline, the realtor’s agent, testified that the appellants said the business could be sold either as a sale of assets by the corporation or as a sale of their individual stock. The exclusive listing contract expired prior to the sale of the property. While the appellants did not renew the contract, they did allow Kline to continue his efforts to sell the property.

Thereafter, Kline contacted the Wagners who had previously expressed an interest in the property under the terms of the original listing contract. After a discussion with the Wagners, Kline drew up a specific sales proposal which required the appellants to finance most of the purchase price. Kline then advised the appellants that the Wagners would accept a proposal similar to the one he had drafted and requested authority to submit the proposal to the Wagners. Kline testified that the appellants then authorized the contract in advance if Kline could obtain the Wagners’ signatures immediately.

The Wagners accepted the proposal to purchase the business at a price of $175,000. A written sales agreement listing The Dock of Hellam, Inc., as the seller and describing the property as all the business assets of the corporation, including the real estate, liquor license and equipment, was prepared. The appellants were also listed individually as sellers. The Wagners signed the agreement. However, when Kline proffered the agreement to the appellants, they refused to sign and informed Kline that they had already sold the business to another individual. It is important to note that the sales contract provided that it was void unless approved by the sellers within five days.

The appellants’ version of the events is somewhat different. The appellants deny authorizing Kline to submit the proposal to the Wagners. The appellants also contend they informed Kline that they would only accept a cash sale and would not accept any proposal whereby they retained any interest in the property.

The appellants first tried to have both actions dismissed by motion for summary judgment alleging a violation of the statute of frauds applicable to the sale of real estate. This motion was denied by the court. The court reasoned that the Wagners had sued the appellants individually contending that the sale was for the stock of the corporation not for the assets, and, therefore, the statute of frauds did not apply. The appellant later alleged that a sale of the stock of a closely-held corporation was also covered by the statute of frauds citing Jennison v. Jennison, 346 Pa.Super. 47, 499 A.2d 302 (1985), and § 8319 of the Uniform Commercial Code. Although the court accepted this analysis, the Wagners argued that their case fell within an exception to § 8319 which stated that an oral contract may be enforced if:

There is some writing signed by the party against whom enforcement is sought, or by his authorized agent, or broker, sufficient to indicate that a contract has been made for sale of a stated quantity of described securities at a defined or stated price.

The Wagners pointed to the sale agreement drafted by Kline, which was unenforceable, but, which they alleged, qualified as a writing sufficient to make the oral contract enforceable. Over defense objection, the lower court allowed the Wagners to introduce parol evidence to prove that the writing satisfied the exception to the statute of frauds outlined in § 8319 of the U.C.C.

At the close of the plaintiffs’ cases, the appellants moved for a directed verdict again alleging a violation of the statute of frauds. However, the court denied the motion and allowed the case to proceed.

Ultimately, the jury found in favor of the Wagners and Century 21-Heritage Realty and Sterling Kline. Thereafter, the appellants moved for judgment n.o.v. or, in the alternative, a new trial in both suits. In the Wagners’ suit, the lower court, citing Vitro Manufacturing Co. v. Standard Chemical Co., 291 Pa. 85, 139 A. 615 (1927), recognized its error in allowing parol evidence to contradict the plain language of the sales agreement, specifically the application of the five-day clause. Since the agreement had not become final, the court found it could not serve as a writing which evidenced an oral agreement to sell stock. In sum, the Wagners and the appellants never entered into an enforceable contract for the sale of the property. Consequently, the court granted the appellants’ request for judgment n.o.v. with respect to the Wagners’ suit.

However, the court, viewing the evidence in the light most favorable to the verdict winner, concluded that the appellees did establish that they produced ready, willing and able buyers for the property. Therefore, the court denied the appellants’ motions with respect to the appellees.

Presently, the appellants assert that the trial court erred by refusing their request for special interrogatories.

Generally, a trial judge in Pennsylvania may grant or refuse a request for special findings on the basis of whether such would add to the logical and reasonable understanding of the issue. We will not disturb a trial judge’s decision to grant or refuse the request absent an abuse of discretion.. Willinger v. Mercy Catholic Medical Center, 482 Pa. 441, 445-46 n. 4, 393 A.2d 1188, 1190 n. 4 (1978); Krock v. Chroust, 330 Pa.Super. 108, 478 A.2d 1376 (1984); Walsh v. Pennsylvania Gas & Water Co., 303 Pa.Super. 52, 449 A.2d 573 (1982). Instantly, the appellants requested that the lower court present special interrogatories to the jury, among which was the question: “Do you find in the case of Century 21 v. Cheek and Bair that Sterling Kline, as agent of Century 21 — Heritage Realty, Inc., brought to the Defendants a purchaser ready, willing and able to purchase the property upon terms satisfactory and agreed to by the Defendants.” (Appellants’ Motions for Post Trial Relief). Upon review, we find that the trial judge’s refusal to submit special interrogatories to the jury constituted an abuse of discretion.

In reaching our decision, we first view the charge to the jury in its entirety. See generally, Reilly by Reilly v. Southeastern Pa. Transp. Auth., 507 Pa. 204, 489 A.2d 1291 (1985) (standard of review for jury instructions). The court instructed the jury correctly that, under Pennsylvania law, a real estate broker is entitled to his commission when

he or she presents the seller with a buyer who is ready, willing and able to purchase the property at terms satisfactory to the seller. Sork v. Rand, 422 Pa. 512, 222 A.2d 890 (1966); Simon v. H.K. Porter Co., 407 Pa. 359, 180 A.2d 227 (1962); Zitzelberger v. Salvatore, 312 Pa.Super. 402, 458 A.2d 1021 (1983). Further, the trial court properly instructed the jurors that the appellees could prevail even if the jury found that the Wagners did not have an enforceable contract with the appellants.

However, the court also instructed the jurors as follows:

And if you find from the facts that you heard that that’s a correct statement, then you would be justified in finding for the Plaintiffs, the Wagners. And I think it would automatically follow from that that you would also find in favor of the Plaintiff Kline, because if he had valid binding contract, then obviously he’s found a buyer that’s ready willing and able. Of course, the terms have to be acceptable to the sellers because he would have already found that they were acceptable. So if you accept that testimony of Mr. Kline, you would find, I think in favor of both the Plaintiffs. N.T., p. 228.

While this instruction is not erroneous on its face, it was, in light of the specific facts of this case, erroneous upon application.

Instantly, there were two interrelated but independent theories upon which the appellees could prevail. First, the jury could find that the Wagners and the appellants had entered into a binding contract for the sale of the stock of the corporation, and, therefore, the appellees would automatically be entitled to a commission. Second, the jury could find that the appellees presented the appellants with buyers ready, willing and able to purchase the property at terms acceptable to the appellants, and, therefore, the appellees are entitled to a commission, regardless of whether a sale of the property actually resulted.

Therein, the problem lies. The lower court, as evidenced by its granting of judgment n.o.v. against the Wagners, admittedly erred when it allowed the admission of parol evidence in the Wagners’ case. Thus, the jury decided in favor of the Wagners based upon inadmissible evidence when, in fact, the Wagners could not prevail under the law. Since the trial court instructed the jury that if it found in favor of the Wagners, “it would automatically follow ... that you would also find in favor of Plaintiff Kline ...”, it is entirely possible that the jury never reached the independent question of whether Kline presented the appellants with a buyer ready, willing and able to purchase the property at acceptable terms.

The case of Weinstein v. Philadelphia Transportation Company, 222 Pa.Super. 448, 295 A.2d 111 (1972), is analogous to the case at bar. In Weinstein, the appellant, Mark Weinstein, appealed from the denial of his motions for a new trial and for judgment n.o.v., following a jury verdict in favor of the defendants. Mark was allegedly injured when the car in which he was a passenger was struck from the rear by a Philadelphia Transportation Company bus. The bus company and the driver of the vehicle were named as defendants; each defendant blamed the accident upon the other’s negligence. The appellant requested the following jury instruction: ,

5. If you find that Mark was injured in this accident, I direct that you find in favor of him and his father and then the only questions will be the amount of damages to be awarded to them and whether the bus driver or Mr. Forney or both were negligent.

The court refused to issue the charge and, rather, instructed the jury that “if the plaintiff fails to meet his burden of proof of the negligence of either the defendant or the additional defendant, or both, your verdict must be in favor of the additional defendant.” We found the court’s instruction to be erroneous in light of our Supreme Court’s holding in Salvio v. Musgrave, 419 Pa. 346, 214 A.2d 226 (1965), since no evidence was presented which would exonerate both defendants.

Having found that the jury instruction was erroneous and recognizing that the appellant had requested a special verdiet or interrogatories which if given would have eliminated any confusion, we remanded the case for a new trial, reasoning:

... There is no way of knowing whether the jury premised its verdict on a finding of no negligence by either appellee, which the court erroneously charged them they could, or whether their verdict was based on their finding that appellant had failed to prove any damages from the accident, which would make the improper charge on negligence harmless error.
The reason we cannot make the above determination is that the trial judge compounded his error in charging the jury by refusing appellant’s request for a special verdict or special interrogatories for this purpose.
* * * # * *
... Where there are two possible theories on which the jury may have decided the case, one of which was erroneous, the denial of this request constitutes reversible error.

Weinstein, 295 A.2d at 114. See also Connelly Containers, Inc. v. Pennsylvania Railroad, 222 Pa.Super. 7, 292 A.2d 528 (1972).

