J-A01004-18

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* Retired Senior Judge assigned to the Superior Court.

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

J.J.D. URETHANE COMPANY

v.

WESTFIELD INSURANCE COMPANY, 

MUNICIPAL AUTHORITY OF THE 

BOROUGH OF BEDFORD, FIDELITY 

AND DEPOSIT COMPANY OF 

MARYLAND AND HOWARD ROBSON, 

INC.

APPEAL OF: WESTFIELD 

INSURANCE COMPANY

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 IN THE SUPERIOR COURT OF

 PENNSYLVANIA

 No. 1440 EDA 2017

Appeal from the Order Entered April 7, 2017

In the Court of Common Pleas of Montgomery County Civil Division at 

No(s): No. 2016-02813

JJD URETHANE COMPANY

v.

WESTFIELD INSURANCE COMPANY, 

MUNICIPAL AUTHORITY OF THE 

BOROUGH OF BEDFORD, FIDELITY 

AND DEPOSIT COMPANY OF 

MARYLAND AND, HOWARD 

ROBSON, INC.

APPEAL OF: WESTFIELD 

INSURANCE COMPANY

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 IN THE SUPERIOR COURT OF

 PENNSYLVANIA

 No. 1554 EDA 2017

Appeal from the Order Entered April 6, 2017

In the Court of Common Pleas of Montgomery County Civil Division at 

No(s): No. 2016-02813

BEFORE: LAZARUS, J., OTT, J., and PLATT*, J.
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MEMORANDUM BY LAZARUS, J.: FILED FEBRUARY 09, 2018

Westfield Insurance Company (Westfield) appeals from the trial court’s 

orders,1 entered in the Court of Common Pleas of Montgomery County, 

denying, without prejudice, its motion for summary judgment and granting in 

part and denying in part Appellee, JJD Urethane Company’s (JJD) motion for 

summary judgment obligating Westfield to defend2 and, if necessary, 

indemnify JJD in an underlying action.

3

 After careful review, we affirm.

JJD supplies and installs commercial urethane foam insulation. 

Westfield issued JJD a commercial general liability (CGL) policy, effective 

March 31, 2012 through March 31, 2013. In May 2010, Howard Robson, Inc.

(Robson), a construction company, hired JJD as a subcontractor to perform

upgrade work on sewage digester tanks at a wastewater facility (facility) 

____________________________________________

1 The orders from which Westfield are appealable as of right. See 42 Pa.C.S. 

§ 7532 (Declaratory Judgment Act); Pa.R.A.P. 311(b)(8) (interlocutory appeal 

as of right); see also Nat’l Cas. Co. v. Kinney, 90 A.3d 747 (Pa. Super. 

2014) (denial of motion for summary judgment effectively disposed of all 

claims set forth in declaratory judgment complaint).

2 We focus on the duty to defend, as it is broader than the duty to indemnify. 

Kvaerner Metals Div. of Snaerner U.S., Inc. v. Commercial Union Ins. 

Co., 908 A.2d at 888 (Pa. 2006). However, both duties “flow from a 

determination that the complaint triggers coverage.” General Accident Ins. 

Co. of America v. Allen, 692 A.2d 1089, 1095 (Pa. 1997).

3 Municipal Auth. of the Borough of Bedford v. Fidelity and Deposit Co. 

of Maryland, No. 2014-542 (Bedford County filed 10/7/14). 
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owned by the Municipal Authority of the Borough of Bedford (the Authority).

4

 

Specifically, JJD was hired to supply and install urethane foam insulation to 

the annular space5 on the tanks to create a seal against the tank walls.6 

Robson had been hired by the Authority in 2009 to upgrade the facility, which 

included constructing and performing certain work on its digester tanks.7 

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4 Robson, as principal, and Fidelity and Deposit Company of Maryland, as 

surety, executed a performance bond, with the Authority as the obligee, in 

the amount of $13,573,000.00 in connection with the Authority’s project.

5 “Annular space” is the area between the top of the digester tanks and the 

body of the digester tanks. N.T. Summary Judgment Motion Hearing, 

1/30/17, at 30.

