Case Summary (G.R. No. 161417)
Factual Background
Rico J. Pablo acquired two insurance policies for his vehicle: a Compulsory Third Party Liability (CTPL) insurance from Stronghold and an Excess Cover from Malayan. Pablo's CTPL insurance has a liability limit of P100,000.00 effective from January 16, 2007 to January 16, 2010, and the excess coverage amounts to P200,000.00. The accident occurred in 2008 when Pablo's vehicle sideswiped a pedestrian who sustained injuries. Pablo incurred medical expenses amounting to P100,318.08 for the pedestrian's treatment and filed claims with both insurance providers. Stronghold's liability was calculated at P29,000.00 based on the schedule of indemnities, leaving an excess of P71,318.08, which Malayan allegedly should cover.
Ruling of the Insurance Commission
The Insurance Commission ruled in favor of Pablo in a resolution dated May 21, 2009, ordering Stronghold to pay P100,000.00 and Malayan P318.08. The Commission’s rationale was based on the case of Western Guaranty Corporation v. Court of Appeals, asserting that the schedule of indemnities should not limit reimbursement amounts as long as the total claims were within the coverage limits.
Court of Appeals Decision
The Court of Appeals, in its decision dated March 21, 2012, reversed the Insurance Commission’s ruling, finding that Stronghold could only be held liable as per the schedule of indemnities. The Court clarified that the limits in the schedule of indemnities needed to be upheld and that any excess should be the responsibility of Malayan. The Court determined the reimbursement amounts to be P42,714.83 for Stronghold and P57,603.25 for Malayan.
Arguments of Malayan
Malayan contested the appellate ruling, arguing that it contravened the ruling in Western Guaranty and the principles surrounding Excess Insurance Coverage. Malayan contended that its liability only arises after Stronghold’s liability limit of P100,000.00 has been exhausted. Additionally, Malayan raised issues regarding timing, claiming Stronghold's petition for review was belatedly filed.
Arguments of Stronghold
Stronghold supported the appellate court’s decision, arguing that its liability aligned with the amounts specified in the Schedule of Indemnities. It maintained that the ruling in Western Guaranty did not apply, claiming that GSIS was the controlling case, which restricts insurer liability to the agreed amounts in their insurance contracts.
Issue to Resolve
The main issue before the Court is the extent of liability of Stronghold according to the insurance policy and how it interacts with the excess liability coverage provided by Malayan.
Court's Ruling
The Court upheld the Court of Appeals’ decision, confirming that Stronghold is liable for the amount of P42,714.83, whi
...continue readingCase Syllabus (G.R. No. 161417)
Overview
- This case involves a Petition for Review on Certiorari filed by Malayan Insurance Company, Inc. (Malayan) challenging the March 21, 2012 Decision and August 13, 2012 Resolution of the Court of Appeals (CA).
- The CA's ruling reversed and set aside prior decisions of the Insurance Commission (IC) regarding the reimbursement obligations of Malayan and Stronghold Insurance Company, Inc. (Stronghold) to Rico J. Pablo.
Factual Antecedents
- Malayan is a corporation engaged in motor vehicle insurance, while Stronghold is involved in non-life insurance.
- The case began with a request from Rico J. Pablo to the IC on October 3, 2008, seeking assistance in determining reimbursement amounts from Malayan and Stronghold.
- Pablo held a Compulsory Third Party Liability (CTPL) insurance policy from Stronghold, covering his vehicle, a 2007 Mitsubishi Adventure, with a limit of P100,000.00.
- Additionally, he obtained an Excess Cover for Third Party Bodily and Death Liability from Malayan, amounting to P200,000.00.
- In 2008, while driving his vehicle, Pablo accidentally injured a pedestrian and incurred medical expenses totaling P100,318.08.
- Pablo filed claims for reimbursement with both insurance companies, which led to a dispute over liability and coverage amounts.
Ruling of the Insurance Commission
- On May 21, 2009, the IC ruled in favor of Malayan, ordering Stronghold to reimburse Pablo P100,000.00 and Malayan to pay only P318.08.
- The IC relied on the precedent set in Western Guaranty Corporation v. Court of Appeals, asserting that the Schedule of Indemnities in the CTPL policy should not limit the amount recoverable as long as the claims