Instantly, we too must find that the trial court committed reversible error by refusing the appellants’ request for interrogatories. The jury sub judice was presented with two theories upon which the appellees could recover, and, as previously discussed, one of the theories was premised upon trial court error. Since the trial court refused the appellants’ requested special interrogatories, we cannot determine whether the jury’s decision was based upon the valid theory — the appellees presented a ready, willing and able buyer to the appellants — or the erroneous theory — a verdict in favor of the Wagners (a legal impossibility) mandated a verdict in favor of the appellees. Consequently, we are compelled to find that the trial court committed reversible error, and we must remand this action for a new trial to determine whether the appellees presented the appellants with buyers who were ready, willing and able to purchase the property at terms satisfactory to the appellants.

Reversed and remanded for a new trial in accordance with this opinion.

      . Upon appellants’ motion, judgment n.o.v. was entered against John and Mary Wagner following a jury verdict in their favor. Although discussion of the Wagners’ claim is necessary for a full understanding of this appeal, the Wagners’ suit is not the subject of this appeal.

      . In addition, the appellants question: 1) Whether the trial judge erred when he allowed parol evidence to prove the writing satisfied the statute of frauds and instructed the jury that a finding of a valid contract between the appellants and the Wagners mandated a finding in favor of the appellees; 2) Whether the verdict was against the weight of the evidence; and 3) Whether the verdicts in the consolidated cases are inconsistent and should not be allowed to stand. Since we remand this case for a new trial based upon the court’s failure to present the jury with the appellants’ special interrogatories, we need not address these issues.


source: Caselaw Access Project

author: TAMILIA, Judge:

license: Public Domain

text:
    563 A.2d 118
    FEDERAL KEMPER INSURANCE COMPANY v. Jerry L. DERR and Theresa A. Derr, his Wife, Gary Wayne Hanna and Edward A. Gappa, Administrator of the Estate of Deborah L. Gappa. Appeal of Jerry L. DERR and Theresa A. Derr. (Two Cases) Appeal of Edward A. GAPPA, Administrator of the Estate of Deborah L. Gappa, Deceased.
    Superior Court of Pennsylvania.
    Argued March 30, 1989.
    Filed Aug. 7, 1989.

      Michael Dennehy, Philadelphia, for appellants at No. 2287.
    Scott A. Bennett, Philadelphia, for appellant at No. 2395. David C. Dickson, Jr., Berwick, for Federal Kemper, appellee.
    Before MONTEMURO, TAMILIA and MONTGOMERY, JJ.
   TAMILIA, Judge:

This matter involves consolidated appeals. On February 26, 1985, appellee Federal Kemper Insurance Company (Federal Kemper), with whom the appellants, Derrs, had a homeowner policy, brought an action seeking a declaratory judgment to determine that the Derrs and one Gary Hanna were not entitled to any coverage under the policy and that it had no duty to defend those parties in the action brought by the estate of Deborah Gappa, deceased. The facts, as stated by the trial court in its Opinion, are as follows:

On August 14, 1982, Gary Wayne Hanna, while operating an all-terrain vehicle owned by Jerry L. Derr, struck one Deborah Gappa, allegedly causing her personal injuries and ultimately her death by suicide.
At the time of the incident, Deborah Gappa was walking along a private road leading to a 10 acre tract of land owned by Jerry L. and Theresa Derr, located in the Roaring Creek Forest Preserve in Roaring Creek Township, Columbia County, Pennsylvania. The Derrs admittedly gave Hanna permission to operate the all-terrain vehicle.[]
The private road upon which the incident occurred is the only means of ingress or egress to the Derr land, and likewise serves about ninety (90) other adjoining land owners in the Forest Preserve, all of whom possess an easement for access purposes over the roadway in question.
Roaring Creek Forest Preserve, Inc., a corporation consisting primarily of the aforesaid land owners, initially obtained an easement over the private road from a predecessor in interest, who had acquired it from one A1 Tomcavage in exchange for a 10 acre lot in the Forest Preserve. All ninety (90) land owners in the Forest Preserve were granted easements over the private road in their respective deeds. The owners in turn annually contributed an equal amount to the Roaring Creek Forest Preserve Landowner’s Association to provide for the maintenance and repair of the said private road.
The Defendant Derrs for many years before and after the incident have utilized a camper on their lot as a weekend and summer-type retreat and part-time vacation residence. Their principal residence is elsewhere and not connected with the Forest Preserve in question.
The Estate of Deborah Gappa has instituted a separate suit against the Derrs for alleged negligence in allowing Gary Hanna to operate their all-terrain vehicle, thereby causing the aforementioned accident and allegedly Ms. Gappa’s subsequent suicide.

(Slip Op., Myers, J., 3/28/88, pp. 1-2.)

The complaint alleged, inter alia, that the location of the accident was not an “insured location” as defined by paragraph 4 of the “Definitions” portion of the policy, and coverage was, therefore, excluded. The parties stipulated prior to trial that any exclusion from coverage would arise from paragraph 4(b), 4(c), and/or 4(e) of the Definitions. (Slip Op. at 3; T.T. 10/16/87, p. 4.) Paragraph 4 reads in pertinent part:

4. “insured location” means:

a. the residence premises;
b. the part of any other premises, other structures, and grounds, used by you as a residence and which is shown in the Declarations or which is acquired by you during the policy period for your use as a residence;
c. any premises used by you in connection with the premises included in 4a or 4b;
e. vacant land owned by or rented to any insured other than farm land[.]

(Joint Exhibit # 2.)

On October 22, 1987, the trial court filed an Order granting Federal Kemper’s motion for summary judgment against Gary Hanna, and decreed that Hanna was not entitled to any coverage under the policy nor did Federal Kemper owe him a defense. After a non-jury trial, the trial court, on March 28, 1988, entered declaratory judgment in favor of Federal Kemper. Exceptions to that decision which were filed by both the Derrs and by the estate were denied on June 28, 1988. An appeal was filed by the estate on July 26,1988, and by Derrs on July 27, 1988. Judgment was then entered on October 21, 1988. The Estate of Gappa is the appellant at No. 02395 Philadelphia 1988, and the Derrs are the appellants at No. 02287 Philadelphia 1988. Both appellants argue the accident occurred on insured premises and the policy should have included coverage.

Our standard of review for an appeal from a declaratory judgment decision was recently set forth in Amica Mutual Insurance Company v. Donegal Mutual Insurance Company, 376 Pa.Super. 109, 545 A.2d 343 (1988). There, we stated:

In reviewing an adjudication in a non-jury proceeding, we must determine whether the trial court’s findings are supported by competent evidence and whether the trial court committed any error in any application of the law. Brenna v. Nationwide Insurance Co., 294 Pa.Super. 564, 440 A.2d 609 (1982). Any ambiguity in insurance policy terms must be construed in favor of the insured. State Farm Insurance Co. v. Bullock, 316 Pa. Super. 475, 483, 463 A.2d 463 (1983); Krager v. Foremost Insurance Co., 304 Pa.Super. 390, 450 A.2d 736 (1982).

Id., 376 Pa.Superior Ct. at 112, 545 A.2d at 345.

At No. 02395 Philadelphia 1988, the estate poses three issues that turn on whether or not the private road leading to the Derrs’ 10-acre parcel was an insured location. The estate first contends the accident occurred on the road over which all land owners in the Forest Preserve had an easement, that this road was an “insured location” under the terms of paragraph 4c of the policy, and that coverage should not have been excluded. As noted above, paragraph 4c provides that an “insured location” is “any premises used by [the insured] in connection with the premises included in 4a or 4b”. It is not argued that the Forest Preserve property falls under paragraph 4a as it is not “the residence premises”, thus we must examine paragraph 4b. That paragraph defines “insured location” as “the part of any other premises, other structures, and grounds, used by you as a residence and which is shown in the Declarations or which is acquired by you during the policy period for your use as a residence”. (Emphasis added.) The estate urges that the term “policy period” is not defined in the policy and that Pennsylvania case law offers no assistance in defining the term, pointing to two Louisiana state court opinions which we find to be neither binding upon this Court nor persuasive. Additionally, the estate contends the requirements of paragraph 4b are met because the Derrs acquired the Forest Preserve property in 1979 for use as a residence and that they did, in fact, use the premises as a residence on summer weekends and occasional non-summer weekends.

The trial court, in its Opinion of March 23, 1988, found the policy period here to be clear and unambiguous, extending from June 23, 1982 to June 23, 1983. Since the property was acquired in 1979, and not during the policy period during which the accident occurred, the court found the Forest Preserve property was not covered because the terms of paragraph 4b were not met. Upon an independent examination of the insurance policy (see Joint Exhibit # 2), which clearly states the policy period to be effective June 23, 1982 and to expire June 23, 1983, we find no error in the trial court’s conclusion that the Forest Preserve property, along with the easement, was not acquired by the Derrs during that time period, and that paragraphs 4b and, consequently, 4c do not apply to make the private road leading to the Forest Preserve property or the property itself an insured location under the policy. In substance the trial court correctly held unless the Forest Preserve property was shown in the declaration or was acquired during the policy period, it was not covered by the policy.