6 The subcontract agreement between Robson and JJD specifically stated:

SCOPE OF THE WORK: The Work shall include all materials, 

equipment, parts and supplies described in the Subcontract 

Documents and all other incidental materials, equipment, parts 

and supplies that are necessary to completely enable the work and 

it to function as intended, regardless of whether they are shown, 

listed or otherwise disclosed in the Subcontract Documents. The 

Scope of Work shall consist of and include the following: FIELD 

MEASURE, COORDINATE, FABRICATE, SUPERVISE, 

MOBILIZE, DELIVER, PREP, UNLOAD, RIG, HOIST, STAGE, 

INSTALL, CERTIFY AND WARRANT ALL DIGESTER COVER 

URETHANE INSULATION (2 DIGESTER COVERS 

MEASURING APPROXIMATELY 50" IN DIAMETER.) in strict 

accordance with all the project plans, specifications and addenda.

Subcontract Agreement No. 09038.895, 5/3/10, at S.C. 1 (emphasis in 

original).

7 Digesters are used to stabilize the solids that are removed from the 

wastewater during treatment. This stabilization can be performed by using 

aerobic digestion, which involves injecting oxygen into the sludge in an open 

tank, or anaerobic digestion, which takes place in an airtight container like in 
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When the Authority realized in 2012 that one of the digester tanks had been 

damaged and that Robson had failed to rectify the problem,

8

the Authority 

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the instant case. https://www2.humboldt.edu/arcatamarsh/digester.html

(last visited 1/24/18). 

8

In an October 29, 2012 letter, the engineering firm for the Authority notified 

Robson that there were several outstanding items requiring its attention under 

the terms of the parties’ warranty agreement for the treatment facility. The 

letter indicated it was putting Robson on notice that the Authority intends to 

take action against the bond if the items are not fully addressed by November 

15, 2012. The relevant item was described in the letter as follows:

As a separate but related issue, this letter is to serve as a notice 

that a digester mixer on digester #3 has been damaged and may 

result in a significant warranty claim. After being removed from 

service and inspected by the equipment manufacturer, the 

manufacturer has concluded that the mixer impeller has been 

damaged due to some form of debris within the digester fluid. 

Based upon the observed damage, it is the position of the 

Authority that the size of debris impacted by the mixer could not 

have entered the digester tank through the sludge transfer 

pumps. If, upon inspection, the debris that caused the 

damage was a result of either workmanship or material 

defects emanating with your work, all costs associated 

with the inspection, repair and/or replacement of the 

damaged components and handling of sludge will be borne 

by Howard Robson, Inc. The Authority is currently making 

accommodations to empty the tank contents for inspection of the

tank and mixer components. As this is no small task, the process 

will take several weeks and may stretch into December. If the 

date of inspection completion should extend beyond the intended 

termination of the performance bond, this correspondence shall 

serve as notice that the damage has been observed during the 

warranty period and that Howard Robson was made aware of the 

pending liability for repair prior to the expiration of the warranty 

period.

Letter of John C. Clabauth, 10/29/12, at ¶ 21 (emphasis added). A follow-up 

June 2013 letter by the Authority’s attorney indicates that the Authority’s
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filed a complaint against Robson alleging that “Robson and its subcontractors 

performed work on the anaerobic [d]igesters [n]os. 1 and 3 at the [facility] . 

. . [and that] debris used to make the annular seal had fallen into tank

[number 1], damaging one of the mixers.” Authority Complaint, 10/7/14, at 

¶¶ 28, 33, 36. Robson filed a joinder complaint against JJD,9 claiming that 

JJD had improperly handled expanding foam insulation which was the ultimate 

cause of the damage to the digester tank.

10

 

In response to the joinder complaint, JJD requested that Westfield both 

defend and indemnify it against the Authority’s claims. When Westfield 

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“inspection demonstrated that damage to the digester occurred as a 

result of faulty workmanship.” Therefore, the damage is a warranty issue 

that your client must remedy. As detailed in our previous correspondence, the 

mixers and heat exchangers must be repaired or rebuilt by the supplier, 

certified by the supplier, reinstalled, and placed back into service. Additionally, 

the second primary digester must likewise be inspected to insure that a similar 

situation does not exist in the tank. If similar conditions are found, the second 

primary digester must also be rebuilt and placed back into service. Letter of 

E. Lee Stinnett, II, Esq,, 6/24/13, at ¶ 21 (emphasis added).

9 Robson also joined other additional defendants in the joinder complaint, 

averring that they too were “jointly and severally liable with Robson . . . to 

[the Authority] or liable over to Robson . . . for any such liability.” Joinder 

Complaint, 10/8/14, at ¶¶ 3.

