Wagner v. Erie Ins. Co.

• Decision Date: 22 May 2002
• Citation: 801 A.2d 1226,2002 Pa. Super. 166
• Parties: Thomas F. WAGNER, Individually and Trading as Blue Bell Gulf v. ERIE INSURANCE COMPANY, Appellant.
• Court: Pennsylvania Superior Court

801 A.2d 1226

2002 Pa. Super. 166

Thomas F. WAGNER, Individually and Trading as Blue Bell Gulf v. ERIE INSURANCE COMPANY, Appellant.

Superior Court of Pennsylvania.

Argued December 4, 2001.

Filed May 22, 2002.

Reargument Denied August 1, 2002.

Elit R. Felix, II, Philadelphia, for appellant.

John Mattioni, Philadelphia, for appellee.

BEFORE: DEL SOLE, P.J., and FORD ELLIOTT and BECK, JJ.

ELLIOTT, J.

¶ 1 This appeal is the result of cross-motions for summary judgment filed after appellee Thomas Wagner, individually and trading as Blue Bell Gulf ("owner"), filed a complaint in declaratory judgment against Erie Insurance Company ("insurer") to determine his rights under two policies of insurance he purchased from insurer. The trial court, the Honorable William J. Manfredi, granted owner's motion for summary judgment and denied insurer's motion. For the reasons that follow, we vacate the order granting owner's motion and denying insurer's motion, and enter summary judgment for insurer. The relevant factual and procedural history of the case follows.

¶ 2 Owner owned a self-service gasoline station in May of 1998 when one or more parts of the super grade gasoline line broke, causing extensive damage from the underground leak both to owner's property and to neighboring properties. As a result, the Commonwealth of Pennsylvania brought administrative actions against owner, and numerous personal injury and property damage claims were filed against owner.

¶ 3 Owner had always maintained insurance policies on his service station, including coverage for his storage tanks. In 1989, Pennsylvania enacted the Storage Tank and Spill Prevention Act ("STSPA"), 35 P.S. §§ 6021.101-6021.2104, which included creation of the Underground Storage Tank Indemnification Fund ("USTIF"), 35 P.S. §§ 6021.704-708.¹ The purpose of the Fund was to make "payments to owners, operators and certified tank installers of underground storage tanks who incur liability for taking corrective action or for bodily injury or property damage caused by a sudden or nonsudden release from underground storage tanks and for making loans to owners as authorized by this act." 35 P.S. § 704.(a)(1), 1998, Jan. 30, P.L. 46, No. 13, § 3, imd. effective. Payments under the Fund are limited to the actual cost of cleanup and damages, not to exceed $1 million. 35 P.S. § 704(b)(1).

¶ 4 After the establishment of the USTIF, owner purchased two insurance policies from insurer, an "Ultraflex Package Policy," No. Q37-0152529 A ("primary policy"), the primary liability policy, and a Business Catastrophe Policy. No. Q25 0171083 A ("excess policy"). The Business Catastrophe policy functions as an excess liability policy, providing protection beyond that provided by the primary liability policy. According to owner, he believed, based on representations made by insurer's agent, that these policies would provide $2 million in coverage beyond the $1 million available under the USTIF for storage tank leaks, and would also provide the cost of defense of claims made as a result of such leaks. (Owner's complaint, 10/5/99 ("complaint") at ¶¶ 10-12; appellee's brief at 2.)

¶ 5 Following the May 8, 1998 underground gasoline line leak, owner therefore notified insurer of his losses and requested that insurer defend and indemnify him for those losses. By letter dated September 21, 1998, however, insurer notified owner that it would be unable to make any payments regarding owner's claim based on the absolute pollution exclusions contained in both policies. Those exclusions follow:

B. Coverages F and G

We do not cover under Bodily Injury Liability (Coverage F) and Property Damage Liability (Coverage G):

....

3. a. damages arising out of the actual, alleged or threatened discharge, dispersal, release or escape of pollutants:

1) at or from premises you own, rent or occupy:

....

b. any loss, cost or expense arising out of any:

1) request, demand or order that anyone we protect or others test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or in any way respond to, or assess the effects of, pollutants; or

2) claim or suit by or on behalf of a governmental authority for damages because of testing for, monitoring, cleaning up, removing, containing, treating, detoxifying or neutralizing, or in any way responding to, or assessing the effects of pollutants.

Primary policy at 25, complaint at exhibit 1, R.R. at 148a. The policy defines pollutants as:

`Pollutants' mean any 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.

Id. at 7, complaint at exhibit 1, R.R. at 130a. In addition, the excess policy provides:

WHAT WE DO NOT COVER—EXCLUSIONS

We do not cover:

....