While our holding above is dispositive of this appeal, we will evaluate the other issues for the purpose of satisfying appellant that all matters were fully considered. We next examine the estate’s claim that the court erred in not finding the private road to be an “insured location” under paragraph 4e of the policy. As set forth above, paragraph 4e provides an “insured location” is “vacant land owned by or rented to any insured other than farm land”. The estate argues the term “vacant land” is undefined by the policy and is ambiguous. It posits that the private road on which the accident occurred is vacant land since no structures were erected upon it and the transitory presence of persons and vehicles upon the road does not render the road other than vacant, or else the homeowner’s provision for liability coverage of personal injuries occurring on vacant land would be meaningless. To support its claim that paragraph 4e applies, the estate argues the Derrs had an ownership interest in the easement and that interest was insurable.

The trial court in its Opinion agreed with appellants that the term “vacant land” is ambiguous, however, the court cited Standard Venetian Blind Co. v. American Empire Insurance Co., 503 Pa. 300, 469 A.2d 563 (1983), as authority for construing against the insurer only those ambiguities which fall into the scope of the parties’ intent regarding the insurance. Here, the court concluded there was no evidence the parties had intended to insure the private roadway, so that a conclusion that the term “vacant land” encompassed the private road would circumvent the intent of the parties as well as basic contract law principles. There was no ambiguity as to the meaning of the term as to these parties to the policy. As to the argument that the Derrs “owned” the easement for purposes of paragraph 4e, the trial court conceded they might have an ownership interest, but reasoned that all ninety lot owners are not individually responsible for insuring the easement, espedally since a real estate corporation exists, which assumed the responsibility for maintenance of the road. The road in this instance was a private road as to the plan but not as to any individual. As found by the trial court, Roaring Creek Forest Preserve, Inc., consisting primarily of the owners, acquired an easement over the roadway from a predecessor in title for access purposes and use by all of the property owners. As such, the road became dedicated to the public use of all property owners, not subject to individual control by any of them. By definition, dedicate means to appropriate and set apart one’s private property to public use; as to make a private way public by acts evincing an intention to do so. Black’s Law Dictionary, Fifth Edition. Whether by deed or by implication, this road is a public road as far as the plan is concerned, and may not be considered private property, part of the premises, or vacant property within the clear intent of the policy. The argument that the road is vacant property, or part of the premises, fails when it is clear that the property owners cannot control, alter or restrict the use of the road in any fashion, as it is dedicated to use as a roadway to all property owners. As such it is no more vacant than Grant Street in Pittsburgh, Market Street in Philadelphia, or the Pennsylvania Turnpike, are to adjacent property owners. Drusedum v. Guernaccini, 251 Pa.Super. 504, 380 A.2d 894 (1977).

We find no reason to disturb the decision of the trial court on this point even if we were to agree with him that the term was ambiguous. As was stated by our Supreme Court in Standard Venetian Blind, supra, a court, in interpreting an insurance contract, must ascertain the intent of the parties as manifested by the language of the written instrument. While it is generally the rule that ambiguities in a policy provision must be construed against the insurer as the drafter of the agreement, we agree with the trial court’s analysis of the situation, since to stretch the ambiguity in the term “vacant land owned by [the insured]” so far as to encompass an easement over a private road would in effect rewrite the contract of the parties. The policy does not extend coverage for any premises used by the insured in connection with the vacant land in the way paragraph 4c specifically includes coverage for premises used in connection with paragraph 4a or 4b (residence premises). As we reasoned in Neil v. Allstate Insurance Co., 379 Pa.Super. 299, 311-312, 549 A.2d 1304, 1310 (1988), to “rewrite” the policy, here by including in the definition of “vacant land” a private but dedicated road, “would disturb established principles of law regarding the rights and liabilities of parties who freely contract, and would place insurance companies in the impracticable situation of insuring losses which they have specifically not contemplated and for which they have not funded reserves.”

The cases cited by the estate in support of its position are not dispositive of the issue before this Court, as they are cited for the proposition that the owner of land to which an easement is appurtenant is obligated to third parties to keep the easement in good repair, and, here, we are not dealing with the state of repair of the easement. As a matter of fact, as found by the trial court, the corporation has assumed the obligation to maintain the road. In so far as these cases might suggest the Derrs had an insurable interest in the private road, they do not address the question of whether the Derrs’ policy with Federal Kemper did, in fact, extend such coverage.

We further reject the appellant-estate’s contention that the Derrs and Kemper intended to insure the Forest Preserve property as well as the private road because this contention is not borne out by the evidence. We also find the boundary dispute cases cited by the estate, which were handed down by courts whose decisions are not binding, totally unpersuasive and inapposite to the argument before this Court.

Finally, the estate raises in a footnote an argument that equitable considerations required the policy to be treated as extending coverage, based upon the representations of Kemper’s agent. As this matter was not raised in the statement of questions involved portion of its brief, we need not address the argument. See Pa.R.A.P. 2116; Williams v. Williams, 378 Pa.Super. 148, 540 A.2d 563 (1988); Rago v. Nace, 813 Pa.Super. 575, 460 A.2d 837 (1983). in any event, our review of the case leads us to conclude the allegation is without merit.

We next address the appeal of the Derrs at No. 02287 Philadelphia 1988. The Derrs raise two arguments which we have addressed above in our discussion of the appeal at No. 02395 Philadelphia, those being: 1) that the private road is an insured location, and 2) that the policy period ran from 1979 or 1980 to the date of the accident, and the court erred in determining the policy period ran from June 1982 to June 1983. As we have previously decided these issues, we need not address them a second time.

Next, the Derrs urge the negligence occurred not on the private roadway, as found by the court, but on the ten-acre land parcel on which the Derrs placed their mobile camper, which was an “insured location” since it was “vacant land”. The Derrs contend the act of negligence alleged in the complaint brought against them by the estate is that of negligent entrustment of the ATY, and such negligent entrustment, if in fact made, occurred on the ten-acre parcel. We agree with the determination of the trial court that the question of whether the Derrs were negligent in their entrustment of the ATV is not dispositive of the declaratory judgment action. (Slip Op., Myers, J., 6/28/88.) As is argued by the appellee, the policy at section II-e(2) clearly excludes coverage for personal liability and medical payments to others for their bodily injury or property damage which is arising out of the use of a motor vehicle owned by any insured, and appellants-Derrs are offering a strained argument to bring the negligence within the scope of their homeowner policy. With this determination, it is not necessary for us to decide on the merits of the Derrs’ argument that the appellee should be estopped by the representations of its agent that the vacant ten-acre property would be covered by the policy, since we are in agreement with the trial court’s decision that the accident did not occur on the parcel. We accordingly affirm judgment.

Judgment at No. 00214 of 1985, is affirmed as to both. appellants.

      . The Derrs, in their appeal, contest the court's conclusion that permission was admittedly given by them to Hanna for his operation of the ATV. The trial court notes in its Opinion dated June 28, 1988 that this statement was dicta and was not dispositive of the declaratory judgment action.

      . Notice of appeal was re-filed on August 8, 1988.

      . The estate concedes that the Forest Preserve property was not shown in the Declarations of the policy.

      . While this street is not "opened” or “dedicated” within the meaning of the Borough Code, 53 P.S. § 46724, the effect of the deeds, incorporation and use by the members of the plan, pursuant to deeds and contracts, creates the same public right to use as would acceptance by a municipality. Drusedum v. Guernaccini, 251 Pa.Super. 504, 380 A.2d 894 (1977) (allocatur denied), also see Riele v. Binnie, 352 Pa.Super. 246, 507 A.2d 865 (1986).


text:
    563 A.2d 123
    David H. SMITH, Individually and as Administrator of the Estate of Patricia Smith, Deceased, Appellant, v. Robert LINN, D.O., Lyle Stuart, Inc., Dixon-Shane, Inc., Howard Rosenfeld, M.D., Robard Corporation of Cherry Hill, N.J. v. HANCE BROTHERS and White Company Wilson Foods Corporation, Delare Associates, Inc., General Foods Corporation, U.S. Gelatin, Division of Peter Cooper Corporation.
    Superior Court of Pennsylvania.
    Argued March 30, 1989.
    Filed Aug. 7, 1989.

      Thomas B. Rutter, Philadelphia, for appellant.
    Albert B. Gerber, Philadelphia, for appellees.
    Before MONTEMURO, TAMILIA and MONTGOMERY, JJ.
   TAMILIA, Judge:

Appellant David H. Smith, individually and as administrator of the estate of Patricia Smith, deceased, appeals summary judgment granted September 30, 1988 in favor of appellee, Lyle Stuart, Inc. Patricia Smith died in July of 1977 allegedly as a result of the sudden onset of complications caused by a liquid protein diet which she was following, as set forth in a book entitled, When Everything Else Fails ... The Last Chance Diet.

The trial court Opinion explains the appellant brought an action seeking to recover for the death of the decedent against the publisher of the book, Lyle Stuart, Inc., appellee herein, as well as numerous other defendants. The matter was transferred from arbitration to Common Pleas Court by an April 11, 1979 Order of court. As a result of dismissals and settlements, Lyle Stuart, Inc., was the only defendant remaining in the case when it filed its motion for summary judgment on January 13, 1988. After entertaining oral argument on the motion, the Court en banc granted summary judgment. Appellant filed a notice of appeal on October 13, 1988.

The trial court states the factual history as follows.

