Court Opinion

ID: 9746298
Source: CourtListenerOpinion
Date Created: 2023-08-27 14:11:24.009374+00
Date Added: 2024-06-11T07:25:11.616439
License: Public Domain

POPOVICH, Judge,
dissenting:
I respectfully dissent from the opinion of the majority that Pennsylvania Manufacturers’ Association Insurance Company had no obligation to defend Snyder Heating Company, Inc., in the lawsuit by Wallingford-Swarthmore School District. Upon review, I conclude that at the time PMA declined to defend Snyder, the pleadings were sufficiently vague to include the possibility that the damage to the School District’s property was covered. Consequently, I submit that the lower court correctly concluded that PMA had a duty to defend Snyder against the school district’s claims, at least until such time that it was clear that the School District’s claims fell within one of the coverage exclusion in the parties’ insurance policy.
Herein, I am convinced that a direct conflict between two panel decisions of this court, Barber v. Harleysville Mut. Ins. Co., 304 Pa.Super. 355, 450 A.2d 718 (1982) and Solcar v. PMA Ins. Co., 414 Pa.Super. 110, 606 A.2d 522 (1991), should be resolved in Snyder’s favor. After careful consideration, I conclude that our decision in Solear, supra, was based upon a misinterpretation of our Supreme Court’s holding in Gene & Harvey Builders, v. PMA Ins. Co., 512 Pa. 420, 517 A.2d 910 (1986). Accordingly, my decision today is grounded upon our decision in Barber, supra. In addition, I find our recent en banc decision in Redevelopment Auth. of Cambria County v. International Ins. Co., 454 Pa.Super. 374, 685 A.2d 581 (1996) (en banc), allocatur denied, 548 Pa. 649, 695 A.2d 787 (1997), is distinguishable.
This appeal arose from a declaratory judgment action filed by Snyder Heating Company, Inc., against its commercial general liability carrier, Pennsylvania Manufacturers’ Association Insurance Company, wherein Snyder alleged that PMA breached their insurance contract by refusing to defend and indemnify Snyder in a law suit by Walling-ford-Swarthmore School District against Snyder. In the School District’s suit against Snyder, it alleged that Snyder had failed to perform properly maintenance on the School District’s boilers, thereby, damaging the boilers. During the pendency of the declaratory judgment action, judgment was entered in Snyder’s favor in the suit by the School District, and, thus, the indemnification issue was moot. The declaratory judgment action then proceeded only on the duty to defend.
Following a non-jury trial, the lower court concluded that PMA owed Snyder a duty to defend under the terms of their insurance contract and ordered PMA to pay Snyder’s defense costs of $ 40,290.51. PMA’s post-trial motions were denied, and this appeal followed.
Herein, PMA complains: 1) The trial court erred as a matter of law in finding that a letter from Snyder’s counsel to PMA consti*489tuted competent evidence of the scope of Snyder’s work on the School District’s boilers and, therefore, the trial court’s findings of fact number four and number twenty are not based on competent evidence; 2) The trial court erred as a matter of law in holding that the School District’s damages were caused by an “occurrence” under PMA’s insurance policy; and 3) The lower court erred as a matter of law in holding that Snyder’s claim was not excluded under policy exclusions (j)(6), (l) and (m).
When reviewing the results of a bench trial, we are bound by the trial court’s findings of fact, unless those findings are not based on competent evidence. Thatcher’s Drug Store v. Consolidated, 535 Pa. 469, 636 A.2d 156, 160 (1994). Absent an abuse of discretion, we are bound by the lower court’s assessment of credibility of the parties. Id., 636 A.2d at 160. However, we are not bound by the lower court’s conclusions of law, as it is our duty to determine whether the lower court properly applied the law to the facts. Id., 636 A.2d at 160.
The record reveals the following facts as found by the lower court:
1. Snyder Heating Company, Inc. (Snyder) contracted with the Waffingford-Swarthmore School District (Distinct) to perform boiler/burner summer maintenance service in the District buildings in the summers of 1988 and 1989.
2. The District claimed it sustained damages to the boilers as the result of Snyder’s failure to correctly perform the summer maintenance.