10 More specifically, the Authority alleged in its complaint that “the debris 

contacted and damaged at least one roof-mounted mixer, thereafter breaking 

into several pieces as large as forty pounds each.” Authority Complaint, 

10/7/14, at ¶ 37. The manufacturer of the mixer conducted an on-site 

inspection and determined that the mixer suffered bearing damage related to 

the mixer’s impact with the foreign object, the suspected insulation debris. 

Id. at ¶ 41.
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declined to provide coverage to JJD, claiming that the allegations were outside 

the scope of coverage and/or excluded by the policy, JJD instituted the instant 

declaratory judgment action/breach of contract action against Westfield in 

February 2016.

11

 On March 15, 2016, Westfield filed preliminary objections 

to JJD’s complaint, which the court denied. Westfield filed its answer and 

counterclaim on July 1, 2016. In its counterclaim Westfield sought declaratory 

relief, denying that it was required to provide coverage in the underlying suit 

because: (1) the allegations do not constitute occurrences triggering 

coverage under the Policy, and (2) exclusions to the Policy apply to bar 

coverage to JJD. 

In September and October 2016, Westfield and JJD filed cross-motions 

for summary judgment.12 Following oral argument held on January 30, 2017, 

the trial court denied Westfield’s motion. See Order, 4/6/17. On the following 

day, the trial court granted in part JJD’s motion, ordering that “Westfield [] 

shall defend JJD [] on the claims set forth in the Joinder Complaint until such 

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11 In its declaratory judgment action, JJD alleges that the Authority “alleges 

that the urethane foam applied to the exterior of the digester tanks somehow 

found its way inside the digester tank and damaged the mixer equipment.” 

Declaratory Judgment Complaint, 3/1/16, at ¶ 21. The Authority, however, 

denies this allegation in its answer to the complaint. Authority Answer to 

Complaint, 4/1/16, at ¶ 21.

12 Because the parties filed cross-motions for summary judgment, no material 

facts are in dispute. See N.T. Summary Judgment Motion Hearing, 1/30/17, 

at 2.
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time that the claim is confined to a recovery that the policy does not cover” 

and that “Westfield [] is also conditionally obligated to indemnify JJD [] in the 

event JJD[] is held liable for a claim covered by the policy in the underlying 

action.” Order, 4/7/17. The order further stated that JJD’s motion “was 

[d]enied without prejudice as to the claim for breach of contract.” Id.

Westfield filed timely notices of appeal13 and a court-ordered Pa.R.A.P. 

1925(b) concise statement of errors complained of on appeal. Westfield 

presents the following issues for our consideration:

(1) Did the trial court err and abuse its discretion in holding that 

the allegations in the underlying action against Appellee 

labelled as “negligence” describe factual content that was 

outside the scope of Appellee’s work pursuant to its 

subcontract and/or the foreseeable consequences of that 

work, such that these allegations constitute an “occurrence” 

under the relevant insurance policy?

(2) Did the trial court err and abuse its discretion in holding that 

Indalex Inc. v. National Fire Union Ins. Co., 83 A.3d 

418 (Pa. Super. 2013), applies to this case on the grounds 

that Indalex established a rule that an insurer is obligated 

to defend its insured whenever the underlying complaint 

asserts a tort claim based on damages to persons or 

property other than the insured’s product?

(3) Did the trial court err and abuse its discretion in holding that 

Exclusions “b.” and “m.” of the applicable insurance policy 

do not preclude coverage?

(4) Did the trial court err and abuse its discretion in holding that 

[Westfield] has a duty to indemnify [JJD] in the event [JJD] 

is held liable in the underlying action?

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13 The parties entered into a joint stipulation to consolidate these appeals. 

See Pa.R.A.P. 513; Joint Stipulation to Consolidate Appeals, 6/9/17.
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Appellant’s Brief, at 5-6.