Lyle Stuart initially met Robert Linn, D.O. in 1975 after Lyle Stuart read a magazine article about Dr. Linn’s liquid protein dietary program. Lyle Stuart used the diet to lose weight. Lyle Stuart, an experienced publisher, suggested to Dr. Linn that they do a book about the diet. An agreement was reached for Dr. Linn to author, and Lyle Stuart to publish, the book in March of 1976. The book was to be geared to the general public, as opposed to a medical type text.
When the book had gone to galley proofs, Lyle Stuart, president of Lyle Stuart, Inc., approached Dr. George Blackburn of Harvard Medical School, a leading researcher in the field of nutrition to review the book. Blackburn and Lyle Stuart met in June of 1976 to discuss Blackburn’s review of the book. Plaintiff contends that Blackburn’s proposals were not incorporated by Lyle Stuart into the book. Defendant contends any proposed changes were either made, if they were important, or they were essentially semantic in nature. The book was eventually published in a form essentially similar to the galley proof reviewed by Dr. Blackburn.
Patricia Smith purchased a copy of “The Last Chance Diet” in January of 1977. She followed the diet under the care of her physician, Howard Rosenfeld, M.D. She had lost over 100 pounds by June 1977 when she died from cardiac failure that plaintiff alleges was caused by decedent’s following the diet.

(Slip Op. at 3-5.)

On appeal appellant argues the trial court erred in basing its decision on the first amendment of the United States Constitution and thereby immunizing the appellee publishing company from civil liability for its publication. Instead, appellant urges the book is an incitement to immediate unreflecting action such as the action arising from shouting “Fire!” in a crowded theater, and as such, it should not have been accorded first amendment protection. Appellant argues this Court should reverse the decision of the trial court that the diet book publisher was within its first amendment right to freedom of speech, and find instead, for the first time, that a publisher is liable to a reader for negligent publication of a book which it published. Appellant further asserts that support for a rule of negligent publication can be derived from our Supreme Court’s decisions in Incollingo v. Ewing, 444 Pa. 263, 282 A.2d 206 (1971), and Robb v. Gylock Corp., 384 Pa. 209, 120 A.2d 174 (1956), as well as the Restatement of Torts, Second, particularly sections 388, 390, 310, 311, 557A and 402A.

In reviewing whether the trial court erred in granting summary judgment, we must apply the following standard of review:

A motion for summary judgment may properly be granted only “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” In passing upon a motion for summary judgment, the court must examine the record in the light most favorable to the nonmoving party. It is not part of the court’s function to decide issues of fact but solely to determine whether there is an issue of fact to be tried. Any doubt must be resolved against the moving party.
However, parties seeking to avoid the entry of summary judgment against them may not rest upon the averments contained in their pleadings. On the contrary, they are required to show, by depositions, the answers to interrogatories, admissions or affidavits, that there is a genuine issue for trial. Pa.R.C.P. 1035(d). The court, in ruling on a motion for summary judgment, must ignore controverted facts contained in the pleadings.

Loomis Lake Ass’n by Hughes v. Smith, 366 Pa.Super. 612, 619-20, 531 A.2d 1152, 1155-56 (1987) (citations omitted).

The trial court, in its Opinion, has set forth a thorough review of decisions of various jurisdictions in the United States, both state and federal, which have dealt with the issue of imposition of civil liability on a publisher for alleged “negligent publication”. Appellant does not contest that portion of the trial court Opinion but, rather, attacks the court’s determination that the diet book publisher here is protected by the first amendment. The appellant argues the decision of the United States Supreme Court in Gertz v. Robert Welch, Inc., 418 U.S. 323, 94 S.Ct. 2997, 41 L.Ed.2d 789 (1974), sets a precedent for us to balance the life and health of an individual against the greed of a publisher in knowingly publishing “a false and dangerous food diet book”. (Appellant’s brief at 32.) We derive no such precedent from that case. Further, appellant contends the Supreme Court’s decision in Dun & Bradstreet, Inc. v. Greenmoss Builders, Inc., 472 U.S. 749, 105 S.Ct. 2939, 86 L.Ed.2d 593 (1985), is supportive of his position. Again, we conclude that decision, which held that false statements in a credit report did not involve matters of public concern which would require a showing of actual malice to recover presumed and punitive damages, to be inapposite to his argument before this Court. Appellant does not attempt to explain his reasoning for relying on Dun, but merely cites it in his brief. Additionally, appellant argues we should draw an analogy to the decision in New York Times v. Sullivan, 376 U.S. 254, 84 S.Ct. 710, 11 L.Ed.2d 686 (1963), regarding libel of a public figure. We do not find it appropriate for this Court to do so. Finally, regarding appellant’s likening of the instant case to the shouting of “Fire!” in a crowded theater, and his assertion the diet book is therefore without first amendment protection, the analogy appears to be inapposite.

As appellant does not point us to any established exception to first amendment protection, we cannot find the court erred in finding publication of The Last Chance Diet to be protected under the first amendment.

Next, addressing appellant’s contention that sections 310, Conscious Misrepresentation Involving Risk of Physical Harm, 311, Negligent Misrepresentation Involving Risk of Physical Harm, and 557A, Fraudulent Misrepresentations Causing Physical Harm, of the Restatement of Torts apply to the instant facts, we agree with the trial court’s conclusion that nothing in those sections suggests they were intended to apply to publishers, nor would case law cited by appellant suggest those sections may be applied in such a way.

Appellant also urges Restatement of Torts, Second, sections 388, Chattel Known to be Dangerous for Intended Use, and 390, Chattel for Use by Person Known to be Incompetent, are applicable to impose civil damages on the publisher for the harm it caused to the decedent. Appellant contends Lyle Stuart, Inc., is as responsible as if he had directly sold the liquid protein to the decedent and concomitantly with the sale had supplied her with the book as a form of “package insert”. In this vein, appellant argues the Supreme Court decision in Incollingo, supra, which stated the drug manufacturer, Parke, Davis and Company, was required to accompany a prescription drug which it had marketed with a warning of its potentially dangerous side effects, to be given to the prescribing doctor. We reject the argument that these Restatement sections and Incollingo are controlling of the issue before us, as our review of sections 388 and 390 and Incollingo leads us to agree with the trial court’s ruling that they are not applicable under the facts of the instant case. Instructions by a manufacturer which accompany medication or use of certain marketed goods cannot be equated with publication of books which espouse a writer’s theory, opinions or ideology.

Lastly, we agree with the trial court’s rejection of appellant’s argument that the diet book is a product and was defective under the Restatement of Torts, Second, § 402A. As was observed by the trial court in its Opinion, no appellate court in any jurisdiction has held a book to be a product for purposes of section 402A; in fact, two courts have expressly refused to hold that a publication is a product. See Herceg v. Hustler Magazine, Inc., 565 F.Supp. 802 (S.D. Texas 1983) (refusing to find a publication to be a product within the meaning of section 402A); Cardozo v. True, 342 So.2d 1053 (Fla.Dist.Ct.App.1977) (distinguishing the tangible portion of the book, the binding and printing, which is a good, from the thoughts and ideas contained therein, which are not). Appellants also cite Kercsmar v. Pen Argyl Area School District, 1 Pa.D. & C.3d 1 (1976), for the proposition that the book is a product. Kercsmar, however, as was found by the trial court, is not dispositive of the instant action for several reasons. The Common Pleas Court of Northampton County in Kercsmar denied the preliminary objections of the publisher of a high school chemistry book which was alleged to have been followed by the minor plaintiff who was injured while conducting a high school chemistry experiment. The Northampton Common Pleas Court deemed the text book to be a good within the context of section 2-105(1) of the Uniform Commercial Code, and the averment of an injury caused by the description of the chemistry experiment contained in the text to be sufficient to meet the requisites of a breach of an implied warranty, so that the granting of a demurrer would be inappropriate. While Kercsmar does suggest at least that a trial court believed the contents of a book to be a good, as an appellate court, we may decline to accept that view. Further, as the trial court in the instant matter observed, no other court has followed the Kercsmar view. Additionally, we agree with the trial court that the cases cited by appellant as imposing liability under section 402A upon publishers of aviation and navigation charts is not akin to the problem involved herein, especially since no first amendment concerns are present in those eases. In those cases, extremely technical and detailed materials were involved, upon which a limited class of persons imposed absolute trust having reason to believe in their unqualified reliability. As such they took on the attributes of a product and are not protected by the first amendment. See Slip Op. at 28-29. With this decision that the book is not a product for purposes of section 402A, we need not address appellee’s argument regarding adequacy of warnings, nor appellant’s rebuttal to the warning issue, found in the reply brief of appellant.

Because we decide today the court properly granted summary judgment, we need not address the alternative argument raised by appellee and responded to by appellant in his reply brief that Lyle Stuart, Inc., is not the proper defendant-publisher since Bantam Books, Inc., published the paperback edition which was purchased by the decedent and appellee published the hard cover edition. We note, however, a review of the license agreement dated May 6, 1976 between Lyle Stuart, Inc., as licensor and Bantam Books, Inc., as licensee (see reply brief of appellant, exhibit 2) suggests appellant is correct in his assertion that Lyle Stuart, Inc., retained a degree of control over the paperback edition; indeed, during his deposition, Lyle Stuart admitted Bantam Books, Inc., could make no change to the text of the publication without his personal approval and authorization. (See Pre-trial Examination of Lyle Stuart, 9/16/82, p. 89).

As appellant has not persuaded this Court by any existing case law that its cause of action against Lyle Stuart, Inc., can withstand judicial scrutiny, in view of the first amendment right of the publisher to publish the diet book in question, we find no error on the part of the trial court in determining there was no genuine issue of material fact necessitating trial and in accordingly entering summary judgment.

