IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Pennsylvania Manufacturers’ :

Association Insurance Company, :

Petitioner :

:

v. : No. 330 M.D. 2015

: Submitted: August 26, 2022

Johnson Matthey, Inc. and :

Pennsylvania Department of :

Environmental Protection, :

Respondents :

:

Johnson Matthey, Inc., :

Third-Party Petitioner :

:

v. :

:

Continental Casualty Company, :

American Casualty Company :

of Reading, PA, and :

Federal Insurance Company, :

Third-Party Respondents :

BEFORE: HONORABLE RENÉE COHN JUBELIRER, President Judge

HONORABLE MICHAEL H. WOJCIK, Judge

HONORABLE LORI A. DUMAS, Judge

OPINION NOT REPORTED

MEMORANDUM OPINION 

BY JUDGE DUMAS1 FILED: July 11, 2023

Johnson Matthey, Inc. (JMI) seeks a declaration of its rights to 

insurance coverage under policies issued by Pennsylvania Manufacturers’ 

Association Insurance Company (PMA). Presently before this Court is an 

application for partial summary relief filed by JMI, asserting that it is entitled to 

1 This opinion was reassigned to the author on February 21, 2023. 
2

collect interest on defense costs from the time those costs were incurred. After 

careful review, we deny the application for partial summary relief.

I. BACKGROUND2

This matter has a long procedural history with which the parties are 

familiar. In May 2006, the Pennsylvania Department of Environmental Protection

(DEP) notified JMI that it had been identified as a potentially responsible person 

(PRP) with respect to environmental contamination at a parcel of land known as the 

Bishop Tube Site (Site), located in Chester County.

3

 JMI notified PMA and, in 

August 2008, entered into a consent order and agreement with DEP.

JMI agreed to undertake remedial actions at the Site, which included 

preparation of a site investigation report, work plans, and a feasibility study (FS). 

The consent order was later amended so that, if DEP was not satisfied with JMI’s 

efforts, it could terminate the agreement, “take over” the remediation, and recover 

costs from JMI. JMI hired Roux Associates, Inc. (Roux) to complete the site studies; 

ultimately, JMI avers that invoices generated in connection with this work totaled 

over $3 million. 

In December 2008, DEP initiated an action in federal court against 

Whittaker Corporation under the Comprehensive Environmental Response, 

Compensation, and Liability Act of 1980 (CERCLA)4and the Hazardous Sites 

2 Unless otherwise stated, we refer to a prior decision of this Court when writing the 

recitation of the factual and procedural history of this matter. Pa. Mfrs. Ass’n Ins. Co. v. Johnson 

Matthey, Inc., 243 A.3d 298, 303-05 (Pa. Cmwlth. 2020) (PMA II).

3 The Site was owned by JMI’s predecessors. From April 1, 1969, to April 1, 1979, PMA 

issued a series of commercial general liability policies to cover the liability of JMI’s predecessors 

for property damage. Coverage limits for policies issued between April 1, 1971, through April 1, 

1979, have been exhausted, but coverage for two policies remains available: the policy covering 

April 1, 1969, to April 1, 1970, and the policy covering April 1, 1970, to April 1, 1971. PMA did 

not insure JMI or its predecessors after April 1, 1979.

4

42 U.S.C. §§ 9601-9675.
3

Cleanup Act (HSCA)5for the cost of remediating its conduct at the Site.

6

 In May 

2010, the Department added JMI as a defendant in this action. In June 2010, PMA 

agreed to defend JMI subject to a reservation of certain rights. PMA defended JMI

from 2010 until 2015. In April 2015, PMA notified JMI that it would no longer 

provide a defense or pay the invoices of JMI’s legal counsel, Saul Ewing Arnstein 

& Lehr LLP (Saul Ewing) after May 31, 2015. 

PMA filed a petition for review in this Court pursuant to the 

Declaratory Judgments Act (DJA),

7 naming as respondents JMI and DEP, and 

requesting a declaration that it had no obligation to defend or indemnify JMI in 

connection with the federal action. JMI filed a counterclaim seeking a declaration 

that 1) PMA had a duty to pay all defense and indemnity costs related to the Site, 

subject to the liability limits of the unexhausted policies, and 2) all remedial 

investigation costs incurred by JMI were properly payable under the policies as 

defense costs. Additionally, JMI raised a breach of contract claim.

PMA filed a motion for summary judgment and relief, but this Court 

denied the motion. Pa. Mfrs. Ass’n Ins. Co. v. Johnson Matthey, Inc., 160 A.3d 285

(Pa. Cmwlth. 2017). PMA appealed to the Pennsylvania Supreme Court, which 

quashed, as this Court had not resolved JMI’s counterclaims. See Pa. Mfrs. Ass’n 

Ins. Co. v. Johnson Matthey, Inc., 188 A.3d 396 (Pa. 2018). 

Back in this Court, PMA moved for partial summary relief, seeking a 

declaration that its duty to defend was not triggered until JMI was named as a 

defendant in the federal action, and that remedial investigation and feasibility study 

5 Act of October 18, 1988, P.L. 756, as amended, 35 P.S. §§ 6020.101-6020.1305. 

6

See Department of Environmental Protection v. Whittaker Corporation and Johnson 

Matthey, Inc., (E.D. Pa., No. 08-6010).