Our scope and standard of review of an order granting summary 

judgment14 of an insured’s coverage is well-settled:

An appellate court may reverse the grant of a motion for summary 

judgment if there has been an error of law or an abuse of 

discretion. Since the issue as to whether there are no genuine 

issues as to any material fact presents a question of law, our 

standard of review is de novo; thus, we need not defer to the 

determinations made by the lower tribunals. Our scope of review, 

to the extent necessary to resolve the legal question before us, is 

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14 We note that:

Once a motion for summary judgment is made and is properly 

supported, however, the non-moving party may not simply rest 

upon the mere allegations or denials in his or her pleadings. Pa. 

R. Civ. P. 1035(d). In such a case, Rule 1035(d) requires that by 

affidavits or as otherwise provided in this rule, the non-movant 

must set forth specific facts showing that there is a genuine issue 

for trial. The purpose of Rule 1035(d) is “‘to assure that the motion 

for summary judgment may “pierce the pleading and to require 

the opposing party to disclose the facts of his claim or defense.’” 

Thus, once the motion for summary judgment has been properly 

supported, the burden is upon the non-movant to disclose 

evidence that is the basis for his or her argument resisting 

summary judgment.

Samarin v. GAF Corp., 571 A.2d 398, 402 (Pa. Super. 1989) (emphasis in 

original) (citations omitted). Moreover, a motion for summary judgment may 

properly be granted only:

if the pleadings, depositions, answers to interrogatories, and 

admissions on file, together with the affidavits, if any, show that 

there is no genuine issue as to any material fact and that the 

moving party is entitled to judgment as a matter of law.

Pa.R.C.P. 1035(b).
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plenary. We 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.

Chanceford Aviation Properties, LLP. V. Chanceford Towp. Bd. of 

Supervisors, 923 A.2d 1099, 1103 (Pa. 2007) (internal citations omitted).

When interpreting an insurance policy, we first look to the 

terms of the policy. “When the language of the policy is clear and 

unambiguous, we must give effect to that language.” Donegal 

Mut. Ins. Co. v. Baumhammers, []938 A.2d 286, 290 (Pa. 

2007). “However, ‘when a provision in the policy is ambiguous, 

the policy is to be construed in favor of the insured[.]’” . . . Also, 

we do not treat the words in the policy as mere surplusage and, if 

at all possible, we construe the policy in a manner that gives effect 

to all of the policy’s language. Teno v. State Farm Ins. Co., 716 

A.2d 626, 631 (Pa. Super. 1998)[.]

We then compare the terms of the policy to the allegations in the 

underlying complaint. “It is well established that an insurer’s 

duties under an insurance policy are triggered by the language 

of the complaint against the insured.” In determining 

whether an insurer’s duties are triggered, the factual allegations 

in the underlying complaint are taken as true and liberally 

construed in favor of the insured. “It does not matter if in reality 

the facts are completely groundless, false or fraudulent. It is the 

face of the complaint and not the truth of the facts alleged 

therein[.]” D’Auria v. Zurich Ins. Co., [] 507 A.2d 857, 859 

(Pa. Super. 1986).

Indalex Inc. v. Nat’l Union Fire Ins. Co. of Pittsburgh, PA, 83 A.3d 418, 

420-21 (Pa. Super. 2013) (headnotes, citations and quotations omitted)

(emphasis added). 

“The obligation of the insured to defend an action is “fixed solely by the 

allegations in the underlying complaint.” Erie Ins. Exchange v. Lobenthal, 

114 A.3d 832, 836 (Pa. Super. 2015). Finally, the insurer “is required to 

accept all of the allegations contained in the third party’s complaint as true 
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and provide a defense if there is a chance that the injury alleged could 

potentially fall within the scope of the policy.” Selective Way Ins. Co. v. 

Hosp. Grp. Services, Inc., 119 A.3d 1035, 1046 (Pa. Super. 2015). “[T]he 

duty to defend is not limited to meritorious actions; it even extends to actions 

that are groundless, false, or fraudulent as long as there exists the possibility 

that the allegations implicate coverage.” Am. & Foreign Ins. Co., 2 A.3d 

526, 541 (Pa. 2010) (citations and quotation marks omitted). “The duty to 

defend persists until an insurer can limit the claims such that coverage is 

impossible.” Lexington Ins. Co. v. Charter Oak Fire Ins. Co., 81 A.3d 

903, 911 (Pa. Super. 2013) (emphasis omitted).