3. The District filed suit against Snyder in January, 1991 alleging its negligence.
4. The damages alleged were to the refractory material in the boilers; material that Snyder did not work on as part of its contract.
5. The damage is alleged to have resulted from improperly adjusted boiler/burners during the heating season which exposed the refractory materials to heat beyond their tolerance requiring replacement.
6. At all times relevant to the District’s suit and this declaratory judgment action, the Pennsylvania Manufacturers’ Association Insurance Company (PMA) insured Snyder under a commercial package policy of insurance which extended commercial general liability coverage as well as products and completed operations coverage.
7. Snyder immediately informed PMA of the District’s suit and forwarded them a copy of the third party complaint.
8. Under the products and completed operations coverage, PMA insured Snyder against claims for damages for all property damage occurring away from Snyder’s premises arising out of Snyder’s product or Snyder’s work.
9. The insurance policy provides that PMA will pay those sums that Snyder becomes legally obligated to pay as damages because of property damage to which the insurance applies, and PMA has the duty to defend any law suit seeking those damages.
10. PMA disclaimed all coverage under its policy by letters dated February 19 and April 12,1991, refusing to provide either a defense of indemnification. Snyder retained personal counsel to defend the district’s suit.
11. Snyder commenced this declaratory judgment action seeking a declaration that PMA was obligated to defend and indemnify it.
12. The District’s suit against Snyder proceeded to Arbitration after which a judgment was entered in favor of Snyder rendering the indemnification issue in this case moot. No appeal from the judgment was taken.
13. The only issue is whether PMA was obligated to defend Snyder and owes it the costs incurred in defense as well as the costs incurred in bringing this action.
14. Snyder incurred defense costs in both actions including attorneys fees, expert witness fees, expenses and interest to the date of this trial in the sum of $38,-978.01. For services subsequent to this trial, counsel filed a supplementary bilhng, through December 14, 1994, in the amount of $1,312.50.
*49015. The total damages sought are $40,-290.51.
16. PMA argues that the District’s claim was not covered under the policy in force.
17. The coverage turns on whether the facts qualify as an “occurrence” as that term is defined in the PMA policy, and whether the damage sustained 'by the district qualifies as damage “to” Snyder’s work.
18. Section I(l)(b) of the policy provides:
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’; and
(2) The ‘bodily injury’ or ‘property damage’ occurs during the policy period.
In the definitions section of the policy at Section V(9), occurrence is defined as follows:
‘Occurrence’ means an accident, including continuous or repeated exposure to substantially the same general harmful conditions.
19. Section I(2)(j)(6) provides that the insurance does not apply to:
(j) ‘Property damage’ to that particular part of any property that must be restored, repaired or replaced because ‘your work’ was incorrectly performed on it....
Paragraph (6) of this exclusion does not apply to ‘property damage’ included in the ‘produets-completed operation hazard’.
1,2(1) States that this insurance does not apply to:
‘Property damage’ to ‘your work’ arising out of it or any part of it and included in the ‘produets-completed operations hazard’.
20. Snyder did not work on the refractory material and, therefore, the property damage was not to Snyder’s work.
Findings of Fact, Conclusions of Law and Order, June 14,1995, pp. 1-4.
In its complaint, the school district alleged that it had entered into two contracts with Snyder for “Boiler/Burner Service” for the school buildings in the district to be performed during the summers of 1988 and 1989. Copies of the contracts were attached to the complaint as Exhibits A and C. See, Complaint of School District, ¶¶ 5, 7. In its “Breach of Contract” count of the complaint, the school district then set forth Snyder’s “negligent” acts and the damages resulting therefrom in paragraphs 10 and 11, as follows:
10. Snyder has breached the First Contract and the Second Contract (collectively, the “Contracts”), by virtue of its failure to perform its obligations thereunder, including, but not limited to, the following:
(a) Failure to seal and close the Boilers in accordance with the specifications thereof;
(b) Failure to properly test and inspect the Boilers and their components;
(c) Failure to timely inspect the Boilers and report noted deficiencies to the School District;
(d) Failure to install new hardware in the Boilers as needed for the proper operation thereof;
(e) Failure to start the Boilers in accordance with the specifications therefor;
(f) Failure to properly clean the Boilers and their components;
(g) Failure to properly secure Boiler doors and other components to prevent damage thereto; and
(h) Failure to otherwise perform its obligations under the Contracts.