7 Declaratory Judgments Act, 42 Pa.C.S. §§ 7531 – 7541.
4

costs incurred by JMI pursuant to the consent order between JMI and DEP were 

indemnity costs, not defense costs. JMI filed a cross-application for summary relief, 

claiming that PMA breached its duty to defend under the policies by failing to 

reimburse JMI for counsel fees incurred after PMA’s withdrawal.

In November 2020, this Court held that: (1) the PRP letter issued by 

DEP to JMI initiated an administrative “suit,” thus triggering PMA’s duty to defend 

under the policies; (2) expenses attributable to remedial investigations are 

presumptively defense costs; (3) expenses attributable to a feasibility study are 

presumptively indemnity costs; and (4) a genuine issue of material fact existed 

regarding the legal costs sought in JMI’s cross-application.

8

 See PMA II, 243 A.3d 

at 321-22.

Specifically, regarding costs, this Court held that while PMA had 

breached its duty to defend by withdrawing from the defense of the underlying 

action, the record was unclear whether JMI’s claimed damages were all caused by 

PMA’s breach. See id. at 321. For example, we noted that the underlying action 

had been “placed on a suspended docket in March 2009 and was not returned to the 

active docket until June 2017, and certain invoices submitted by Saul Ewing, 

according to PMA, were unrelated to the [u]nderlying [a]ction.” See id. 

Accordingly, “the record [was] unclear as to whether all of Saul Ewing’s invoices 

were ‘costs of the defense’ incurred to either avoid or limit liability under CERCLA 

and HSCA . . . .” See id. Further, “it may be that PMA has resumed its duty to 

defend since September 25, 2018, and, if so, it should be allowed to attempt to 

8 On September 13, 2021, nearly a year later, PMA filed an Application for Extraordinary 

Relief in the Pennsylvania Supreme Court, essentially requesting that the Court take jurisdiction 

over the instant action. See Appl. For Extraordinary Relief, 9/31/21, at 1. The application was 

denied by per curiam order on February 22, 2022. See Pa. Mfrs. Ass’n Ins. Co. v. Johnson Matthey, 

Inc. and Pa. Dep’t of Env’t Prot. (Pa., No. 111 M.M. 2021, filed February 22, 2022).
5

renegotiate the fee arrangement with Saul Ewing or even obtain substitute counsel, 

so long as no prejudice falls on [JMI].” See id.

In January 2022, JMI filed the instant application for partial summary 

relief.

II. ISSUES

JMI seeks a declaration of its rights to insurance coverage regarding 

PMA’s breach of its duty to defend. See Appl. for Summary Relief, 1/4/22, at 1. 

JMI points to this Court’s November 2020 decision, which held that PMA had a duty 

to defend beginning May 24, 2006, and that certain expenses incurred by JMI were 

defense costs. See id. at 5-7. JMI contends that under Pennsylvania law, it is entitled 

as of right to collect interest on those defense costs, from the time that they were 

incurred, at Pennsylvania’s statutory simple interest rate fixed at 6% per annum. See 

id. at 6-7. Further, JMI contendsthat PMA may not apply any litigation management 

guidelines or otherwise make deductions to the $487,152.60 in Saul Ewing costs 

incurred between May 24, 2006, and May 10, 2010. See id.

III. ANALYSIS

Initially, we note that applications for summary relief addressed to this 

Court’s original jurisdiction are authorized under Rule 1532(b) of the Pennsylvania 

Rules of Appellate Procedure, Pa.R.A.P. 1532(b). Marcellus Shale Coal. v. Dep’t

of Env’t Prot., 216 A.3d 448, 459 (Pa. Cmwlth. 2019). The rule provides that “[a]t 

any time after the filing of a petition for review in an . . . original jurisdiction matter 

the court may on application enter judgment if the right of the applicant thereto is 

clear.” Pa.R.A.P. 1532(b). Such relief is similar to summary judgment under the 

Pennsylvania Rules of Civil Procedure, in that “the requested relief is only 

appropriate where there are no disputed issues of material fact and it is clear that the 
6

applicant is entitled to the requested relief under the law.” Marcellus Shale Coal., 

216 A.3d at 459. This Court reviews “the record in the light most favorable to the 

nonmoving party, resolving all doubts as to the existence of disputed material facts 

against the moving party.” See id.

JMI contends that because this Court denied PMA’s motion for partial 

summary relief, and because PMA has not raised issues of disputed fact, it is entitled 

to partial summary relief. See Appl. for Summary Relief, 1/4/22, ¶ 4. Specifically, 

it contends that the defense costs are not in dispute and that they total $487,152.60

as well as statutory interest. See id. ¶ 3. Further, JMI avers that PMA had offered 

to reimburse JMI for the $487,152.60 so long as JMI forfeited its claim for interest, 

and that “[JMI] believes that its right is clear, and declined the offer. As a result, 

[JMI] has received no reimbursement from PMA, to date . . . .” See id. ¶ 5. In 

response, PMA contends that it is without knowledge or information sufficient to 

form a belief as to the truth of JMI’s averments. See Answer, ¶ 3. 

