Foremost Ins. Co. v. Nosam, LLC

• Decision Date: 05 November 2018
• Docket Number: No. 5:17-cv-02843,5:17-cv-02843
• Citation: 343 F.Supp.3d 448
• Parties: FOREMOST INSURANCE COMPANY, Plaintiff, v. NOSAM, LLC; Cathy Kopicz; Gina Sylvestre; Jeffrey LeBrun; and Barbara LeBrun, Defendants.
• Court: U.S. District Court — Eastern District of Pennsylvania

343 F.Supp.3d 448

FOREMOST INSURANCE COMPANY, Plaintiff,

v.NOSAM, LLC; Cathy Kopicz;¹ Gina Sylvestre; Jeffrey LeBrun; and Barbara LeBrun, Defendants.

No. 5:17-cv-02843

United States District Court, E.D. Pennsylvania.

Signed November 5, 2018

Eric R. Brown, Marshall Dennehey Warner Coleman & Goggin, Philadelphia, PA, for Plaintiff.

Larry W. Miller, Jr., Miller Law Group PLLC, West Lawn, PA, Jeffrey F. Parker, Lowenthal & Abrams, P.C., Bala Cynwyd, PA, for Defendants.

OPINION

Plaintiff's Motion for Summary Judgment, ECF No. 22 – Granted

Joseph F. Leeson, Jr., United States District Judge

This declaratory judgment action arises out of a personal injury complaint filed in the Berks County Court of Common Pleas, in which it is alleged that Gina Sylvestre, Barbara LeBrun, and Jeffrey LeBrun suffered carbon monoxide poisoning at their residence due to the negligence of Nosam, LLC, the owner and landlord of the property, for failing to ensure that the furnace was safe. Nosam sought a defense and indemnification from Foremost Insurance Company pursuant to its insurance policy. Foremost seeks a declaration from this Court stating that it does not owe a duty to defend, nor a duty to indemnify, Nosam in the state court action based on a Pollution Exclusion in the Policy. Foremost has filed a Motion for Summary Judgment. For the reasons discussed herein, Foremost has no duty to defend or indemnify because the Pollutant Exclusion bars coverage.

I. FACTS²

In May 2017, Gina Sylvestre and her two children, Jeffrey and Barbara LeBrun ("the underlying plaintiffs"), sued Nosam³ in the Court of Common Pleas Berks County, Pennsylvania ("underlying action"). The complaint filed in the underlying action (the "underlying complaint") alleges the following facts: Nosam was the owner and landlord of a residential property at 151 West Douglass Street in Reading, Pennsylvania, which was occupied by the underlying plaintiffs. On December 9, 2015, Barbara LeBrun awoke from a nap feeling dizzy. She attempted to go to her mother's room, but collapsed. Barbara called to her brother Jeffery LeBrun, who found his sister at the foot of the stairs. Jeffery then checked on his mother Gina Sylvestre to find her unconscious. Jeffery drove them to the hospital, where all three were diagnosed as suffering carbon monoxide poisoning

. The underlying complaint alleges that it was determined that the furnace in the basement of the house, which was turned on earlier in the day due to cold weather, was emitting a dangerous amount of carbon monoxide and was unsafe to be used. In an amended complaint filed in the underlying action,⁴ it is alleged that the neighboring chimney collapsed and fell into the underlying plaintiffs' chimney. This allegedly caused a blockage in the heating apparatus at the underlying plaintiffs' residence, causing or contributing to the emission of carbon monoxide. The proper functioning of the furnace and heating apparatus is alleged to be the legal responsibility of Nosam.

Nosam had an insurance policy with Foremost for the premises at 151 West Douglass Street, which was in effect from April 20, 2015, through April 20, 2016. The Policy provides Nosam coverage "for damages because of bodily injury or property damage caused by an accident on [the] premises." Policy at 9, Sec. II(F), ECF No. 22-7. The Policy also contains the following exclusion: "We will not pay for bodily injury or property damage ... [a]rising out of the actual, alleged or threatened discharge, dispersal, release, escape of, or the ingestion, inhalation or absorption of pollutants." Policy at 10, Sec. II(F)(4), (G)(4) (hereinafter the "Pollutant Exclusion"). "Pollutant" is defined in the Policy to mean "any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals, metals, lead paint components and compounds, and waste.... However, irritants and contaminants released by an accidental fire on your premises are not a pollutant." Policy at 2, Definitions, ECF No. 22-6.

