Opinion ID: 2359406
Heading Depth: 2
Heading Rank: 2

Heading: Effect of the policy exclusion

Text: We apply the same principles of construction stated earlier in assessing the viability of Reliance's claim to the policy exclusion as a alternative basis for denial of coverage. In pertinent part, the Reliance policy excluded from coverage personal injury or property damage arising out of the discharge . . . release or escape of . . . toxic chemicals. . . or . . . waste materials or other irritants, contaminants or pollutants into . . . any water course or body of water, unless such discharge was sudden and accidental. While we were compelled to interpret the meaning of a term whose application was ambiguous, if the language of a policy is clear and unambiguous, we must apply its plain and ordinary meaning, and not struggle to create ambiguity solely for the purpose of finding coverage where none exists. Monti v. Rockwood Ins. Co., 303 Pa.Super. 473, 476, 450 A.2d 24, 25 (1982). This is true even though exceptions to coverage are generally construed against the insurer. Miller v. Prudential Ins. Co. of America, 239 Pa.Super. 467, 472, 362 A.2d 1017, 1020 (1976). Although direction from the record is not overwhelming, Techalloy addresses the issue of the exclusion in a footnote found in its statement of the case. Citing C.H. Heist Corp. v. American Home Assurance Co., 640 F.2d 479 (3d Cir. 1981), Techalloy contends that before Reliance could invoke the exclusion, it must know to a certainty that those facts alleged by Peterman could in no event support a finding that the alleged contamination was sudden and accidental. Thus, Reliance's success at this point would be premature because the suit never developed further than the preliminary objection stage. We do not agree that the pre-trial disposition of this case conclusively establishes insufficient factual development to the extent that it would preclude us from reviewing Reliance's claim. Indeed, notwithstanding the early disposal of Techalloy's complaint, we are able to conclude to our satisfaction, from those facts on record and all reasonable inferences deducible therefrom, that Reliance's implementation of the exclusion is valid. At best, Techalloy could prove that the discharge was accidental. That alone, however, would not substantiate their position since the language of the policy unambiguously states that there will be no coverage for toxic discharge into the environment unless that discharge is both sudden and accidental. Turning to the allegations in the Peterman complaint, it is immediately apparent that Peterman did not allege a sudden event. In contrast, the allegations were directly the opposite, identifying the source of the problem as contamination which occurred on a regular or sporadic basis from time to time during the past 25 years. We find Techalloy's response to be weakened in two other respects. First, a careful reading of Heist and application of its analysis to the facts at bar does not leave us with the same impression as it did Techalloy. Second, the record reveals facts known to both parties as early as 1980 that support Reliance's position to the degree of certainty which Techalloy claims is required. In Heist, Heist Corp., the insured, sought a declaratory judgment against American, its insurer, for a determination of its rights under a policy after American refused to defend or cover Heist who was impleaded in a personal injury action. One basis for American's refusal was that the policy excluded coverage for injuries resulting from the non-accidental discharge of toxic substances. The district court granted a summary judgment for Heist which required American to cover the third party action. American appealed, maintaining in part that covering the action in effect forced American to actually indemnify Heist though subsequent developments of the case may have proved that the exclusion did in fact apply. In accord, the court of appeals vacated that part of the lower court's order, allowing American the opportunity to factually develop the applicability of the exclusion since [a]ctual indemnification depend[ed] upon the existence or nonexistence of facts not yet established. Heist, 640 F.2d at 483. A fatal difference between Heist and the case at bar is that in Heist, the complaint underlying the insurance dispute did not describe in detail the circumstances surrounding the incident. That lack of detail precluded the appeals court from considering the applicability of the exclusion. Instead, the court could only infer from the facts available that the complaint was potentially within the policy, thus the insurer was under the duty to defend its insured pending an actual establishment of facts by the insurer to support its claim to the exclusion. Thus, while a factual evaluation of the exclusion was premature at the summary judgment stage in Heist, that is not a blanket determination which blindly applies with equal import in every situation. On the contrary, any similarity to Heist ends once we proceed past its procedural disposition since we are not faced with such unknown or unascertainable facts in the case at bar. The record below categorically provides sufficient factual allegations to support a finding of a non-sudden occurrence within the plain meaning of the exclusion. In addition to alleging a regular or sporadic discharge over a period of 25 years, the Peterman complaint also maintained that in May of 1979, Techalloy informed the community in which Peterman resided that their well water contained a dangerous level of TCE. Techalloy had also been aware since April 28, 1980, that Reliance investigated the supposed pollution and from that date disclaimed any coverage for the discharge under the terms of the exclusion. Techalloy would have us judicially interpret a provision whose meaning here is unequivocal. Further, Techalloy offers no alternative interpretation of sudden and accidental which would render it ambiguous and capable of our interpretation. We conclude, therefore, that although the allegations of personal injury in the Peterman complaint state a claim to which coverage potentially applies, we find that Reliance was not under a duty to defend Techalloy in the Peterman action because of the existence of the exclusion. The allegations disclosing the circumstances and nature of the chemical discharge explicitely negate any potential for finding a sudden event in order to render the exclusion inapplicable. Furthermore, despite the early dismissal of Techalloy's complaint, there are sufficient facts on record to support a determination that the water contamination did not occur suddenly. The facts of this case afford us a sufficient basis upon which to affirm the demurrer. Order affirmed.