19. injury or damage caused by, contributed to or arising out of the actual, alleged or threatened discharge, dispersal, release, or escape of smoke, vapors, soot, fumes, acids, alkalis, toxic chemicals, liquids or gases, waste materials or other irritants, pollutants or contaminants into or upon the land, the atmosphere or any course of or body of water, whether above or below ground.

It is understood and agreed that the intent and effect of this exclusion is to delete from any and all coverages afforded by this policy any loss caused by pollutants. Loss includes but is not limited to any claim, suit, action, judgment, liability, settlement, defense or expenses (including any loss, cost or expense arising out of any governmental direction or request that anyone we protect test for, monitor, clean up, remove, contain, treat, detoxify or neutralize pollutants) in any way arising out of such actual, alleged or threatened discharge, dispersal, release or escape, whether such loss results from the activities of anyone we protect or the activities of others, and whether or not such loss is accidental, intended, forseeable [sic], expected, fortuitous or inevitable, and wherever such loss occurs.

Excess policy at 5, 7, complaint at exhibit 1, R.R. at 422a, 424a (emphasis in original).

¶ 6 Having received notice that insurer would not cover owner's losses, owner filed a complaint on October 5, 1999, in which he asked the court to declare that insurer had a duty to defend and/or pay for the investigation and defense of claims brought against owner, and to declare that insurer had a duty to indemnify owner for his losses. Owner also brought two counts for breach of contract, one for failure to defend, and one for failure to indemnify owner. (Complaint, R.R. at 8a-19a.)² ¶ 7 On December 20, 2000, insurer filed a motion for summary judgment based on the clear language of its policies. Insurer also cited as binding Pennsylvania precedent our supreme court's decision in Madison Construction Co. v. The Harleysville Ins. Co., 557 Pa. 595, 735 A.2d 100 (1999), a case involving injury from exposure to fumes emanating from a floor sealant, and this court's opinion in Lititz Mut. Ins. Co. v. Steely, 746 A.2d 607 (Pa.Super.1999),reversed,567 Pa. 98, 785 A.2d 975 (2001), a lead-based paint poisoning case.³

¶ 8 Owner filed an answer and cross-motion for summary judgment on January 26, 2001, alleging that when properly construed, the insurance policies provide coverage, and that the policies are ambiguous. On March 21, 2001, insurer filed an addendum to its memorandum of law, noting that this court sitting en banc had endorsed the Lititz panel's decision in Fayette County Housing Authority v. Housing and Redevelopment Ins. Exchange ("Fayette County"), 771 A.2d 11 (Pa.Super.2001) (en banc), allocatur granted, remanded to the trial court for consideration of the supreme court's decision in Lititz, 793 A.2d 902, 2002 WL 464001 (Pa. 2002) (per curiam).⁴ Shortly thereafter, on March 29, 2001, the trial court entered its order granting owner's motion for summary judgment and denying insurer's motion. This timely appeal followed, in which insurer raises a single issue:

WHETHER AN `ABSOLUTE' POLLUTION EXCLUSION IN A PRIMARY LIABILITY POLICY AND A `TOTAL' POLLUTION EXCLUSION IN AN EXCESS POLICY BAR ALL COVERAGE THEREUNDER AS A MATTER OF LAW FOR ANY DAMAGES ALLEGEDLY RESULTING FROM A LEAK OF GASOLINE AT THE INSURED'S SERVICE STATION.

Appellant's brief at 3.

As stated by our Supreme Court, when reviewing summary judgment cases:

[W]e must view the record in the light most favorable to the non-moving party, and all doubts as to the existence of a genuine issue of material fact must be resolved against the moving party. In order to withstand a motion for summary judgment, a non-moving party must adduce sufficient evidence on an issue essential to his case and on which he bears the burden of proof such that a jury could return a verdict in his favor. Failure to adduce this evidence establishes that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Finally, we stress that summary judgment will be granted only in those cases which are clear and free from doubt. Our scope of review is plenary.

Fayette County, 771 A.2d at 13, quoting Washington v. Baxter, 553 Pa. 434, 441, 719 A.2d 733, 737 (1998) (citations and quotation marks omitted).

¶ 9 Interpretation of an insurance contract is a matter of law and is therefore generally performed by a court rather than by a jury. Madison Construction, supra at 606, 735 A.2d at 106. "In interpreting the language of a policy, the goal is `to ascertain the intent of the parties as manifested by the language of the written instrument.'" The Municipality of Mt. Lebanon v. Reliance Ins. Co., 778 A.2d 1228, 1231-1232 (Pa.Super.2001), quoting Madison Construction, supra at 606, 735 A.2d at 106. "Indeed, our Supreme Court has instructed that the `polestar of our inquiry ... is the language of the insurance policy.'" Id. at 1232, quoting Madison Construction, supra at 606, 735 A.2d at 106.

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