We note the United States Supreme Court has recently upheld the first amendment right for one convicted under a state law for burning a United States flag during the 1984 Republican National Convention, an act denounced by our President and which offends many Americans’ sense of patriotism. Texas v. Johnson, — U.S. —, 109 S.Ct. 2533, 105 L.Ed.2d 342 (1989). Nevertheless, the Supreme Court found the first amendment guarantee of the individual’s freedom of expression prevails. Id. Also, it is evident that without scrupulous protection of the first amendment right by the courts, governments can oppress the people and in effect rewrite history when the people are suppressed in their expressions, as witnessed by recent events in China. Although we are moved by the grievous circumstances surrounding the instant case, we will not disturb the proper ruling of the trial court in granting summary judgment on the basis of the first amendment right of the publisher.

Order granting summary judgment affirmed.

      . The trial court notes the action was commenced by complaint under the Health Care Services Malpractice Act. See Slip Op., Vogel, P.J., 9/30/88, p. 2.

      . Appellant appears to be referring to the Opinion written by Mr. Justice Holmes in Schenck v. United States, 249 U.S. 47, 39 S.Ct. 247, 63 L.Ed. 470 (1919), although he offers this Court no case authority for his contention.

      . Although the trial court did not specifically address section 557A, we find the court’s reasoning, that nothing in the Restatement sections relied upon by appellant suggests their applicability to publishers of information, to apply to section 557A as well.


author: BECK, Judge:

text:
    563 A.2d 128
    REM COAL COMPANY, INC. v. CLARK EQUIPMENT COMPANY, t/d/b/a Michigan Loaders, and Anderson Equipment Company, a Pennsylvania Corporation, Appellant, v. APEX, INC. and Bridgeville Industrial Supply, Appellee.
    Superior Court of Pennsylvania.
    Argued Feb. 27, 1989.
    Filed Aug. 2, 1989.

      Arthur R. Gorr, Pittsburgh, for appellant.
    Dennis A. Watson, Pittsburgh, for REM Coal, appellee.
    Before CIRILLO, President Judge, and CAVANAUGH, BROSKY, McEWEN, OLSZEWSKI, BECK, TAMILIA, POPOVICH and JOHNSON, JJ.
   BECK, Judge:

This case presents the question of whether purely economic losses are recoverable in a product liability action between commercial enterprises and sounding in negligence and/or strict liability. We hold that they are not.

The relevant facts are not in dispute. Appellee REM Coal Company owned a front-end loader used in its strip mining business. On February 25, 1982 the loader caught fire and was severely damaged. REM instituted this action against Clark Equipment Company, the manufacturer of the loader, and against Anderson Equipment Company, the seller of the loader. Appellant Anderson later joined Apex, Inc., the manufacturer of the fire suppression system on the loader, and Bridgeville Industrial Supply, the seller of the fire suppression system.

REM’s complaint pleaded three theories: negligence, strict liability and breach of warranty. All parties concede that the complaint alleged only economic losses, i.e., the loss of the front-end loader itself. No personal injuries or damage to REM Coal’s property other than the loader itself were alleged.

At the close of the pleadings, appellants Clark and Anderson moved for summary judgment. On November 17, 1987 the trial court granted summary judgment against REM on the breach of warranty claim, holding that it was barred by the statute of limitations, but denied summary judgment on the negligence and strict liability claims. The trial court then certified the denial of summary judgment on the tort claims for immediate appeal, stating that the denial involved a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order would materially advance the ultimate termination of the matter. Permission to appeal was granted. Pa.R.A.P. 1301 et seq.

Summary judgment is appropriate when two basic requirements are fulfilled. There must be no genuine issue as to any material fact and the moving party must be entitled to judgment as a matter of law. Pa.R.C.P. 1035(b); Washington Federal Savings & Loan Assn. v. Stein, 357 Pa.Super. 286, 515 A.2d 980 (1986). Instantly, we need only determine whether the appellants have fulfilled the second requirement. Since all parties concede the material facts, our inquiry is only whether appellants are entitled to judgment as a matter of law.

At issue is the appropriateness of permitting recovery in tort where a product malfunctions because of an alleged defect in the product, causing damage to the product itself and consequential damages in the nature of costs of repair or replacement or lost profits, but the malfunction causes no personal injury and no injury to any other property of the plaintiff. Obviously, the question is not whether a plaintiff in such a case is entitled to a recovery at all, but rather whether a cause of action in tort, as opposed to one sounding solely in contract, is an appropriate vehicle for obtaining such a recovery.

Beginning in 1965 with the decision of the California Supreme Court in Seely v. White Motor Co., 63 Cal.2d 9, 403 P.2d 145, 45 Cal.Rptr. 17 (1965), the national trend has increasingly classified cases of this nature as sounding purely in contract. See, e.g., Lloyd Wood Coal Co. v. Clark Equipment Co., 543 So.2d 671 (Ala.1989); Superwood Corp. v. Siempelkamp Corp., 311 N.W.2d 159 (Minn.1981). The basic rationale employed by courts that have followed this trend is that the goals of tort theories of recovery are not implicated in a product malfunction case involving only economic losses. A contract action, on the other hand, is perfectly suited to providing an adequate remedy for such losses and recognizes the parties’ ability to structure their relative liabilities and expectations regarding the product’s performance by setting the terms of their contractual bargain.

The public policy that spawned tort recovery in the product liability context was a desire to provide protection of the public from unsafe products beyond that provided by contract law. Tort product liability theories impose responsibility on the supplier of a defective product whenever it causes personal injury or damage to other property because this is deemed to be the best way to allocate the risk of unsafe products and to encourage safer manufacture and design. Where a product malfunctions in a manner that does not cause damage outside of the product itself, many courts have found that this public policy is not involved because contract theories such as breach of warranty are specifically aimed at and perfectly suited to providing complete redress in cases involving such economic losses. All of such losses are based upon and flow from the purchaser’s loss of the benefit of his bargain and his disappointed expectations as to the product he purchased. Thus, the harm sought to be redressed is precisely that which a warranty action does redress. See Seely, supra; East River Steamship Corp. v. Transamerica Delaval, Inc., 476 U.S. 858, 106 S.Ct. 2295, 90 L.Ed.2d 865 (1986).

This issue has had a lengthy history, not only in decisions of courts across the country, but also in the decisions of this court and of the federal courts sitting in Pennsylvania. We begin with the pertinent decisions by two panels of this court: Industrial Uniform Rental Co., Inc. v. International Harvester Co., 317 Pa.Super. 65, 463 A.2d 1085 (1983), and Johnson v. General Motors Corp., 349 Pa.Super. 147, 502 A.2d 1317 (1986), allo, denied, 514 Pa. 639, 523 A.2d 346 (1987). In Industrial Uniform, the purchaser of certain trucks brought a Section 402A strict liability action against the manufacturer of the trucks. The damages alleged were the costs of repairing cracks in the frames of the trucks and the diminution of value in the trucks as a result of these structural deficiencies. The trial court had granted summary judgment for defendant on the ground that these damages were purely economic losses not appropriately recoverable in strict product liability.

On appeal, this court began with a review of the competing views on this issue. The seminal case representing the view that such damages were not recoverable was Seely, supra. The court quoted with approval from the Seely court’s explanation of the distinction between tort and contract remedies:

The distinction that the law has drawn between tort recovery for physical injuries and warranty recovery for economic loss is not arbitrary and does not rest on the “luck” of one plaintiff in having an accident causing physical injury. The distinction rests, rather, on an understanding of the nature of the responsibility a manufacturer must undertake in distributing his products. He can appropriately be held liable for physical injuries caused by defects by requiring his goods to match a standard of safety defined in terms of conditions that create unreasonable risks of harm. He cannot be held for the level of performance of his products in the consumer’s business unless he agrees that the product was designed to meet the consumer’s demands. A consumer should not be charged at the will of the manufacturer with bearing the risk of physical injury when he buys a product on the market. He can, however, be fairly charged with the risk that the product will not match his economic expectations unless the manufacturer agrees that it will. Even in actions for negligence, a manufacturer’s liability is limited to damages for physical injuries and there is no recovery for economic loss alone ... The Restatement of Torts similarly limits strict liability to physical harm to person or property.

Industrial Uniform, 317 Pa.Super. at 71, 463 A.2d at 1088 (quoting Seely, 63 Cal.2d at 18, 403 P.2d at 151, 45 Cal.Rptr. at 23).

In contrast, the Industrial Uniform court noted the divergent view of the Supreme Court of New Jersey expressed in Santor v. A. & M. Karagheusian, Inc., 44 N.J. 52, 207 A.2d 305 (1965), where the sole alleged damages were economic losses, i.e., a decrease in the value of defective carpeting purchased by plaintiff from the defendant manufacturer. In Santor, the court held that strict liability recovery was permissible even in a case involving purely economic loss because the manufacturer must bear all risks associated with placing defective products on the market, including the risk that the product itself does not perform up to the purchaser’s expectations. Id.

