Cernica v. Pennzoil

6 Pa. D. & C.4th 435, 1990 Pa. Dist. & Cnty. Dec. LEXIS 270
CourtPennsylvania Court of Common Pleas, Mercer County
DecidedMay 30, 1990
Docketno. 347 C.D. 1986
StatusPublished

This text of 6 Pa. D. & C.4th 435 (Cernica v. Pennzoil) is published on Counsel Stack Legal Research, covering Pennsylvania Court of Common Pleas, Mercer County primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cernica v. Pennzoil, 6 Pa. D. & C.4th 435, 1990 Pa. Dist. & Cnty. Dec. LEXIS 270 (Pa. Super. Ct. 1990).

Opinion

FORNELLI, J,

— This is an action brought by two individuals, John N. Cernica and Anthony T. Deramo, trading and doing business as Shenango Valley Sand and Gravel, for damages allegedly resulting from the use of defective diesel fuel in their equipment. Named as defendants are Pennzoil Products Company, the manufacturer/ supplier of the allegedly defective fuel, and Wayne Thomas, a Pennzoil manager from whom the fuel was purchased. Also named as a defendant is plaintiffs’ insurer, Rockwood Insurance Company. Shenango seeks to recover the monies paid -for the defective fuel, the cost of repairing the damaged equipment, $50,000 in lost revenue, plus interest, legal fees and costs.

Presently before the court is Rockwood’s motion for partial summary judgment, which for the reasons set forth below is granted.

Summary judgment is appropriate only when the record clearly “show[s] that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Pa.R.C.P. 1035(b). “All doubts as to the existence of a genuine issue of a material fact must be resolved against the moving party.” Thompson Coal Co. v. Pike Coal Co., 488 Pa. 198, 204, 412 A.2d 466, 469 (1979). See also, Pocono International Raceway Inc. v. Pocono Produce Inc., 503 Pa. 80, 82-3, 468 [437]*437A.2d 468, 470 (1983). Further, “the court is required, to give the non-moving party the benefit of all reasonable inferences which may be drawn from the facts.” Helinek v. Helinek, 337 Pa. Super. 497, 502, 487 A.2d 369, 372 (1985). (emphasis in original) Accordingly, the relevant facts in the matter now before the court must be reviewed and are set forth in the light most favorable to plaintiffs.

Shenango has its offices in Youngstown, Ohio, and a place of business in Jamestown, Mercer County, Pa. In June 1984, Shenango purchased diesel fuel from Wayne Thomas, at Pennzoil’s facility in Hubbard, Ohio. The fuel was delivered to Shenango in Jamestown, Pennsylvania. Shenango there used the fuel in three diesel engines which stopped operating in April 1985. Subsequent analysis determined that the problem with the three engines was the result of water contamination in the diesel fuel purchased from Thomas and Pennzoil the previous June.

Shenango was insured against certain property damage under an inland marine policy of insurance purchased from Rockwood. The policy covered all risks from external causes which resulted in damage to or direct physical loss of enumerated pieces of equipment. The initial policy covered the period from April 1, 1984,-until April 1, 1985, and was twice renewed to provide coverage until April 1, 1987. Pursuant to this policy of insurance, on April 22,1985, Shenango submitted a claim to Rockwood for the cost of repairs to the three diesel engines damaged by the contaminated fuel. In December 1985, Rockwood paid $1,186.54 in satisfaction of this claim.

In January 1986, one of these three engines, part of an H-90 Hough Front-end Loader, again broke down and again Shenango submitted a claim to Rockwood for the damage to the equipment. On [438]*438March 14, 1986, Rockwood requested that Shenango sign a non-waiver agreement and advised Shenango of its intention to investigate the second breakdown of the front-end loader’s engine to determine whether it was caused by the contaminated fuel or was the result of normal wear, improper maintenance or one of several other types of loss excepted from coverage under the terms of the policy. Shenango signed the non-waiver agreement and advised Rockwood that it was an operational necessity that the damaged loader be operational and available for Shenango’s use by April 1, 1986.

Rockwood had the loader inspected at the Bonanza Equipment Company in Youngstown, Ohio, and the fuel pump was sent to the United Diesel Company in Beaver Falls, Pa. for analysis by J.E. Davidson of Automotive Consultants in Pittsburgh, Pa. The investigation was completed in mid-June of 1986 and on July 16, 1986, Rockwood advised Shenango that Mr. Davidson had concluded that the second breakdown of the loader’s engine was not related to the contaminated fuel, but was the result of fair wear and tear and poor maintenance of the equipment. Consequently, Rockwood declined to compensate Shenango for the second breakdown of the front-end loader.

On September 29, 1987, plaintiffs filed their complaint seeking damages of $60,149.36 in each of three counts, plus interest, costs and, in count III only, legal fees. The $60,149.36 includes the following: (1) $1,186.54 for the cost of repairs to equipment after the 1985 breakdown; (2) $8,962.82 for repairs, transportation and analysis of equipment pursuant to the 1986 breakdown; and (3) $50,000 lost revenue caused by the unavailability of the front-end loader for 30 production days after April 1, 1986. Shenango asserts the joint and several liabil[439]*439ity of Pennzoil and Thomas on the basis of breach of warranty in count I and negligence in count II.

In count III of its complaint Shenango asserts the liability of Rockwood on the basis that the damages relative to the second breakdown of the front-end loader are compensable under the terms of the policy of insurance. Shenango also asserts the liability of Rockwood on the basis of its bad-faith failure to expeditiously investigate and settle Shenango’s claim for the second breakdown. According to Shenango, its $50,000 in lost revenues is the result of Rockwood’s improper delay in evaluating the cause of the 1986 breakdown.

Without admitting liability as to any other damages sought by Shenango, Rockwood seeks partial summary judgment only as to the $50,000 claim for lost revenues. Rockwood asserts and plaintiff concedes that the lost revenues do not constitute a loss covered under the terms of the policy.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Gruenberg v. Aetna Insurance
510 P.2d 1032 (California Supreme Court, 1973)
Bibeault v. Hanover Insurance
417 A.2d 313 (Supreme Court of Rhode Island, 1980)
Thompson Coal Co. v. Pike Coal Co.
412 A.2d 466 (Supreme Court of Pennsylvania, 1979)
Pekular v. Eich
513 A.2d 427 (Supreme Court of Pennsylvania, 1986)
Dercoli v. Pennsylvania National Mutual Insurance
554 A.2d 906 (Supreme Court of Pennsylvania, 1989)
Pocono International Raceway, Inc. v. Pocono Produce, Inc.
468 A.2d 468 (Supreme Court of Pennsylvania, 1983)
Helinek v. Helinek
487 A.2d 369 (Supreme Court of Pennsylvania, 1985)

Cite This Page — Counsel Stack

Bluebook (online)
6 Pa. D. & C.4th 435, 1990 Pa. Dist. & Cnty. Dec. LEXIS 270, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cernica-v-pennzoil-pactcomplmercer-1990.