Nosam sought a defense and indemnification from Foremost under the Policy for the underlying action. Foremost thereafter filed the instant declaratory judgment action seeking a declaration from this Court that it has no duty to defend or indemnify Nosam based on the Pollutant Exclusion. Compl., ECF No. 1. Nosam answered, asserting that although the facts pled in the underlying lawsuit would fall under the Exclusion, such facts are contested and "some kind of a fire would make more logical sense." Nosam Answer ¶ 22, ECF No. 7. The underlying plaintiffs also answered, asserting that the Exclusion does not apply because the carbon monoxide was released by an accidental fire, which is an exception to the Exclusion. Sylvestre Answer ¶ 22, ECF No. 10.

Foremost has filed a Motion for Summary Judgment, arguing that the Pollutant Exclusion bars coverage, that there are no allegations in the underlying complaints of any fire, and that, regardless, there was no "accidental fire" as that term is used in the Policy. Mot., ECF No. 22. Nosam did not respond to the summary judgment motion. The underlying plaintiffs did respond in opposition to the motion, asserting that the Pollutant Exclusion does not apply because the carbon monoxide was released by an accidental fire. Resp., ECF No. 23. They allege that they were unaware the heating system had been improperly converted to gas and that the gas fire that was ignited when the furnace was turned on was unintended and unexpected, such that the carbon monoxide released was caused by an accidental fire.

In their response to Foremost's Motion for Summary Judgment, the underlying plaintiffs also present the work order/invoice and deposition testimony of Richard East, a contractor specializing in residential heating systems. See Invoice, Ex. C, ECF No. 23-6; East Dep., Ex. D, ECF No. 23-7. According to both, the heating system at 151 West Douglass Street had been converted from an oil heater to a gas heater. See Invoice; East Dep. 6:17-21, 7:19-22. However, no chimney liner was installed after the conversion to ensure that the chimney was the right size for the amount of heat produced, as is required. Id. at 8:21-24. Mr. East explained at his deposition how the heating system at 151 West Douglass Street works. See id. at 10:6 - 11:14. He stated: there is a mounted burner inside a sealed unit that releases natural gas when it senses that the pilot light is on. Id. at 11:4-14. The gas ignites, but because the unit is sealed, there are no exposed flames. Id. at 11:4-10. The excess gas goes up and out the chimney. Id. at 10:14-17. Mr. East testified that an oil heater burns hotter than a gas heater, and when a chimney is not sized properly, the condensation from excess gas will eat away at the brick and mortar and eventually fall in and collapse. Id. at 8:2-17. He testified that the burned gas produces carbon monoxide and that a chimney collapse could cause carbon monoxide to build up in a home. Id. at 11:19 - 12:15. Mr. East testified that an oiling burning system can also produce carbon monoxide. Id. at 12:16-19.

Foremost replied, arguing that the underlying plaintiffs improperly rely on evidence outside of the underlying complaints in contradiction of the four corners rule, and suggesting that their interpretation of an "accidental fire" is unreasonable. Reply, ECF No. 24.

II. STANDARDS OF REVIEW

A. Summary Judgment

Summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). A disputed fact is "material" if proof of its existence or nonexistence might affect the outcome of the case under applicable substantive law. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). An issue of material fact is "genuine" if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Id. at 257, 106 S.Ct. 2505.

The party moving for summary judgment bears the burden of showing the absence of a genuine issue as to any material fact. Celotex Corp. v. Catrett , 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Once such a showing has been made, the non-moving party must go beyond the pleadings with affidavits, depositions, answers to interrogatories or the like in order to demonstrate specific material facts which give rise to a genuine issue. Fed. R. Civ. P. 56(c) ; Celotex , 477 U.S. at 324, 106 S.Ct. 2548 ; Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (stating that the non-moving party "must do more than simply show that there is some metaphysical doubt as to the material facts"). The party opposing the motion must produce evidence to show the existence of every element essential to its case, which it bears the burden of proving at trial, because "a complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial." Celotex , 477 U.S. at 323, 106 S.Ct. 2548. The court must consider the evidence in the light most favorable to the non-moving party. Scott v. Harris , 550 U.S. 372, 378, 127 S.Ct. 1769, 167 L.Ed.2d 686 (2007).

B. Contract Interpretation-Pennsylvania Law

"An insurer's obligation to provide a defense for claims asserted against its insured is contractual, and the language of the policy will determine whether an insurer has a duty to defend." Colony Ins. Co. v. Mid-Atlantic Youth Servs. Corp. , 485 F. App'x 536, 538 (3d Cir. 2012). "Under Pennsylvania law, ‘the interpretation of a contract of insurance is a matter of law for the courts to decide.’ " Allstate Prop. & Cas. Ins. Co. v. Squires , 667 F.3d 388, 390-91 (3d Cir. 2012) (quoting Paylor v. Hartford Ins. Co. , 536 Pa. 583, 640 A.2d 1234, 1235 (1994) ). In interpreting an insurance contract, the court must ascertain the intent of the parties from...