Madison Construction Co. v. Harleysville Mutual Insurance

678 A.2d 802, 451 Pa. Super. 136, 1996 Pa. Super. LEXIS 2034

• Court: Superior Court of Pennsylvania
• Decided: June 20, 1996
• Status: Published

Opinions

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) (holding that “atmosphere” within meaning of pollution exclusion in CGL policy did not include the release of the pollutant into the air within the insured’s building). 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) (when evidence of release of pollutants did not support jury finding that there had been a “sudden” discharge, dispersal, release or escape of methane gas from Township landfill into adjoining property owner’s home, suit brought by Township against its insurer, for policy coverage of damage to property owner’s home, was reversed by court and a judgment n.o.v. entered for insurance company). Careful review of the present policy at issue, however, does not reveal any language making Harleysville’s policy exclusion inapplicable to cases of “sudden or accidental” emissions or limiting it to the release of pollutants “into or upon the land or the atmosphere.”

Madison states that the true public policy behind a pollution exclusion provision is to prevent the escape of pollutants “into the environment.” Consistent with this assertion, it claims that because Ezzi’s accident did not involve the escape of fumes into the environment, the exclusionary provision should not be read to apply to the instant case. We follow in the footsteps of this and other jurisdictions that have consistently declined to accept such an argument when the policy language is clear and unambiguous. See O’Brien Energy Systems v. American Employers’ Ins., Co., 427 Pa.Super. 456, 629 A.2d 957 (1993), allocatur denied, 537 Pa. 633, 642 A.2d 487 (1994); Lower Paxton, 383 Pa.Super. at 566-67, 557 A.2d at 397 (citing Broadwell Realty Services, Inc. v. Fidelity & Casualty Co., 218 N.J.Super. 516, 528 A.2d 76 (1987), overruled on other grounds by Morton Int’l, Inc. v. General Accident Ins. Co. of Am., 134 N.J. 1, 28, 629 A.2d 831, 847 (1993)). Additionally, because the Harleysville-Madison provision contains no such “into the environment” language, we, as a court, will not “convolute the plain meaning of a writing merely to find an ambiguity.” See O’Brien Energy, 427 Pa.Super. 456, 462, 629 A.2d 957, 960 (1993).

Madison makes the additional argument that the “fumes” which caused Ezzi to faint and injure himself are not “pollutants,” and, therefore, this accident does not fall within the exclusion provision. Specifically, Madison claims that the sealant, a commonly used “membrane-forming”⁴ construction material which it brought onto the helicopter plant in self-contained canisters, was neither an irritant nor a contaminant. In support of its argument, Madison relies on a North Carolina Court of Appeals case, West American Insurance v. Tufco Flooring, 104 N.C.App. 312, 409 S.E.2d 692 (1991). West American, which carries no precedential value, held that under a pollution exclusion provision, fumes emanating from a commonly used construction product are not considered irritants or pollutants, and therefore, should not apply to preclude coverage for the insured. We not only disagree with this holding, but we also refuse to provide such a broad exception simply because a product or material is commonly used in construction.

Specifically, we find no merit in Madison’s argument which' declines to recognize the floor sealant’s Xylene fumes as a pollutant. The prior panel of this court, which addressed this same issue, came to the proper conclusion that:

While the floor-covering material [the Euco Floor Coat] itself was a necessary instrument of Madison’s work, the vapors, however unavoidable, were not. They were an unwanted irritating waste product of the floor covering, and thus could be construed to fit within the policy’s definition of pollution.

This court simply cannot construe the policy language any way other than by finding that the fumes in the instant case were pollutants. First, the language of the exclusion provision clearly states that “fumes” are regarded as a “pollutant.” Second, when canisters of a liquid or other compound are brought onto a premises, opened, and the material, upon exposure to the air or after application to a surface, causes noxious fumes to emanate and make persons dizzy, the fumes are clearly pollutants.⁵ Fumes are a reactionary product of a solid or a liquid which often manifest in the form of a vapor, gas, or smoke. In fact, the dictionary definition of fume is “a smoke, vapor, or gas especially when irritating or offensive.” Webster’s New Collegiate Dictionary, 461 (1981). The fact that the fumes from the floor coating were so strong as to overcome a healthy adult, making him dizzy enough to fall into a trench, compels us to classify the fumes as irritating, and, thus, pollutants under the policy.

Based upon the policy terms, which are the controlling means to discern the intent behind the contract, Gianni supra, we find that the pollution exclusion provision is clear and unambiguous. Ezzi incurred bodily injury from the release of pollutant-fumes at Madison’s working site from a product which Madison brought onto the helicopter plant in connection with its contractual obligations with Kelran. We find no need to look further to ascertain the parties’ intent in drafting the contract, Rusiski v. Pribonic, 511 Pa. 383, 515 A.2d 507 (1986), or determine if the exclusion provision is reasonably susceptible to different constructions and interpretations. Gamble Farm, supra. To do so would unnecessarily create an ambiguity for this court’s resolution as well as add extrinsic language to the existing policy between Harleysville and Madison. O’Brien Energy, supra.

