In Renschler v. Pizano, 329 Pa. 249, 198 A. 33 (1938), the garnishee was an insurance company that initially refused to defend its policyholder in a personal injury suit arising out of a motor accident.
The judgment plaintiff obtained a verdict against the insured defendant.
The parties to the underlying action settled under suspicious circumstances that changed the nature of the action so that the injuries would be covered by insurance.
The plaintiff issued an attachment. The garnishee insurance company, which was aware of the suit and declined to defend, alleged fraud in the settlement of the underlying action, and appealed an Order of the Court of Common Pleas denying its application to reopen the judgment.
On appeal, the Supreme Court of Pennsylvania upheld the lower court's refusal to reopen the judgment, as well as the trial court's holding that the garnishee had an adequate defense in the attachment proceeding.
Although the discussion centers on the fact that an insurer without notice may contest a judgment such as this, the Pennsylvania Court emphasized that "the defense of fraud is always available to the indemnitor." Id., 329 Pa. at 254-55, 198 A. at 36.