11. Solely as a result to Snyder’s breach of the Contracts, as aforesaid, the School District has suffered damages, including but not limited to, the cost of necessary repairs to the Boilers and replacement of Boiler components, in the amount of Forty-Six Thousand Nine Hundred and Thirty-Six Dollars ($46,936.00), as set forth in the invoice of the Gerngross Corporation for the performance of such re*491pair and replacement work (the “Repair Invoice”), a true and correct copy of which is attached hereto as Exhibit “E” and incorporated herein by reference, and other costs and expenses necessary to correct the damages caused to the Boilers by Snyder.
As stated in paragraph 10 of the School District’s complaint, Exhibit E sets forth the aspects of the boilers which were actually damaged, including firebricks and other refractory materials.
Herein, PMA first claims that the lower court did not base its finding of fact number 4 and number 20 upon competent evidence. Specifically, PMA complains that the lower court erroneously based its conclusion on a letter from Snyder’s attorney to PMA which alleged that the damage to the boiler was to parts of the School District’s heating system upon which Snyder did not work. See, Exhibit P-4. For the purposes of this dissenting opinion, I will assume it was error for the court to consider the letter for proof of the fact that Snyder did not work on the damaged property of the School District.
Nevertheless, I note, as the following reveals, that the School District’s complaint clearly indicates that there were damages to refractory materials. However, it is not clear from the complaint whether Snyder worked on the refractory materials as a part of performing its duties under its boiler service contracts. Likewise, it is unclear from the pleadings whether Snyder’s allegedly negligent work on the boilers ultimately caused the damage to the refractory materials. These ambiguities in the complaint are crucial to our resolution of this matter.
Before addressing the remaining issues raised by PMA, I quote from Aetna Casualty & Surety Co. v. Roe, 437 Pa.Super. 414, 650 A.2d 94 (1994), wherein we set forth the applicable law to determine whether an insurer has a duty to defend:
An insurer’s duty to defend is a distinct obligation, different from and broader than its duty to indemnify. Britamco Underwriters v. Weiner, supra, 431 Pa.Super. at 280, 636 A.2d at 651 (citations omitted); D’Auria v. Zurich Insurance Co., 352 Pa.Super. 231, 233, 507 A.2d 857, 859 (1986) (citations omitted). An insured has purchased not only the insurer’s duty to indemnify successful claims which fall within the policy’s coverage, but also protection against those groundless, false, or fraudulent claims regardless of the insurer’s ultimate liability to pay. D’Auria v. Zurich Insurance Co., supra at 234, 507 A.2d at 859 (citing Zeitz v. Zurich General Accident & Liability Insurance Co., 165 Pa.Super. 295, 67 A.2d 742 (1949)). Not all claims asserted against an insured, however, activate the insurer’s duty to defend. Id.
The insurer’s obligation to defend is fixed solely by the allegations in the underlying complaints.4 Stidham v. Millvale Sportsmen’s Club, supra, 421 Pa.Super. at 564, 618 A.2d at 953; Germantown Insurance Co. v. Martin, supra, 407 Pa.Super. at 331, 595 A.2d at 1174; Hartford Mutual Insurance Co. v. Moorhead, supra, 396 Pa.Super. at 238-39, 578 A.2d at 494-95; United Services Auto. Assoc. v. Elitzky, 358 Pa.Super. 362, 368, 517 A.2d 982, 985 (1986), appeal denied, 515 Pa. 600, 528 A.2d 957 (1987). “It is not the actual details of the injury, but the nature of the claim which determines whether the insurer is required to defend.” D’Auria v. Zurich Insurance Co., supra, 352 Pa.Super. at 234, 507 A.2d at 859 (quoting Springfield Township, et al. v. Indemnity Insurance Co. of North America, 361 Pa. 461, 64 A.2d 761 (1949)). The duty to defend is limited to only those claims covered by the policy. Id. at 235, 507 A.2d at 859 (citations omitted). The insurer is obligated to defend if the factual allegations of the complaint on its face comprehend an injury which is actually or potentially within the scope of the policy. American States Insurance Co. v. Maryland Casualty Co., 427 Pa.Super. 170, 183, 628 A.2d 880, 887 (1993) (citing, inter alia, Cadwallader v. New Amsterdam Casualty Co., 396 Pa. 582, 152 A.2d 484 (1959); Wilson v. Maryland Casualty Co., 377 Pa. 588, 105 A.2d 304 (1954); Stidham v. Millvale Sportsmen’s Club, supra, 421 Pa.Super. at 564, 618 A.2d at 953).
