Gamble Farm Inn, Inc. v. Selective Ins. Co.

• Decision Date: 21 April 1995
• Citation: 656 A.2d 142,440 Pa.Super. 501
• Parties: GAMBLE FARM INN, INC. v. SELECTIVE INSURANCE COMPANY, Larry Coploff, Mary Coploff, Ronald Drewery, Debra Drewery, Louis Winner, Rose Winner, Scott Hayes, Mrs. Maile Marshall, Tami Hershey and Michelle Zellers. Appeal of SELECTIVE INSURANCE COMPANY.
• Court: Pennsylvania Superior Court

Page 142

656 A.2d 142

440 Pa.Super. 501

GAMBLE FARM INN, INC. v. SELECTIVE INSURANCE COMPANY, Larry Coploff, Mary Coploff Ronald Drewery, Debra Drewery, Louis Winner, Rose Winner, Scott Hayes, Mrs. Maile Marshall, Tami Hershey and Michelle Zellers Appeal of SELECTIVE INSURANCE COMPANY.

Superior Court of Pennsylvania.

Argued Oct. 20, 1994.

Decided Feb. 14, 1995.

Reargument and Reconsideration Denied April 21, 1995.

Mitchell S. Pinsly, Philadelphia, for appellant.

Kristine L. Waltz, Williamsport, for Gamble Farm Inn, appellee.

Before BECK, HUDOCK and BROSKY, JJ.

BECK, Judge:

The issue is whether the "pollution exclusion" in a commercial Comprehensive General Liability insurance policy applies to deny coverage for damages arising out of the release of carbon monoxide within a restaurant when the restaurant's hot water heater malfunctioned. We hold that the pollution exclusion does not apply to the facts of this case, and therefore affirm the trial court's entry of summary judgment in favor of the insured restaurant.

The relevant facts are not in dispute. Appellant Selective Insurance Company issued a Comprehensive General Liability ("CGL") insurance policy to appellee Gamble Farm Inn, Inc., which operates a restaurant. The insurance policy provides coverage during the relevant time period for all "sums that the insured becomes legally obligated to pay as damages because of 'bodily injury' or 'property damage' " caused by an "occurrence." An "occurrence" is defined in the policy as "an accident, including continuous or repeated exposure to substantially the same general harmful conditions."

During the policy's effective period, animals (probably squirrels) deposited nuts into the flue of a hot water heater located on appellee's premises. As a result, the flue became clogged, the heater shut down, and certain gases or fumes were created. The fumes seeped through the floor between the basement and the dining area of the restaurant, and several patrons became ill and sought medical attention. Patrons have made claims against appellee for payment or reimbursement of medical expenses; to date, appellee has paid approximately $2,000.00 as a result of these claims. Additionally, some restaurant patrons have filed civil actions against appellee.

Just days after the incident, appellee submitted a general liability loss notice to appellant for coverage of the incident. Appellant denied coverage on the basis of the policy's "pollution exclusion." The exclusion provides:

The Company shall have no obligation under this policy (1) to investigate, settle or defend any claim or suit against any insured alleging actual or threatened injury or damage of any nature or kind to persons or property which arises out of or would not have occurred but for the pollution hazard; or (2) to pay any damages, judgments, settlements, losses, costs or expenses of any kind or nature that may be awarded or incurred by reason of such claim or suit or any such actual or threatened injury or damage; or (3) for any losses, costs or expenses arising out of any obligation, order, direction or request of or upon any insured, including but not limited to any governmental obligation, order, direction or request, to test for, monitor, clean up, remove, contain, treat, detoxify or neutralize irritants, contaminants or pollutants.

"Pollution hazard" means an actual exposure or threat of exposure to the corrosive, toxic or other harmful properties of any solid, liquid, gaseous or thermal pollutants, contaminants, irritants or toxic substances, including smoke, vapors, soot, fumes, acids or alkalis, and waste materials consisting of or containing any of the foregoing arising out of the discharge, dispersal or release or escape of any of the aforementioned irritants, contaminants or pollutants into or upon land, the atmosphere or any water course or body of water. Waste material includes any materials which are intended to be or have been recycled, reconditioned or reclaimed.

(emphasis supplied).

In its motion for summary judgment and its brief to this court, appellant argued that the pollution exclusion is "absolute" and unambiguous, and that the policy therefore cannot reasonably be interpreted to apply to the restaurant incident. Appellee asserts that the exclusion is ambiguous under the unique circumstances of this case, and that the policy should be construed in favor of the insured, to provide coverage. The trial court agreed with appellee, and granted its cross-motion for summary judgment.

