Madison Const. Co. v. Harleysville Mut. Ins. Co.
| Decision Date | 20 June 1996 |
| Citation | 678 A.2d 802,451 Pa.Super. 136 |
| Parties | MADISON CONSTRUCTION COMPANY v. The HARLEYSVILLE MUTUAL INSURANCE COMPANY, and Nicholas Ezzi, Brian Murtaugh, Kelran Associates, Inc. and Euclid Chemical Company. Appeal of the HARLEYSVILLE MUTUAL INSURANCE COMPANY. |
| Court | Pennsylvania Superior Court |
William Salzer, Philadelphia, for appellant.
Alan Greenberg, Philadelphia, for appellee.
Lee M. Epstein, Philadelphia, amicus curiae.
Before McEWEN, President Judge, CAVANAUGH, J., CIRILLO, President Judge Emeritus, and DEL SOLE, BECK, TAMILIA, POPOVICH, JOHNSON and HUDOCK, JJ.
CIRILLO, President Judge Emeritus:
Harleysville Mutual Insurance Company (Harleysville) appeals from an order of the Court of Common Pleas of Chester County granting summary judgment in favor of appellee Madison Construction Company (Madison) and requiring Harleysville to defend and/or pay for the defense of a personal injury claim brought against Madison. We reverse.
Kelran Associates, Inc. (Kelran), a contractor performing construction work at the Boeing/Vertol Helicopters plant (Boeing or Boeing/Vertol), hired Madison, a subcontractor, to prepare concrete utility trenches as a part of its work for Boeing. After pouring the concrete, a Madison employee would add a curing agent, known by its tradename, "Eucocure" floor coat, 1 to the poured trench. This agent was applied to the concrete in an enclosed area known as a "construction envelope" which consisted of four sides of polyethylene sheeting erected within a Boeing building. Nicholas Ezzi (Ezzi), a machinist employed by Boeing/Vertol, brought the underlying personal injury action after he was injured within this enclosed area. Ezzi was asked to place a fan in the envelope in order to provide better ventilation from the pungent odor of the curing agent. Upon entering the work area with the fan, Ezzi was overcome by the fumes, became dizzy, and fell into a construction trench where he sustained various injuries.
At the time of Ezzi's accident, Madison was insured by Harleysville under a comprehensive general liability (CGL) policy. Part of this policy included a "pollution exclusion" provision. Harleysville informed Madison that it would not provide coverage for the lawsuit, claiming that Ezzi's accident was excluded by this policy provision. Specifically, Harleysville contended that because Ezzi sustained injuries "as an approximate result of his inhalation of Xylene fumes [from the floor coating]," the circumstances surrounding the accident fell within the policy's pollution exclusion provision.
Madison subsequently instituted a declaratory judgment action in order to determine whether Harleysville was, in fact, contractually obligated to defend Madison. The parties filed cross-motions for summary judgment and the court granted Madison's motion. 2 Harleysville then appealed to this court, and, in an opinion authored by the Honorable Peter Paul Olszewski, the panel construed the contract in favor of Madison and affirmed the trial court's order. 3 Harleysville then petitioned this court for reargument en banc. Harleysville raises the following issues for en banc review:
(1) Whether the plain language of the "absolute" pollution exclusion of Harleysville's Commercial General Liability insurance policy unambiguously applies to negate a duty of defense or indemnification for a claim of damages for bodily injury alleged to have been caused by the release and migration of noxious fumes by the insured, Madison Construction Company; and
(2) Whether the existence of conflicting judicial authority in foreign jurisdictions establish ipso facto an ambiguity in the "absolute" pollution exclusion so as to confer insurance coverage for liability arising out of the release of noxious fumes notwithstanding the plain language of the insurance policy?
When we review the grant of a motion for summary judgment made under Pa.R.C.P. 1035, the appellate court's scope of review is well-settled: summary judgment is properly granted where "there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law." Pa.R.C.P. 1035(b). Summary judgment may be granted only where the right is clear and free from doubt. Musser v. Vilsmeier Auction Co. Inc., 522 Pa. 367, 369, 562 A.2d 279, 280 (1989). The moving party has the burden of proving that there is no genuine issue of material fact. Thompson Coal Co. v. Pike Coal Co., 488 Pa. 198, 412 A.2d 466 (1979). The record and any inferences therefrom must be viewed in the light most favorable to the nonmoving party, and any doubt must be resolved against the moving party. Davis v. Pennzoil, 438 Pa. 194, 264 A.2d 597 (1970). The trial court will be overturned on the entry of summary judgment only if there has been an error of law or a clear abuse of discretion. Hetrick v. Apollo Gas Co., 415 Pa.Super. 189, 608 A.2d 1074 (1992).