*492Thus, the insurer owes a duty to defend if the complaint against the insured alleges facts which would bring the claim within the policy’s coverage if they were true. 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 which determines whether there is a duty to defend.
D’Auria v. Zurich Insurance Co., supra, 352 Pa.Super. at 235, 507 A.2d at 859.
Where a claim is potentially within the scope of an insurance policy, the insurer who refuses to defend at the outset does so at its own peril. Stidham v. Millvale Sportsmen’s Club, supra (citing Cadwellader v. New Amsterdam Casualty Co., supra.). In Stidham, we stated that [a] declaratory judgment action, though not specifically required by law, might resolve at the outset the question of an insurer’s duty to defend. Id. at 565, 618 A.2d at 954. The purpose of a declaratory judgment procedure is to furnish an expeditious remedy for the settlement of claims which indicate imminent and inevitable litigation and to provide practical help in settling controversies which could be determined more advantageously if settled promptly rather than at some future time when they would require adjudication. Eureka Casualty Co. v. Henderson, 371 Pa. 587, 592, 92 A.2d 551, 553 (1952) (citing the predecessor to 42 Pa.C.S.A. §§ 7531-7541). See also Geisinger Clinic v. Di Cuccio, 414 Pa.Super. 85, 104, 606 A.2d 509, 519 (1992), appeal denied, 536 Pa. 625, 637 A.2d 285 (1993) (purpose of awarding declaratory relief is to settle finally and make certain the legal status or rights of the parties); Doe v. Johns-Manville Corp., 324 Pa.Super. 469, 473, 471 A.2d 1252, 1254 (1984) (declaratory judgments are judicial searchlights switched on at the behest of a litigant to illuminate an existing legal right, status or other relation).
Aetna v. Roe, 650 A.2d at 98-99 (footnote in original).
Further, in Stidham, supra, we specifically stated:
Where a claim is potentially within the scope of an insurance policy, the insurer who refuses to defend at the outset does so at its own peril. Cadwallader v. New Amsterdam Casualty Co., 396 Pa. 582, 589, 152 A.2d 484, 488 (1959). The underlying complaint fixes the parameters of an insurer’s obligation to defend its insured. Harford Mutual Insurance Company v. Moorhead, 396 Pa.Super. 234, 238-39, 578 A.2d 492, 494-95 (1990) (citations omitted); Elitzky, supra at 368, 517 A.2d 982 at 985. In the event that the complaint alleges a cause of action which may fall within the coverage of the policy, the insurer is obligated to defend. Id. If coverage (indemnification) depends upon the existence or nonexistence of undetermined facts outside the complaint, until the claim is narrowed to one patently outside the policy coverage, the insurer has a duty to defend claims against its insured. Germantown Insurance Company v. Martin, 407 Pa.Super. 326, 595 A.2d 1172 (1991); United Services Auto. Ass’n. v. Elitzky, 358 Pa.Super. 362, 517 A.2d 982 (1986); C. Raymond Davis & Sons, Inc. v. .Liberty Mutual Ins. Co., 467 F.Supp. 17 (E.D.Pa.1979); Lee v. Aetna Casualty and Surety Co., 81 F.Supp. 1008 (S.D.N.Y.1949), aff’d, 178 F.2d 750 (2nd Cir.1949).
Stidham, 618 A.2d at 945 (emphasis added).
Turning to PMA’s allegation that the insurance policy does not cover the School District’s claims against Snyder, PMA. first asserts that the lower court erroneously determined that the property damage alleged by the school district was caused by an “occurrence.” The section of the Commercial General Liability Coverage policy issued to Snyder by PMA which relates to insurance coverage for property damage, § I(l)(b), provides:
(b) This insurance applies to “bodily injury” and “property damage” only if:
(1) The “bodily injury” or “property damage” is caused by an “occurrence” *493that takes place in the “coverage territory;” and
(2) The ‘bodily injury’ or ‘property damage’ occurs during the policy period.