Having set forth these basic and diverging views, the Industrial Uniform court then looked to the decision of the Court of Appeals for the Third Circuit in Pennsylvania Glass Sand Corp. v. Caterpillar Tractor Co., 652 F.2d 1165 (3d Cir.1981), in which the Third Circuit had predicted Pennsylvania law on this issue. In Pennsylvania Glass Sand, the Third Circuit opined that the Pennsylvania Supreme Court, if confronted with this issue, would adopt an intermediary position which generally banned recovery for economic loss in tort, but which allowed such recovery where the product posed a risk of injury to the person or other property of the plaintiff. The court proposed a case-by-case analysis focusing on the nature of the defect, the type of risk posed by the defect, and the manner in which the damages occurred. The rationale underlying this view was the Third Circuit’s perception of a relevant distinction between pure economic loss, i.e. damages resulting from impaired quality of the product which are properly redressed in a warranty action, and economic loss occasioned by dangerously defective products. The Third Circuit opined that the latter is most appropriately addressed by tort product liability theories. 652 F.2d at 1173-74. Since the defect alleged in Pennsylvania Glass Sand was the lack of a fire suppression system on a front-end loader, and the damage to the loader occurred as a result of a sudden and calamitous fire that spread over the loader, the Third Circuit held that the alleged defect was a dangerous one and that plaintiff did have a cause of action in tort.

After consideration of the three views summarized above, the Industrial Uniform court formulated a rule that closely parallels the Pennsylvania Glass Sand position, as follows:

In an action between commercial enterprises, where defective design, manufacture and sale of a product is alleged, where there is nothing in the record to indicate that the defect is dangerous to persons or to property, and where the purported defect results in progressive deterioration of the product itself, the buyer’s cause of action for its economic losses against the seller is in breach of warranty under the U.C.C.

Industrial Uniform, 317 Pa.Super. at 79-80, 463 A.2d at 1093. Applying this rule to the facts under review, the Industrial Uniform court found that plaintiff had not stated a cause of action in tort because plaintiff alleged only a non-dangerous defect and a gradual deterioration of the product not involving any calamitous event. Id.

The decision in Industrial Uniform was shortly followed by Johnson v. General Motors Corp., 349 Pa.Super. 147, 502 A.2d 1317 (1986), allo, denied, 514 Pa. 639, 523 A.2d 346 (1987). In Johnson, the plaintiff class alleged that certain cars manufactured by defendant had defective transmissions that wore out prematurely. Plaintiffs sought recovery in both breach of warranty and negligence. The damages alleged were the costs of repairing the transmissions, as well as damages for plaintiffs’ alleged exposure to a risk of personal danger and damage to other property. The Johnson court determined that these allegations did not state a cause of action in tort under the Industrial Uniform standard because plaintiffs had alleged only that the transmissions prematurely wore out. They did not allege any unexpected occurrence resulting from the defect. The court found the allegations of a risk of such a dangerous occurrence to be speculative, stating that “[t]hose cases where an unexpected occurrence did occur, thus creating a real, not a risk of, danger to person or to property, are distinguishable.” Id. 349 Pa.Super. at 159, 502 A.2d at 1323.

The basic principles set forth in Industrial Uniform and Johnson have been consistently applied by Pennsylvania courts. For example, in Lupinski v. Heritage Homes, Ltd., 369 Pa.Super. 488, 535 A.2d 656 (1988), a homeowner sought recovery in strict liability for the decrease in market value of the home due to an infestation of insects in the wood used to build the home. The court held that recovery of such purely economic losses in strict liability was barred under Industrial Uniform and Johnson. Even though the warranty provisions of the Uniform Commercial Code did not apply, the court nevertheless found the principles of Industrial Uniform and Johnson applicable because the homeowner’s proper remedy was in the common law of contract. Id., 369 Pa.Superior Ct. at 492, 535 A.2d at 658.

Were we to apply the law as set forth in Industrial Uniform, Johnson and Pennsylvania Glass Sand, we would likely conclude that the trial court here was correct in finding that appellee has stated a cause of action in tort. The occurrence giving rise to appellee’s damages is strikingly similar to the occurrence involved in Pennsylvania Glass Sand — a sudden fire in a frontend loader, allegedly resulting from dangerous defects in the loader and/or its fire suppression system, which ultimately caused extensive damage to the loader. Clearly, under the rationale of those cases, this type of event and defect would fall within the category of cases where a tort action would be appropriate.

We will not, however, cling to the standard of Industrial Uniform, Johnson and Pennsylvania Glass Sand. We find that they present an unworkable mechanism for dealing with this issue. Instead, we adopt the standard unanimously adopted by the Supreme Court in East River S.S. Corp. v. Transamerica Delaval, Inc., 476 U.S. 858, 106 S.Ct. 2295, 90 L.Ed.2d 865 (1986), under which recovery in tort is barred in product liability actions between commercial enterprises where the only damage alleged is to the product itself, whether or not the defect posed a risk of other damage or injury or manifested itself in a sudden and calamitous occurrence.

East River was an admiralty action arising out of alleged defects in the pressure turbines in a number of supertankers manufactured by defendant. Plaintiffs (charterers of the vessels) alleged that these defects had caused damage to the turbines themselves and sought recovery for the cost of repairing the turbines and loss of income. The trial court granted summary judgment to defendant on the ground that the losses alleged were not recoverable in tort and the court of appeals affirmed. Id. at 859-62, 106 S.Ct. at 2296-98.

In analyzing whether economic losses were recoverable in a tort product liability action, the Supreme Court looked to the three “land-based” approaches to the issue represented by Seely, Santor and Pennsylvania Glass Sand. In a unanimous decision, the Court rejected both the Santor view, which allows recovery in tort for all nature of economic losses, and the Pennsylvania Glass Sand view, wherein recovery is dependent on the nature of the defect and the risk it poses. The Court rejected the Santor view because of its concern for keeping “product liability and contract in separate spheres” and for maintaining “a realistic limitation on damages.” Id. at 871, 106 S.Ct. at 2302. The Court also rejected the Pennsylvania Glass Sand view because it found that resting determinations of recoverability on the degree of risk posed by a defective product established too indeterminate a standard for manufacturers to follow in structuring their business behavior. Id. at 870, 106 S.Ct. at 2301. The Court further opined:

Nor do we find persuasive a distinction that rests on the manner in which the product is injured. We realize that damage may be qualitative, occurring through gradual deterioration or internal breakage. Or it may be calamitous. But either way, since by definition no person or other property is damaged, the resulting loss is purely economic. Even when the harm to the product itself occurs through an abrupt, accident-like event, the resulting loss due to repair costs, decreased value, and lost profits is essentially the failure of the purchaser to receive the benefit of his bargain — traditionally, the core concern of contract law.

Id. (citations omitted).

Thus, the East River Court was persuaded that analyzing cases involving injury to the product alone solely under the law of contract was appropriate. The Court’s reasoning basically paralleled that of other courts that have adopted this view. First, tort law’s concern for the protection of the public is greatly reduced in such circumstances. Since consumers of the product can insure against the loss of the product and its use, there is no need to provide them with the special protection of tort remedies. Second, damage to the product is “most naturally understood as a warranty claim.” Id. at 872, 106 S.Ct. at 2302. Warranties aim at maintaining product value and quality, which is all a consumer loses when the product is defective in a manner that results only in economic losses. Finally, warranty law is suited to economic loss cases because in such cases, the parties have the opportunity to have set the terms of their agreement regarding product value and quality in advance. The manufacturer may provide limited warranties and reduce the price, or give full warranties at a higher cost. The customer has the ability to negotiate over the terms of the bargain. If the product does not perform according to the agreement, the consumer is made whole by contract damages as limited by the terms of the agreement. This limitation of liability is an entirely appropriate brake on the manufacturer’s liability in a case involving only the loss of the bargained for product. Id. at 873-74, 106 S.Ct. at 2303-04.

We are in complete accord with this reasoning. Pennsylvania’s breach of warranty law supplies a suitable framework for regulating and enforcing the expectations and obligations of the parties as to product performance. It provides a disappointed purchaser a complete remedy for loss of the product itself and of its use within the limits of the parties’ contractual understandings. See Uniform Commercial Code, 13 Pa.Cons.Stat.Ann. §§ 2601, 2607, 2608, 2711-2720 (1984). To impose tort liability in addition would certainly erode the important distinctions between tort and contractual theories, including their differing objectives.

We also concur in the Supreme Court’s rejection of the Industrial Uniform, Johnson and Pennsylvania Glass Sand standard. The standard adopted in those cases focusses attention on the nature of the risk posed by a product, despite the fact that in every case involving injury to the product alone, the risk has never materialized and the only actual harm is the type of harm that contract law was designed to redress. The proper focus is not on the type of risk, but on the actual harm for which plaintiff seeks recovery. Moreover, allowing a cause of action in tort where the nature of the risk posed by the product is the determinative factor invites and indeed forces courts to enter into a difficult line-drawing process that can only yield inconsistent results. When precisely could it be concluded that a defect posed an unreasonable risk where the risk never materialized? How much need a plaintiff plead to establish a sufficiently non-speculative risk to avoid a demurrer? Must plaintiff establish that an accident-like event occurred in order to recover, or would the imminence of such an event, narrowly avoided, be sufficient?

