Lancaster Area Refuse Authority v. Transamerica Ins. Co.

• Decision Date: 20 March 1969
• Citation: 251 A.2d 739,214 Pa.Super. 80
• Parties: LANCASTER AREA REFUSE AUTHORITY, Appellant, v. TRANSAMERICA INSURANCE COMPANY.
• Court: Pennsylvania Superior Court

Page 739

251 A.2d 739

214 Pa.Super. 80

LANCASTER AREA REFUSE AUTHORITY, Appellant, v. TRANSAMERICA INSURANCE COMPANY.

Superior Court of Pennsylvania.

March 20, 1969.

Petition for Allowance of Appeal Granted May 19, 1969.

John I. Hartman, Jr., Windolph, Burkholder & Hartman, Lancaster, for appellant.

B. M. Zimmerman, Zimmerman, Zimmerman, Myers & Gibbel, Lancaster, for appellee.

Before WRIGHT, P.J., and WATKINS, MONTGOMERY, JACOBS, HOFFMAN, SPAULDING, and HANNUM, JJ.

PER CURIAM.

Judgment affirmed.

HOFFMAN, Judge (dissenting).

Judgment against Lancaster Area Refuse Authority in the amount of $7951.90 was entered in favor of two property owners whose wells were polluted due to the Authority's negligence. The judgment was affirmed by our court in Reinhart v. Lancaster Area Refuse Authority, 201 Pa.Super. 614, 193 A.2d 670 (1963). The Authority is now seeking indemnification in the amount of the judgment from its insurance carrier.

At trial, the parties stipulated that 'at the time the losses occurred, for which verdicts (in favor of the two property owners) were rendered, (appellant) had in force an insurance policy with (appellee). * * * The insurance policy * * * provided in part * * * (that appellee would) pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of injury to or destruction of property, including the loss of use thereof, caused by accident. * * * If the damages in the above cases were 'caused by accident', then judgment should be entered for (appellant). * * * If the damages * * * were not 'caused by accident', then judgment should be entered for (appellant) against (appellee).'

The lower court found that the damages from appellant's conduct were not caused by an 'accident', as that word is used in the insurance policy and found for the appellee.

In this appeal, appellant attacks that finding.

The lower court based its decision upon our decision in Reinhart holding appellant liable to the two property owners.

The lower court wrote that 'it feels that the language of the Superior Court in the suit of Reinhart et al, Appellants v. Lancaster Area Refuse Authority, 201 Pa.Superior Ct. 614 (193 A.2d 670) (1963) clearly indicates that the damages to and pollution of the wells of (the two property owners) here were not the result of an accident.' Specifically, the court stated that 'we find the Superior Court saying in its conclusion in Reinhart as to (appellant's) failure to avoid the pollution of the wells as follows: '* * * Furthermore, they could have averted such results at little cost by placing these particularly devious and mischievous liquids elsewhere in the valley (they had 600 by 200 feet of area available). Therefore, the damage was avoidable. * * * ' (Emphasis supplied by lower court) If the damages were avoidable they were clearly in this court's judgment not the result of an accident as that term has been defined in numerous opinions in this State and elsewhere.' (Emphasis added.)

The lower court also stated that 'from * * * the fact that the Superior Court in Reinhart stated '* * * the damage was avoidable' the pollution involved in this case was clearly forseeable and avoidable, which terms are the landmark language by which 'accident' and 'occurrence' are differentiated and the expected and forseeable occurrence herein involved is not an accident within the meaning of the insurance policy.'

It is apparent that the lower court thought the adjudication of appellant's negligence in Reinhart was dispositive of the instant case. It held, therefore, inferentially, that if an insured is negligent and incurs liability as a result of such negligence, he cannot be indemnified by his insurance carrier who has contracted to reimburse him only for loss 'caused by accident.'

Such a reading, in my view, misconstrues the intent of the parties to the insurance contract.

The term 'accident' as used in insurance policies has been defined by our Supreme Court as follows: 'An accident, simply stated, is merely an unanticipated event; it is something which occurs not as the result of natural routine but as the culmination of forces working without design, coordination or plan.' Brenneman v. St. Paul F. & M. Ins. Co., 411 Pa. 409, 413, 192 A.2d 745, 747 (1963). Applying Pennsylvania law, the Federal District Court for the Eastern District of Pennsylvania stated that 'Pennsylvania recognizes that accident (as used in an insurance policy) includes negligence.' Moffat v. Metropolitan Cas. Ins. Co. of N.Y., 238 F.Supp. 165 (D.C.1964). Therefore, the insured in that case, although liable to adjacent landowners for damage to their property resulting from his negligent stacking of culm banks (piles of mining wastes) which emitted noxious gas, was allowed to recover from his insurance carrier. As in the instant case, the insured followed the custom of his trade, although he proceeded to do so in a negligent manner.

In reaching its decision, the District Court relied on language in Dilks v. Flohr Chevrolet, 411 Pa. 425, 192 A.2d 682 (1963), which, although construing the term 'accidental fire' in a lease context, is applicable to the instant case. 'Over 100 years ago * * * this Court in McCarty et al. v. New York & Erie Railroad Company, 30 Pa. 247, 250, 251, considered whether 'accidental fire' included fires of negligent as well as non-negligent origin. * * * The Court said: 'If accident and negligence be not opposites, we cannot regard them as identical, without confounding cause and effect. Accident, and its synonyms casualty and misfortune, May proceed (or result) from negligence or other cause known, or unknown.' * * * (Emphasis in Moffat). * * * The court below was correct in holding that an 'accidental fire' included fires of negligent as well as non-negligent origin.'

Thus, in Moffat, the Court held 'That Moffat knew or should have known that the banks could oxidize and give off products which would cause harmful effects to property in view of the high probability of circulation by atmospheric means does not spell out conduct calculated to cause substantial damage. * * * It is clear (that the damage) * * * is not excluded from accident coverage on a liability policy.'

Similarly, in a lease context, where the lessee was required to pay for damage to the premises unless 'caused by accident', the Third Circuit concluded, after analyzing the Pennsylvania cases, that '* * * 'accident' is a word of broad scope and includes many unfortunate occurrences not anticipated in the ordinary course of affairs. The wilful act is not embraced by the word, but the negligently caused happening is understood to be an 'accident. " Hardwick Mutual Ins. Co. of Minn. v. C. A. Snyder, Inc., 242 F.2d 64, 68 (1957). See also Robert Hawthorne, Inc. v. Liberty Mutual Insurance Co., 150 F.Supp. 829 (1957 D.C.E.D. of Pa.), affd. 3 Cir., 251 F.2d 343; 7 A.L.R.3d 1262, Note, Liability Insurance: 'Accident or Accidental' as Including Loss Resulting from...