The issue is whether the property damage was caused by an “occurrence” which is defined in § V(9) of the policy, as follows:
“Occurrence” means an accident, including continuous or repeated exposure to substantially the same general harmful conditions.
PMA argues that the allegations set forth in the School District’s complaint do not constitute an “occurrence” because they simply allege negligence on the part of Snyder in its performance of the boiler maintenance contract. Here is where the conflict between panel decisions becomes apparent.
In the case of Solcar v. PMA, Ins. Co., 414 Pa.Super. 110, 606 A.2d 522 (1991), we were presented with the question of whether PMA was obligated to defend and indemnify Solear for its faulty work based upon a commercial general liability insurance policy substantial similar to the one sub judice. Therein, we stated that Solcar’s “slipshod construction work ... was not an accident or occurrence, a prerequisite under the insurance contract for reimbursement. Solear was negligent and nothing more.” Solcar, 606 A.2d at 527. Further, we stated:
We are guided in our resolution of this issue by our Supreme Court’s disposition of this same question. In an interpretation of identical language from an insurance contract, the Supreme Court held that an occurrence does not encompass negligence. Gene v.(sic) Harvey Builders v. Pa. Mfrs. Ass’n, 512 Pa. 420, 517 A.2d 910 (1986).
Solear, 606 A.2d at 527 (emphasis added).
If Solcar, supra, is a correct interpretation of Gene & Harvey Builders, supra, then PMA is correct that the School District’s complaint does not, present any claims covered by the policy since, as PMA admits, the claims sounds in negligence. Thus, the holding of Solear, supra, would require reversal of the lower court award, and further inquiry would be unnecessary. However, I reject the interpretation of Gene & Harvey Builders, supra, set forth in Solear, supra, for the following reasons.
In Gene & Harvey Builders, supra, homeowners Marion and Erna D’Augostines filed a complaint against Gene & Harvey Builders which alleged that Gene & Harvey Builders built their home on unstable ground (sinkholes which the builder had intentionally concealed). Further, the homeowners averred that the builders had performed the construction of their home in a negligent and unworkmanlike manner. The homeowners also alleged that their home was damaged by the intentional concealing of the condition of the land and the negligent construction of them home by Gene & Harvey Builders.
Gene & Harvey Builders alerted PMA, their general liability carrier, which, at first, undertook defense of the builder. Subsequently, however, PMA notified the insured that it was denying coverage and would no longer defend the insured. Gene & Harvey Builders filed a declaratory judgment to determine whether the claims were covered under its insurance policy. The lower court found in favor of Gene & Harvey Builders.
On appeal, Gene & Harvey Builders argued that the lower court correctly ruled that the claims against it were caused by “occurrences” and, therefore, covered under the policy. PMA, on the other hand, asserted that coverage should be denied on the basis of several exclusions similar to those raised herein.
In addressing those arguments, our Supreme Court stated:
The complaint alleges that the contractor performed negligently and in an un-workmanlike fashion, that he concealed the presence of sinkholes and filled them under the cover of darkness, and that he misrepresented the condition of the premises to the buyer-homeowners. All these claims are excluded from coverage either because they are not “occurrences,” i.e. accidental events, or because they fall under either exclusion (n) or exclusion (o).
The alleged intentional concealing of the condition of the land or the alleged intentional misrepresentation are not “occurrences” under the policy, for an intentional *494act is not an accident (and only accidents are covered).
The alleged negligence is also excluded from coverage because it clearly falls under both exclusions (n) and.(o).
Whether the contractor was negligent or whether he intentionally deceived the homeowners is not at issue in this case. He may or may not be so adjudicated at trial. What is at issue is whether the wrong alleged in the complaint is covered by the policy or whether it is excepted by an exclusion. Because intentional conduct is not covered by the policy, and because the alleyed neyligent conduct whether it was actually negligent or no-tarises from the product and the work, it is clearly subject the exclusion (n) and (o).