We note that the Third Circuit has also re-analyzed the Pennsylvania Glass Sand approach in light of the East River decision. It did so in a case governed by Pennsylvania law and involving facts remarkably similar to those presented by the instant case. In Aloe Coal Co. v. Clark Equipment Co., 816 F.2d 110 (3d Cir.), cert. denied, 484 U.S. 853, 108 S.Ct. 156, 98 L.Ed.2d 111 (1987), the purchaser of the same type of front-end loader involved here, manufactured by the same defendant, sued the manufacturer in breach of warranty, negligence and strict liability when the loader unexpectedly caught fire and was severely damaged. No other property was damaged, nor did personal injury result from the incident. The Third Circuit reviewed East River and concluded “that the United States Supreme Court’s analysis is so persuasive that it will be followed by Pennsylvania courts.” Id. at 117. Thus, the Third Circuit rejected the intermediary position of Pennsylvania Glass Sand in favor of the bright line test enunciated in East River. In applying East River to the facts before it, the court denied recovery in tort despite the calamitous nature of the event and potentially dangerous nature of the alleged defect. See also King v. Hilton-Davis, 855 F.2d 1047 (3d Cir.1988), cert. denied, — U.S. —, 109 S.Ct. 839, 102 L.Ed.2d 971 (1989) (In case governed by Pennsylvania law, East River analysis applies to tort product liability suit by purchaser of product against manufacturer of component part of product; where only the product purchased is damaged, there is no recovery in tort product liability); Lloyd Wood Co. v. Clark Equipment Co., 543 So.2d 671 (Ala.1989) (Supreme Court of Alabama adopts East River).

Since we too prefer the clearer standard of East River, we hold that negligence and strict liability theories do not apply in an action between commercial enterprises involving a product that malfunctions where the only resulting damage is to the product itself. To the extent that Industrial Uniform and Johnson suggest a contrary rule, they are overruled.

Applying this rule to the case sub judice, we conclude that REM Coal has not stated causes of action in negligence or strict liability. There are no allegations of damage outside of the loss of the product itself. REM Coal merely seeks to recover the loss of the benefit of its bargain. Thus, we reverse the trial court’s denial of appellants’ motions for summary judgment and remand to the trial court for entry of judgment for appellants on REM Coal’s tort causes of action.

Reversed and remanded. Jurisdiction relinquished.

      . REM Coal has not appealed the trial court's order regarding the warranty claim.

      . We begin our analysis of existing precedent with decisions of this court because the Supreme Court of Pennsylvania has not decided this question. In fact, we have located only one reference to the issue in Supreme Court precedent and that is found in dicta contained in a footnote to the opinion in Kassab v. Central Soya, 432 Pa. 217, 231 n. 7, 246 A.2d 848, 854 n. 7 (1968).
      Although Kassab involved a breach of warranty action only, the com! appended a footnote to its opinion in which it posed a hypothetical situation where a consumer of a gas range was injured when the range exploded. The court hypothesized that the range itself and the consumer’s kitchen were also damaged and stated that it saw no reason for excluding recovery of the damage to the range, the product itself, in a strict liability action. This statement of dicta was made at the very inception of strict liability law in Pennsylvania and in the context of a hypothetical situation, highly distinguishable from the instant case. Thus, we do not regard it as in any way indicative of the views of our present Supreme Court on the issue we decide today.

      . Although East River was an admiralty case which established principles of federal maritime law not binding on us, we nevertheless may and do find its analysis and conclusion persuasive.

      . Since the case sub judice involves a dispute between commercial enterprises, as did East River and Aloe Coal, we need not and do not decide any questions regarding disputes between non-commercial parties.

      . We also note that in two prior Superior Court opinions, Cornell Drilling Co. v. Ford Motor Co., 241 Pa.Super. 129, 359 A.2d 822 (1976), and MacDougall v. Ford Motor Co., 214 Pa.Super. 384, 257 A.2d 676 (1969), the court made evidentiary rulings which permitted Section 402A actions to proceed in cases where the only loss alleged appears to have been to the product itself. Although neither opinion discusses the issue in the instant case, to the extent those opinions impliedly suggest a rule contrary to the one announced herein, they are disapproved.


author: JOHNSON, Judge.

text:
    563 A.2d 134
    Louis A. COPPOLA and Dolores M. Coppola, his Wife v. INSURANCE PLACEMENT FACILITY OF PENNSYLVANIA. Appeal of Louis A. COPPOLA, Appellant.
    Superior Court of Pennsylvania.
    Argued April 25, 1989.
    Filed Aug. 1, 1989.

      Michael C. George, Pittsburgh, for appellant.
    Kathleen S. McAllister, Pittsburgh, for appellee.
    Before MONTEMURO, JOHNSON and CERCONE, JJ.
   JOHNSON, Judge.

Appellant Louis A. Coppola asks us to decide whether the cancellation of an insurance policy by an insured is effective on the date named by the insured in the cancellation notice, or whether the cancellation is effective only upon its receipt by the insurance company. Finding that cancellation by an insured is effective on the date that the insured intends to cancel, if such intent is clear and precise, and not on the date that the insurance company receives notice of cancellation, we affirm the judgment on the verdict in favor of appellee Insurance Placement Facility (IPF).

The following facts are not in dispute and have been stipulated by the parties. Appellant and his wife owned property at 1803 East Carson Street in Pittsburgh. A policy issued by the Insurance Placement Facility of Pennsylvania with a term running from November 18, 1981 through November 18, 1982 insured this property against loss by fire in the amount of $160,000.00. The policy contained the following cancellation clause, which is required by 40 Pa.C.S. § 636:

This policy shall be cancelled at any time at the request of the insured ... This policy may be cancelled at any time by this Company by giving to the insured a five days’ written notice of cancellation ...

On March 25, 1982 Coppola met with his insurance broker and obtained new fire insurance from the North River Fire Insurance Company with a policy limit of $350,000.00. At the same time Coppola executed a Cancellation Request Policy Release form to cancel his old policy, the language of which read as follows:

Release Statement. The undersigned agrees that: The above referenced policy is lost, destroyed or being retained. No claims of any type will be made against the Insurance Company under this policy for losses which occur after the date of cancellation shown above. Any premium adjustment will be made in accordance with the terms and conditions of the policy.

Louis Coppola signed the form and next to his signature affixed the date, March 25, 1982. The form was also hand-dated at the top in the appropriate blank which indicated that cancellation of the policy was to become effective on March 25, 1982 at 12:01 a.m. Coppola then sent this release to his own agent, the Andrew Rodgers Agency, on April 1, 1982, which in turn sent the form to the mortgagee in possession of the original policy, Sentinel Savings and Loan. The mortgagee returned the cancellation form and the original policy to the Andrew Rodgers Agency. IPF received the policy and cancellation from the agency on April 13, 1982. Return premiums were subsequently sent to the Coppolas based on a March 25 cancellation date.

On April 11, 1982 the Coppola property sustained substantial fire damage for which they collected $350,000.00 from the new North River fire insurance policy. Coppola also submitted the claim to IPF, believing that, regardless of when he intended to cancel the policy, the cancellation would not actually become effective until April 13, the date IPF received actual notice of the cancellation. The Insurance Placement Facility denied the claim because, in their view, the policy had been cancelled as of March 25. On April 7, 1983 the Coppolas filed a complaint against IPF alleging breach of contract for denial of the claim. A bench trial was held on November 13, 1986 before the Honorable Maurice Louik. The court found for IPF and against the Coppolas by Opinion and Order of December 10, 1987. Post-trial motions were filed and denied, and Louis Coppola appealed to this Court on August 12, 1988. Judgment on the verdict was entered on October 26, 1988.

The sole issue on appeal is:

Whether the trial court erred in determining, as a matter of law, that the policy in question was cancelled based solely upon the evidence of Appellant’s intention to cancel, without the trial court making a factual determination as to when the insurance carrier received notice of Appellant’s intention to cancel.

He asks us to resolve this issue of first impression by adopting a rule that cancellation of an insurance policy by an insured cannot be effective until the cancellation notice is actually received by the insurance company. Thus, Coppola asks us to award a new trial for the purpose of determining when notice of cancellation was effectively communicated to IPF. Although a few states, notably New York, adopt the view that actual receipt of notice is necessary to effect cancellation by the insured, see Russ Togs, Inc. v. Fidelity-Phenix Insurance Co., 36 A.D.2d 706, 319 N.Y.S.2d 1 (1971), aff'd, 32 N.Y.2d 628, 342 N.Y.S.2d 658, 295 N.E.2d 386 (1973), we choose, rather, to follow basic contract principles, public policy, and leading federal case-law and to reject Coppola’s position.

First, we recognize well-settled principles of insurance contract interpretation. While any ambiguities in an insurance contract will be resolved in favor of the insured, a court is required to give effect to clear and unambiguous language. Standard Venetian Blind Co. v. American Empire Insurance, 503 Pa. 300, 469 A.2d 563 (1983). To effect the cancellation of a policy, the conditions incident to the right to do so must be strictly complied with. Faramelli v. Potomac Ins. Co. of District of Columbia, 346 Pa. 228, 29 A.2d 674 (1943). When the insurer pleads cancellation as an affirmative defense, the burden is on the insurer to prove effective cancellation prior to loss. Moser Manufacturing Co. v. Donegal & Conoy Mutual Fire Ins. Co., 362 Pa. 110, 66 A.2d 581 (1949). The Pennsylvania Insurance Company Law, 40 P.S. § 636, sets forth a standard fire policy form. No other form may be used in this state. Nevertheless, an insurance policy is primarily a contract between the parties. That there is a standard, required form for this contract does not alter the policy’s status as an expression of the intent of the parties, Chauvin v. Superior Fire Insurance Co., 283 Pa. 397, 129 A. 326 (1925) but does aid our interpretation of the contract terms.