Westfield claims that JJD did not prove that it was entitled to coverage 

under the parties’ policy because the underlying claim stems from JJD’s faulty 

or defective performance of its contractual work with Robson. Accordingly, 

Westfield contends that the damage does not constitute an “occurrence” under 

the policy, especially where the claim has been recast as one in tort.

The parties’ CGL policy provides, in relevant part:

SECTION I – COVERAGES

COVERAGE A BODILY INJURY AND PROPERTY DAMAGE 

LIABILITY

1. Insuring Agreement

a. We will pay those sums that the insured becomes legally 

obligated to pay as damages because of “bodily injury” or 

“property damage” to which this insurance applies. We will 

have the right and duty to defend the insured against any 

“suit” seeking those damages. However, we will have no 

duty to defend the insured against any “suit” seeking 
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damages for “bodily injury” or “property damage” to which 

this insurance does not apply. We may, at our discretion, 

investigate any “occurrence” and settle any claim or “suit”

that may result.

b. This insurance applies to “bodily injury” and “property 

damage” only if:

(1) The “bodily injury” or “property damage” is caused

by an “occurrence” that takes place in the "coverage

territory;”

SECTION V - DEFINITIONS

8. “Impaired property” means tangible property, other than "your 

product" or "your work," that cannot be used or is less useful 

because:

a. It incorporates “your product” or “your work” that is 

known or thought to be defective, deficient, inadequate or 

dangerous;

b. You have failed to fulfill the terms of a contract or 

agreement; if such property can be restored to use by the 

repair, replacement, adjustment or removal of “your 

product’" or “your work;” or your fulfilling the terms of the

contract or agreement.

17. “Property damage” means:

a. Physical injury to tangible property, including all resulting 

loss of use of that property. All such loss of use shall be 

deemed to occur at the time of the physical injury that 

caused it; or

b. Loss of use of tangible property that is not physically 

injured. All such loss of use shall be deemed to occur at the 

time of the “occurrence” that caused it.

22. “Your work”

a. Means:

(1) Work or operations performed by you or on your 

behalf and

(2) Materials, parts or equipment furnished in connection 

with such work or operations.
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b. “Your work” includes:

(1) Warranties or representations made at any time with 

respect to the fitness, quality, durability, performance or 

use of “your work;” and

(2) The providing of or failure to provide warnings or

instructions.

Finally, the policy defines occurrence as “an accident including continuous or 

repeated exposure to substantially the same general harmful conditions.”

The policy also contains the relevant exclusions:

b. Contractual Liability

“Bodily injury” or “property damage” for which the insured 

is obligated to pay damages by reason of the assumption of 

liability in a contract or agreement.

* * *

m. Damage to Impaired Property or Property Not Physically 

Injured

(1) A defect, deficiency, inadequacy or dangerous condition 

in “your product” or “your work;” or

(2) A delay or failure by you or anyone acting on your behalf 

to perform a contract or agreement in accordance with its 

term.

Westfield Commercial General Liability Policy No. CWP5177101, 3/20/12. 

General liability insurance policies are intended to provide coverage 

where the insured’s product or work causes personal injury or damage to the 

person or property of another. Ryan Homes Inc. v. Home Indem. Co., 647 

A.2d 939 (Pa. Super. 1994). “Provisions of a general liability policy provide 

coverage . . . if the insured work or product actively malfunctions, causing 

injury to an individual or damage to another’s property.” Id. at 942. These 
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types of insurance policies involve risks that are limited in nature; they are 

not the equivalent of a performance bond on the part of the insurer. Snyder 

Heating Co. v Pennsylvania Mfrs.’ Ass’n Ins. Co., 715 A.2d 48

In Kvaerner Metals Div. of Snaerner U.S., Inc. v. Commercial 

Union Ins. Co., 908 A.2d at 888 (Pa. 2006), our Supreme Court stated:

The risk intended to be insured [by commercial general liability 

policies] is the possibility that the goods, products or work of the 

insured, once relinquished and completed, will cause bodily injury 

or damage to property other than to the completed work itself and 

for which the insured by [sic] be found liable. The insured, as a 

source of goods or services, may be liable as a matter of contract 

law to make good on products or work which is defective or 

otherwise unsuitable because it is lacking in some capacity. This 

may even extend to an obligation to completely replace or rebuild 

the deficient work or product. This liability, however, is not what 

the coverages in question are designed to protect against. The 

coverage is for tort liability for physical damages to others 

and not for contractual liability of the insured for economic 

loss because the product or completed work is not that for 

which the damaged person bargained.