6 Because we find that the trial court committed an error of law in failing to find that Harleysville was entitled to summary judgment, we must reverse the trial court’s order. Hetrick, supra.

Order granting summary judgment reversed. We remand and direct the trial court to enter summary judgment in favor of Harleysville Mutual Insurance Company. Jurisdiction is relinquished.

DEL SOLE, J., files a Dissenting Opinion which is joined by CAVANAUGH and BECK, JJ., and McEWEN, President Judge, concurs in the result of Dissenting Opinion by DEL SOLE, J.

1 . This floor coat was manufactured and sold by Euclid Chemical Company, a party defendant to the underlying civil action.

2 . Specifically, the trial court’s order, in part, reads:

AND NOW this 17th day of November, 1994, it is hereby ORDERED and DECREED that Summary Judgment is GRANTED in favor of plaintiff, Madison Construction Company against defendant The Harleysville Mutual Insurance Company....

3 . The remaining panel judges, Judge Cavanaugh and Judge Wieand, concurred and dissented in the result, respectively.

4 . The term "membrane-forming” is used to describe the curing compound’s ability to waterproof and facilitate the drying of the cement over which it is poured.

5 . The record contains a copy of the manufacturer’s "Material Safety” report on this floor coating. The report lists the different physiological effects which may result from inhaling the sealant’s vapors. The data which is most crucial to this case states:

Inhalation: Vapors may be irritating and may cause CNS [central nervous system] effects, vertigo, muscular weakness, narcosis, confusion [and] coma.

Additionally, the data sheet lists the different ingredients which comprise the sealant. The first material listed is “aromatic solvent.” This solvent contains various chemicals that act as the medium to dissolve the remaining active ingredients in the sealant. The report also states that the primary route of exposure of the sealant is through “inhalation and splashing.”

The above data directly contradicts Madison's argument that it did not bring fumes or vapors onto the worksite where Ezzi was injured. In fact, Madison brought a material, classified as a liquid “aromatic,” onto the Boeing/Vertol premises which was inhaled by Ezzi, causing him to fall and sustain injuries.

6 . Having determined that the policy language is unambiguous, we need not address the second issue raised on appeal. Even if we were to address this issue, however, we find that appellee-Madison takes its argument too far by claiming that a conflict in the courts is ipso facto ambiguous. A panel of this court, in Gamble Farm, supra, stated that “more important than the actual holdings [of the other jurisdictions] is the fact that their decisions demonstrate the existence of an ambiguity in the crucial term ‘atmosphere’ [in a pollution exclusion provision].” The Gamble Farm court relied on this court’s earlier case, Cohen v. Erie Indem. Co., 288 Pa.Super. 445, 432 A.2d 596 (1981), which held that when several appellate courts from other jurisdictions were split over the interpretation of an identical insurance policy provision defining who is a “named insured," this lack of agreement creates “[the convincing] conclusion that the clause in issue is ambiguous as to whether coverage is to be afforded under the fact situation presented.” Id. at 452, 432 A.2d at 599. Our court, in Lower Paxton, 383 Pa.Super. at 573 n. 4, 557 A.2d at 400 n. 4, however, rejected this same argument and refused to hold that where a provision in an insurance policy has been construed in different ways by various courts, that this alone mandates that we find the provision ambiguous.

While we do not invalidate the above reasoning of these cases, we will not improvidently "jump the gun” and avoid analyzing the language of the policy merely because various courts have inconsistently interpreted the policy language. Unlike the facts in Gamble Farm and Cohen, when the terms of the Harleysville-Madison exclusion provision are given their plain and ordinary meaning, Ryan Homes, Inc. v. Home Indent. Co., 436 Pa.Super. 342, 647 A.2d 939 (1994), we find that the pollution exclusion clearly applies to the circumstances surrounding Ezzi’s accident. Furthermore, this court believes that in order to increase predictability and uniformity in the interpretation of pollution exclusion provisions, we must predicate our decisions on the application of the language of the exclusionary clauses to the specific facts presented in each case. Rather than relying on the fact that jurisdictions are split over construing the provisions or that one jurisdictional line of reasoning is better than another, courts must remember to invoke the basic tenet of contract law and look to the writing itself first, before otherwise deciding that a policy is ambiguous. See generally Mark J. Manta, The Absolute Pollution Exclusion: The Inside Story, Mealey’s Litigation Reports, Vol. 10, No.3 (November 14, 1995).

Betz Laboratories Inc., a chemical manufacturer, has filed an amicus curiae brief in support of Madison. Aetna Casualty and Surety Company and The Insurance Environmental Litigation Association have also filed amicus briefs in support of Harleysville.