Harleysville claims that the pollution exclusion provision is not ambiguous and must be read strictly, so as to preclude its obligation to cover Madison in the underlying action. We agree.
Harleysville's CGL policy includes the following exclusionary language:
2. Exclusions.
* * *
This insurance does not apply to:
* * *
f. (1) "Bodily injury" ... arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of pollutants:
(a) At or from any premises, site, or location which is or was at any time owned or occupied by, or rented or loaned to, any insured;
* * *
(d) At or from any premises, site or location on which any insured or any contractors or subcontractors working directly or indirectly on any insured's behalf are performing operations:
(i) if the pollutants are brought on or to the premises, site or location in connection with such operations by such insured, contractor or subcontractor;
* * *
The term "pollutant" is defined in the policy as [A]ny solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste includes materials to be recycled, reconditioned or reclaimed.
Emphasis added.
The goal of interpreting an insurance policy is to "ascertain the intent of the parties as manifested by the language of the written instrument." Gene & Harvey Builders v. Pa. Mfrs. Ass'n, 512 Pa. 420, 426, 517 A.2d 910, 913 (1986) (citation omitted). Where a provision of a policy is ambiguous, the provision is to be construed in favor of the insured and against the insurer, the drafter of the policy. Id. When a provision of an insurance policy contains language which is clear and unambiguous, however, a court is required to give effect to that language. Standard Venetian Blind Co. v. American Empire Ins., 503 Pa. 300, 469 A.2d 563 (1983). In order to determine whether a term or language in a policy provision is ambiguous, the term or language must be considered in the context of the entire policy. Garber v. Travelers Ins. Companies, 280 Pa.Super. 323, 421 A.2d 744 (1980).
The seminal Pennsylvania Supreme Court case regarding the interpretation of contract language is Gianni v. Russell & Co., Inc., 281 Pa. 320, 126 A. 791 (1924). The Gianni court determined that an alleged oral agreement regarding an exclusive right to sell beverages under a tenant-lessee contract would not be upheld when the written contract did not evidence such a stipulation, as "the writing [was] not only the best, but the only evidence of [the parties'] agreement." Id. (emphasis added). Similarly, in Standard Venetian Blind, supra, despite the insured's lack of knowledge and/or understanding of an exclusion clause in an insurance liability policy, the court held that because the clause was clearly drafted, it was enforceable and effective to preclude coverage for the insured. Id. (emphasis added). Furthermore, this court has reiterated that:
[A]n insurer may draft a policy with explicit exclusions and the Court will uphold the plain meaning of the exclusions since a policyholder cannot reasonably expect unlimited coverage in the face of an explicit, unambiguous limitation.
Huffman v. Aetna Life & Cas. Co., 337 Pa.Super. 274, 282, 486 A.2d 1330, 1334 (1984) (emphasis added).
It is important to distinguish the Harleysville-Madison exclusionary provision from pollution exclusion provisions found in many other insurance policies. Other provisions often contain the language "into the atmosphere" when describing the area into which a pollutant must escape so that the exclusion applies. Such language, when given its technical effect, will most likely preclude insurance companies from denying coverage for accidents occurring within a confined area because such an occurrence does not result in the release of pollutants "into the atmosphere." See generally Gamble Farm Inn, Inc. v. Selective Ins. Co., 440 Pa.Super. 501, 656 A.2d 142 (1995) (). Additionally, many courts have held this term to be ambiguous, and the exclusion inapplicable, thus resulting in a verdict against the insurer. Id.
Many of these same policies also contain provisions which carve out an exception in applying the pollution exclusion when the manner in which the pollutants are emitted is "sudden and accidental." See Lower Paxton Township v. U.S. Fidelity and Guaranty Co., 383 Pa.Super. 558, 557 A.2d 393 (1989) (). Careful review of the present policy at...
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