Our review of the summary judgment decision is plenary. Briggs v. Erie Ins. Grp., 406 Pa.Super. 560, 594 A.2d 761 (1991). Judgment may be entered if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to a judgment as a matter of law. Pa.R.Civ.P. 1035(b).

Generally, the interpretation of insurance contracts is a question of law that properly may be decided by the court rather than a jury. Standard Venetian Blind Co. v. American Empire Ins. Co., 503 Pa. 300, 469 A.2d 563 (1983) (citing Gonzalez v. United States Steel Corp., 484 Pa. 277, 398 A.2d 1378 (1979)). Where a provision of a policy is ambiguous, the policy is to be construed in favor of the insured, who typically lacks bargaining leverage regarding the terms of the coverage, and against the insurer, the drafter of the agreement. Id. at 304-06, 469 A.2d at 566; Rusiski v. Pribonic, 511 Pa. 383, 515 A.2d 507 (1986). Where, however, the language of the contract is clear and unambiguous, a court is required to give effect to that language. Standard Venetian Blind, supra; Rusiski, supra.

The threshold determination of whether a writing is clear and unambiguous necessarily lies with the court. Hutchison v. Sunbeam Coal Corp., 513 Pa. 192, 519 A.2d 385 (1986). A contract is "ambiguous" where "it is reasonably susceptible of different constructions and capable of being understood in more than one sense." Id. at 201, 519 A.2d at 390. Ambiguous terms are subject to "more than one interpretation when applied to a particular set of facts." DiFabio v. Centaur Ins. Co., 366 Pa.Super. 590, 531 A.2d 1141, 1143 (1987); Techalloy Co. v. Reliance Ins. Co., 338 Pa.Super. 1, 487 A.2d 820, 823 (1984).

We examine the insurance contract to determine whether the language is ambiguous. ¹ Standard Venetian Blind, supra, instructs the court to examine the language of the policy itself. We conclude the policy language is ambiguous. The policy excludes coverage where the pollutant is discharged "into or upon land, the atmosphere or any water course or body of water" (emphasis supplied). The ambiguity in the policy arises from the meaning of the word "atmosphere."

Specifically, there is more than one reasonable definition of the term "atmosphere." If we define the term in its broadest, most all-encompassing sense, surely the air within the restaurant would be included, and appellant properly could deny coverage. Of course, several equally reasonable definitions can be found in the dictionary:

1. The mass or body of gases that surrounds the earth or any heavenly body. 2. The particular climatic condition of any place or region regarded as dependent on the air. 3. Any surrounding or pervasive element of influence: an atmosphere of gloom. 4. The prevailing tone of a poem, novel, painting, etc. 5. Colloq. An indefinable aura regarded as especially characteristic: This cafe has atmosphere. 6. Physics. A conventional unit of pressure....

Funk & Wagnalls, New Comprehensive International Dictionary of the English Language (1982). Webster's New World Dictionary of the American Language (1966) includes "the air in any given place" within its definition of "atmosphere."

The parties have not referred us to any binding decision which defines the term "atmosphere" as used in insurance policies, nor have we found any such cases through our own research. ² We may be guided, however, by the decisions of other jurisdictions which already have grappled with the issue. We are particularly persuaded, for example, by the recent decision of the Supreme Court of Minnesota in Board of Regents of the University of Minnesota v. Royal Insurance Co., 517 N.W.2d 888 (Minn.1994).

At issue in Board of Regents was an almost identical pollution exclusion, which applied to the discharge of "irritants, contaminants or pollutants into or upon land, the atmosphere, or any water course or body of water." 517 N.W.2d at 890. The subject damage occurred when the insured's fireproofing material installed inside a building released asbestos fibers within the building. Id. The insurer argued, inter alia, that the discharge of asbestos into the building's air was a discharge into the "atmosphere," and that therefore the pollution exclusion applied to deny coverage. The supreme court rejected this contention, and explained that "atmosphere" as used in the pollution exclusion reasonably may be defined more narrowly. ³

"Atmosphere" (in its ordinarily understood physical sense) is another name for "air," but--and this is what is important--it is air thought of as being in a particular place. We would not say that the atmosphere in a room is stuffy. We think of atmosphere as the air surrounding our planet, as when Hamlet spoke of "this most excellent canopy, the air." (Act II, scene ii.) So it is that we speak of releasing a balloon into the atmosphere but letting the air out of a tire. Our problem here is how the term "atmosphere" should be understood in a pollution exclusion.

This much is clear. The pollution exclusion is directed--at least it was initially--at claims involving the pollution of the natural environment. Thus the exclusion is worded broadly to encompass the natural resources of this planet in their natural setting, namely, land, the atmosphere, and bodies of water. It is less clear,...