The Pennsylvania legislature requires that the following language be included in a fire insurance contract:

This policy shall be cancelled at any time at the request of the insured, in which case this Company shall, upon demand and surrender of this policy, refund the excess of paid premium above the customary short rates for the expired time. This policy may be cancelled at any time by this Company by giving to the insured a five days’ written notice of cancellation ... [and by either refunding the excess premium or notifying the insured that he will receive the excess premium].

40 P.S. § 636. The contract at issue here contains this clause verbatim. This clause is not ambiguous; the legislature has clearly treated cancellation by an insurer and cancellation by an insured differently. The legislature specifically requires that, when the insurance company cancels, it must notify the insured of its intent to cancel at least five days before the cancellation is intended to become effective. Without this notice requirement, the insured would be left without insurance coverage without his knowledge. The undesirable ramifications of this possibility need no elaboration. The public policy reasons for the notice requirement are compelling, and our courts have strictly construed notice in this context to mean actual receipt of notice by the insured. Campbell v. Royal Indemnity Company of New York, 256 Pa.Super. 312, 389 A.2d 1139 (1978).

When the insured cancels, however, the legislature imposes no notice requirement; the public policy rationale stated above simply does not apply. The insured who cancels a policy obviously knows that he no longer has the policy. There is no need for a safeguard to guarantee that he receive affirmative evidence of this. The legislature focuses on a different interest. Recognizing that the insured is entitled to the unused portion of his premium, the statute requires that the insurer refund this unearned premium, the premium for the time period starting with the cancellation date chosen by the insured and ending with the end of the policy period. The unearned premium unequivocally becomes a debt of the insurance company to the former insured. Hammonton Investment & Mortgage Company v. Empire Mutual Fire Insurance Co. Of Pennsylvania, 387 Pa. 382, 128 A.2d 73 (1956). There is no question that, for purposes of this refund, the cancellation date is the date that the insured himself designates as his intended cancellation date, even though paperwork may not be completed until long after this date.

Further, when the insured sends in a cancellation notice, he anticipates receiving his unearned premium refund for a period beginning on the date that he designates in the notice; the insurance contract specifically states that he will receive this refund. Therefore, he could not expect to reap the benefits of insurance coverage for a period for which his money will be refunded, a period for which he has not paid. The above contract language cannot be read as meaning that cancellation will become effective on the date the insured names for the purpose of reimbursement, but that it will become effective on the date of receipt by the company for the purpose of coverage.

Although this is an issue of first impression for the courts of this Commonwealth, Federal Court decisions offer guidance. First, these cases apply basic contract interpretation principles in order to ascertain how the insurance contract at issue is to be cancelled by the insured. Each of these cases interprets cancellation clause language identical to that in the present case. Most important, all these courts decide that the determinative factual consideration is whether the insured manifested a clear intent to cancel. None decide that receipt of notice by the insurance company is at all relevant to this determination.

Most instructive is Del Boring Tire Service v. Federal Emergency Management Agency, 496 F.Supp. 616 (W.D.Pa.1980). Del Boring Tire of Johnstown, Pennsylvania purchased flood insurance. However, before the policy became effective, the president of the company sent a notice of cancellation to the insurance agency on February 17, 1977 stating that they could not afford the insurance and that therefore they wished to cancel the policy. On March 8 the president of Del Boring completed the cancellation form and forwarded it to the insurer. The policy was sent to the insurance company on July 15. The cancellation was not processed until October 27. On July 20, Del Boring sustained severe flood damage.

Del Boring submitted an insurance claim which the insurance company denied on the grounds that the policy had been cancelled. Del Boring contended that the actual refund of the paid premiums was a condition precedent to cancellation and that therefore they could not have intended to cancel until this condition had been met. The Honorable Donald E. Ziegler of the Federal District Court for the Western District of Pennsylvania resolved the issue by construing the insurance contract. The court included the cancellation notice as part of the contract. The cancellation notice contained the language “this policy may be cancelled at any time at the request of the insured.” Concluding that the dispositive fact was whether the insured manifested a clear and precise intent to cancel, Palardy v. Canadian Universal Ins. Co., 360 F.2d 1007 (2d Cir.1966), the court found that the letter of February 17, submission of the cancellation forms and return of the policy taken together manifested a clear intent to cancel the policy.

The court placed no significance on any particular date; in fact, the court did not even take note of the date that the insurance company received notice of cancellation. Receipt of notice by the insurance company was simply not relevant to the court’s determination of whether the insured manifested an intent to cancel. The court concluded that Del Boring was not insured at the time of the flood.

In the present case, the trial court did not have to determine whether Coppola manifested a clear and precise intent to cancel as of March 25, 1982; Coppola stipulated this. As in Del Boring, the cancellation notice signed by Coppola constitutes part of the written agreement between the parties. The contract provided that the insured could cancel at any time, and Coppola completed a cancellation notice stating that he was cancelling his policy as of March 25,1982. Therefore, Coppola is bound by the agreement he signed. Standard Venetian Blind, supra. The only distinction between Del Boring and the present case is immaterial in light of the fact that Coppola stipulated that he intended to cancel as of March 25. In Del Boring, the insured himself surrendered the policy, which the court considered as an additional manifestation of intent to cancel. In the present case, the mortgagee bank and not Coppola had possession of the insurance policy, and so it was the mortgagee bank that surrendered the policy in response to its receipt of Coppola’s cancellation notice.

In Commercial Standard Insurance Co. v. Farmers Alliance Mutual Insurance Co., 385 F.2d 826 (10th Cir.1967), the court interpreted the identical cancellation language: “This policy shall be cancelled at any time at the request of the insured ...” The court wrote:

No action on the part of the insurance company was necessary to implement the request and consummate cancellation. If and when an insurance company receives an unequivocal request that a policy containing a provision such as [this one], be cancelled, the policy is effectively cancelled as of the date requested; neither the consent of, nor action by the insurer is necessary. Palardy v. Canadian Universal Ins. Co., 360 F.2d 1007 (2d Cir.1966).

Commercial Standard, 385 F.2d at 830 (emphasis a,dded). The Commercial Standard court then conducted its inquiry into whether various actions on the part of the insured constituted a clear and unequivocal intent to cancel as of the date named by the insured. Again, although receipt of the cancellation notice is necessary in order for the company to effectuate cancellation as of the date requested, the date of that receipt played no part in the court’s analysis. The court held that the insured intended to cancel as of the date named in the notice, that the insurance company received that notice, and that therefore the policy was can-celled as of the date designated in the notice.

In Palardy, supra, the case relied upon by both the Del Boring and the Commercial Standard courts, the court interpreted a cancellation clause that read: “the time of the surrender or the effective date and hour of cancellation stated in the notice shall become the end of the policy period.” The cancellation notice sent by the insured stated that the policy is cancelled “upon receipt [by you] of this notice.” Stressing the intent of the parties as manifested in the contract, the court held that the time of cancellation of the policy was the date the insurer received notice, because the notice specifically named the time of cancellation of the policy as the time the notice was received. See also Graves v. Republic Insurance Company, 516 F.Supp. 424 (E.D.Pa.1981), in which the court 1) applied the principles of contract interpretation and 2) the factual question to be resolved was whether the insured manifested an intent to cancel that was communicated to the insurer.

Aside from Russ Togs, supra, the New York case, the cases relied upon by Coppola from other jurisdictions do not support his position that a cancellation initiated by an insured should be effective only upon its receipt by the insurer. Rather, the courts in these cases employed the same analysis as did the federal courts in the above cases and interpreted the insurance contract terms in light of the facts of the case before them. In Franklin Life Insurance Company v. Winney, 469 S.W.2d 21 (Tex.Civ.App.1971), the contract of insurance specifically defined cancellation as a written request satisfactory to the company, filed at the company’s home office in Springfield, Illinois. Therefore, the court held, actual receipt by the company was an agreed upon contract term and was necessary to effect cancellation.

In Chauvin v. Highlands Insurance Company, 361 So.2d 1255 (La.Ct.App.1978), the insurance contract stated that the insured may cancel the policy by mailing a written notice stating when cancellation was to become effective, but the insured sent an undated letter of cancellation. Because the letter was undated, the court assigned the cancellation date as the date that the notice was received by the insurance agency. And last, in Pekin Insurance Company v. Bucy, 101 Ill.App.3d 178, 56 Ill.Dec. 758, 427 N.E.2d 1304 (1981), the insured telephoned his agent and requested cancellation, and the agent prepared and sent a cancellation notice on the same day. The court flatly rejected the insured’s contention that the cancellation was effective only upon receipt by the company but rather looked to the insurance contract. The contract stated that the insured can cancel by mailing written notice stating when thereafter cancellation shall be effective. The court concluded that the cancellation could be made effective as of the date designated in the notice of cancellation.

We conclude that Coppola has presented us with no reason to adopt a different rule than that which we derive from application of contract principles, public policy and selected caselaw. Coppola’s unequivocal intent to cancel as of March 25, 1982 is dispositive. Therefore, the insurance policy was cancelled as of March 25, 1982, and not on the date IPF received the notice. The Insurance Placement Facility properly denied Coppola’s claim because the policy was cancelled as of March 25, 1982 and the damage was sustained on April 10. Hence, we affirm the judgment entered against Coppola and for IPF.

Judgment affirmed.

      . The court did not determine the amount of damage sustained by the Coppolas. It was not clear from the record whether the policies covered actual damage, market value or replacement costs. Testimony on the latter two were given, but there was no testimony on the dollar value of actual damage. The Coppolas do not argue to this Court that their damage exceeded the 5350,000.00 which they received from their new policy.