Although this Court ruled that “PMA’s duty to defend was triggered on 

May 24, 2006, when DEP notified JMI that it had been identified as a PRP with 

respect to environmental contamination at the Site,” this Court did not find that 

$487,152.60 was the amount JMI incurred and paid to Saul Ewing for work 

performed between May 24, 2006 and May 10, 2010. PMA II, 243 A.3d at 321. 

Additionally, “[t]he general rule is that an offer to compromise is not admissible in 

evidence at trial as an admission that what is offered is rightfully due or that liability 

exists.” Rochester Mach. Corp. v. Mulach Steel Corp., 449 A.2d 1366, 1368 (Pa.

1982); see also Long Run Timber Co., Ltd. P’ship v. Dep’t of Conservation & Nat. 

Res., 145 A.3d 1217, 1233 (Pa. Cmwlth. 2016) (“An offer of compromise is not 

admissible as evidence to show an admission of that party.”). Thus, because the 
7

amount incurred and paid to Saul Ewing for work performed between May 24, 2006,

and May 10, 2010, is a disputed issue of material fact, “the requested [summary] 

relief is [not] appropriate[.]” Marcellus Shale Coal., 216 A.3d at 459.

Further, in PMA II, this Court held that the costs incurred by JMI for 

various feasibility studies and remedial investigations must be allocated between 

defense costs and indemnity costs, but that the record did not show which expenses 

fit into which category. 243 A.3d at 321. Nothing in JMI’s current application 

shows otherwise. Accordingly, this is still a disputed issue of material fact. 

Finally, in PMA II, this Court rejected the notion that PMA must pay 

all Saul Ewing invoices from 2015 through the present, because to hold otherwise 

would deviate from the well-established rule that “a party that suffers damages as a 

result of [a] breach of contract is bound to use ordinary care and diligence to lessen 

damages as far as is practicable.” See id. at 320-21. We noted that a party cannot 

recover damages that could have been avoided by reasonable care and effort, and 

that where an insurer’s refusal to settle a claim constitutes a breach of its contractual 

duty to act in good faith and fiduciary duty to its insured, the insurer is liable for 

“known and/or foreseeable compensatory damages of its insured that reasonably 

flow from the insurer’s bad faith conduct.” See id. (citations omitted). The same 

rationale applies to the costs JMI now seeks. Accordingly, because it is not clear 

that JMI is entitled to a declaration that PMA may not apply any litigation 

management guidelines, or otherwise make deductions to the $487,152.60 in the 

Saul Ewing costs incurred, and paid, for work performed between May 24, 2006,

and May 10, 2010, the requested summary relief is not appropriate. See Marcellus 

Shale Coal., 216 A.3d at 459.
8

Thus, while we agree that based upon the PMA II holding, PMA 

breached its duty to defend JMI between May 24, 2006, and May 10, 2010, the 

record is unclear whether JMI’s asserted damages, specifically the $487,152.60 

incurred and paid to Saul Ewing for work performed between May 24, 2006, and 

May 10, 2010, were caused by that breach. Additionally, the record is unclear as to 

whether the Saul Ewing invoices were costs of the defense incurred to either avoid,

or limit, liability under CERCLA and HSCA.

IV. CONCLUSION

For the foregoing reasons, we grant the portion of JMI’s Application 

requesting declaratory relief that PMA was in breach of its duty to defend JMI from 

May 24, 2006, to May 10, 2010. We deny the Application in all other respects.

 

 LORI A. DUMAS, Judge

Judges Covey and Fizzano Cannon did not participate in the decision in this case.
IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Pennsylvania Manufacturers’ :

Association Insurance Company, :

Petitioner :

:

v. : No. 330 M.D. 2015

:

Johnson Matthey, Inc. and :

Pennsylvania Department of :

Environmental Protection, :

Respondents :

:

Johnson Matthey, Inc., :

Third-Party Petitioner :

:

v. :

:

Continental Casualty Company, :

American Casualty Company :

of Reading, PA, and :

Federal Insurance Company, :

Third-Party Respondents :

O R D E R

AND NOW, this 11th day of July, 2023, the portion of Johnson Matthey 

Inc.’s (JMI) Application for Partial Summary Relief (Application) that requests this 

Court to declare that Pennsylvania Manufacturers’ Association Insurance Company 

(PMA) was in breach of its duty to defend JMI from May 24, 2006, to May 10, 2010, 

is GRANTED. The portion of the Application that demands that PMA pay the 

$487,152.60 JMI incurred and paid to Saul Ewing Arnstein & Lehr LLP (Saul 

Ewing) for work performed between May 24, 2006, and May 10, 2010, that PMA 

pay Johnson Matthey interest on the $487,152.60 calculated at the statutory rate of 

6.0% per annum beginning on the date incurred, and that PMA not apply any 
10

litigation management guidelines or otherwise make deductions to the $487,152.60,

is DENIED.

 

 LORI A. DUMAS, Judge