Id. at 899 n.10 (citation omitted) (emphasis added). Kravener held that a 

third party’s complaint, alleging only faulty workmanship and damage to the 

insured’s work product, does not trigger coverage under a standard CGL policy 

where the underlying complaint contained claims for breach of contract and 

breach of warranty. 

It is well-settled that it is the nature of the allegations themselves, not 

the particular cause of action that is pled in the complaint that determines 

whether coverage has been triggered. Mutual Benefit Ins. Co. v. Haver, 

725 A.2d 743, (Pa. 1999). Thus, while the Authority’s complaint included 
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breach of contract, negligence, and declaratory judgment counts against 

Robson, the complaint alleges that a “workmanship defect on Robson’s part” 

caused the ultimate damage to the digester tank. Authority Complaint, 

10/7/14, at ¶¶ 46-47, 78-103. Specifically, the complaint alleges that an 

inspection as well as photographic evidence show the defect was in 

contravention of the construction drawings that indicated “a need to confine 

the sealant material to the annular space.” Id. at ¶ 46.

With regard to the allegations in the joinder complaint filed by Robson 

against JJD and the other additional defendants, Robson claims that under the 

Robson-JJD subcontract, JJD “was obligated to perform its work in a good and 

workmanlike manner and in full compliance with the plans and specifications 

under the [Robson-Authority] contract.” Joinder Complaint, 10/8/14, at ¶ 13. 

Moreover, the joinder complaint alleges that if the foam insulation JJD installed 

was installed “contrary to the applicable plans and specifications or in an 

otherwise defective, deficient or unworkmanlike manner, then JJD is solely 

liable to [the Authority] on such claim, and/or liable to Robson on such claim 

for breach of contract and/or jointly and severally liable with Robson on such 

claim.” Id. at ¶ 15. Finally, the joinder complaint premises Robson’s other 

counts against JJD on “carelessly or negligently handl[ing] and installing” the 

foam. Id. at ¶¶ 18, 21.

Here, the trial court concluded that Westfield did not have a duty to 

defend either the breach of contract or the breach of warranty claims in the 

joinder complaint since the claims were premised upon faulty workmanship,
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which does not constitute an “occurrence” under the parties’ policy. 

Kvaerner, supra. However, the court found that the language in the 

Authority’s complaint and the joinder complaint regarding property damage 

that “occurred as a result of conduct outside of the scope of the [Authority’s 

contract with Robson] and JJD’s Subcontract[,]” could be considered an 

“occurrence” under the policy, which could potentially fall within the policy’s 

coverage. Simply put, the trial court found that Westfield has a duty to 

defend, and potentially indemnify, Robson where it “carelessly allowed foam 

insulation to enter the digester [t]ank.” Trial Court Opinion, at 16.

The trial court’s opinion relies heavily upon Indalex Inc. v. National 

Union Fire Ins. Co., 83 A.3d 418 (Pa. Super. 2013), to conclude that 

Westfield had a duty to defend and a potential duty to indemnify JJD under 

the parties’ insurance policy. In Indalex, the trial court granted summary 

judgment in favor of Appellee-Insurer, National Union, in a coverage dispute 

involving multiple out-of-state lawsuits filed by homeowners and property 

owners against Appellants-Insureds when water leakage caused physical 

damage to their homes (e.g., mold and cracked walls), as well as personal 

injury. The lawsuits claimed that the damage was a result of the defective 

design or manufacturing of appellants’ windows and doors. Appellants alleged 

that they were entitled to coverage from National Union pursuant to a 

commercial umbrella policy. National Union claimed that it was not required 

to provide coverage because there was no “occurrence” under the parties’ 

policy that triggered coverage. 
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Characterizing the claims in the case as “product-liability based tort 

claims,” our Court in Indalex reversed the trial court’s order entering 

summary judgment in favor of National Union. Specifically, our Court found 

that the issues framed in the case involved a bad product that could be 

construed as an active malfunction and not merely bad workmanship. Id. at 

424. Moreover, because the National Union policy contained language 

defining “occurrence” as property damage “neither expected nor intended 

from the standpoint of the Insured,” the court concluded that damages such 

as mold, from an insured’s subjective viewpoint, were “arguably not 

expected.” Id. at 425 (emphasis added). In finding that National Union had 

a duty to defend Appellants, our Court stated “[b]ecause the underlying 

complaints alleged defective products resulting in property loss, to property 

other than Appellants’ products, and personal injury, we conclude there was 

an “occurrence.” Id at 426.

Instantly, we are not dealing with a bad product as in Indalex; it has 

never been alleged that the damage to the digester tank resulted from 

defective design or bad product manufacturing or was the result of the foam 

malfunctioning. Moreover, the parties’ policy defines “occurrence” as “an 

accident, including continuous or repeated exposure to substantially the same 

general harmful conditions,” very different language than the subjective 

language of occurrence used in the parties’ policy in Indalex. 

In Millers Capital Ins. Co. v. Gambone Bros. Dev. Co., 941 A.2d 706 

(Pa Super. 2007), two groups of homeowners individually brought lawsuits 
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against the builder, Gambone, for “faulty workmanship” that resulted in 

property damage to their homes. Specifically, the homeowners’ “complaints 

aver[red that] Gambone and/or its subcontractors built homes with defective 

stucco exteriors, windows, and other artificial seals intended to protect the 

home interiors from the elements. Both complaints were based on claims of 

faulty workmanship. Both complaints alleged that when the defects 

manifested themselves, water damage resulted to the interior of the larger 

product – in this case, the home interiors.” Id. at 713. The trial court 

ultimately held that Gambone’s insurance company, Miller’s, had no duty to 

defend or indemnify the builder against the homeowners’ actions, finding that 

Kvaerner controlled the decision. On appeal, our Court affirmed the trial 

court, concluding that the damage to the homes, a result of faulty work, was 

not an occurrence because it was not a fortuitous event triggering coverage.

The court stressed that in order to give effect to the policy’s language, keeping 

in mind the doctrine of in pari material, “occurrence” could be defined in no 

other way.

The trial court concludes that the instant action involves, in addition to 

faulty workmanship, tort claims against Robson and JJD for property damage 

that may have occurred outside of the scope of the Authority’s contract with 

Robson and the Robson-JJD subcontract. In fact, Gambone discussed this 

exact scenario as follows:

Conversely, the trial court’s disposition of these cases allows for 

the term “occurrence” to be read in pari material with the 

exception to the “your work” exclusion in situations where a 
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plaintiff sues a contractor for faulty work performed by a 

subcontractor. For example, a scenario could arise where a 

subcontractor confuses job orders and works on a part of a project 

on which it was not contracted to work; such a scenario would, in 

all likelihood, be considered an “occurrence” which would not be 

defined as faulty workmanship and would fit within the exception 

to the “your work” exclusion. We can also conjure up additional 

examples. A subcontractor could use materials on a job not 

contemplated by the contractual arrangement between the 

contractor and subcontractor. An error such as this could also be 

considered an “occurrence” and could fit within the exception to 

the “your work” exclusion.

Id. at 715-16. While neither of these specific hypothetical scenarios are 

present in the instant case, the complaint against the insured, JJD (or, the 

joinder complaint), alleges negligent handling of the foam insulation and 

careless/negligent installation of the foam not in accordance with the plans 

and specifications of the project. Therefore, while the Authority’s complaint 

was grounded in allegations of defective workmanship, Robson’s joinder 

complaint does allege claims of negligent and careless work and work outside 

of the scope of the parties’ contract. Under such circumstances where the 

“complaint ‘might or might not’ fall within the policy’s coverage as an 

“occurrence”, the insured is obligated to defend.”

15

 Am. & Foreign Ins. Co., 

supra at 541.

Orders affirmed.

____________________________________________

15 Again, we recognize that Westfield’s duty to defend lasts only “until such 

time as the claim[s are] confined to a recovery that the policy does not cover.” 

Erie Ins. Exch. v. Transamerica Ins. Co., 533 A.2d 1363, 1368 (Pa 1987) 

(citation omitted).
J-A01004-18

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Judgment Entered.

Joseph D. Seletyn, Esq.

Prothonotary

Date:2/9/18