Gene & Harvey Builders, 517 A.2d at 913-14 (emphasis in original).
My reading of Gene & Harvey Builders, supra, does not uncover language of our Supreme Court which should be considered a holding that “an occurrence does not encompass negligence” as stated in Solear, 606 A.2d at 527. Rather, our Supreme Court specifically held that intentional conduct cannot be an “occurrence,” i.e., an accident. Gene & Harvey Builders, 517 A.2d at 913. And, our high court held that the alleged negligence was excluded from coverage because it clearly fell under policy exclusion (n) and (o). Logically, to render that decision, I submit that our Supreme Court had at least to assume that negligence could be an “occurrence.” In other words, our Supreme Court resolved the threshold question of whether negligent acts are covered under the policy in the contractor’s favor. Why else would the court have applied the policy exclusions to deny coverage, rather than simply stating the damages were not caused by an “occurrence?”
In fact, prior to Solear, supra, we had specifically held that negligent acts may be an “occurrence” which require coverage under a general liability policy, and, therein, lies the conflict requiring en banc eonsider-ation. In Barber v. Harleysville Mut. Ins. Co., 304 Pa.Super. 355, 450 A.2d 718 (1982), a contractor sued to collect the balance due on his customer’s account. In response, the customer filed an answer alleging his property had been damaged as a result of the contractor’s negligence. Specifically, the customer alleged that the contractor had “breached the agreement by failing to perform, or improperly performing, certain work specified in the agreement,” and demanded $30,000.00, plus interest in compensation. The contractor alerted his commercial general liability insurer who refused to defend the contractor on the grounds that the property damage was not caused by an “occurrence.”
In addressing the question of whether the contractor’s allegedly negligent work was an “occurrence,” we stated: '
... Since negligence frequently involves an accident,' the occurrence of which was neither expected nor intended by the actor, Appellee’s negligence would be an “occurrence” under the definition cited above. Appellee’s failure to perform and/or his improper performance could easily have been both accidental and neither intended nor expected by Appellee.... Because the property damage resulted from Appel-lee’s alleged failure to perform or improper performance, the claim could easily involve an accident that Appellee neither expected nor intended to have occurred. Since the counter claim “may be within the policy” in the instant case, Appellant must defend the counter claim in light of Cadwallader.
Barber, 450 A.2d at 720.
Thus, we have two panel decisions in direct conflict: Barber, supra, which holds that negligence may possibly be an “occurrence;” and Solear, supra, which holds an “occurrence” does not encompass negligence.1 Given the fact that Gene & Harvey Builders, supra, does not expressly hold that “occurrence” does not encompass negligence, I would reject the holding of Solear, supra, to the extent that it conflicts with our prior decision in Barber, supra. While it is clear that an intentional act cannot be an occurrence, it remains a possibility, at least when *495the pleadings are vague, that an allegation of damage by negligent performance could also encompass “an accident [which was] neither expected nor intended to have occurred.” Barber, 450 A.2d at 720.
Turning to the question of whether the School District’s claim against Snyder was covered by its insurance policy, upon review, I am convinced the claim was covered since the School District, like the customer in Barber, supra, alleged generally that Snyder’s negligent performance of a contract caused damage to its property. PMA must remember that their obligation to defend is initially fixed solely by the allegations in the complaint. Given the vague nature of the original pleadings, I believe that Snyder meets the threshold question of whether there was a possibility that the damage was caused by an “occurrence” and, therefore, covered under the terms of the insurance policy issued by PMA Significantly, the School District’s complaint is extremely broad in its allegations of negligence and vague in its recitation of damages. Thus, it is possible that even if Snyder was negligent, its negligence was not the cause of the damage to the boilers, i.e., the damage was caused by an “occurrence” (accident). As made clear in Aetna v. Roe, supra, and Stidham, supra, it is this possibility of coverage which requires PMA to defend, and PMA’s refusal was at “its own peril.” When the complaint is vague and the question of coverage is dependent upon undetermined facts, the insurer has a duty to defend the claim until it is narrowed to one which is patently outside the policy coverage, Stidham, 618 A2d at 945. Thus, I find that PMA had a duty to defend Snyder until it was able to conclude that the School District’s claims were patently outside the policy coverage.
However, this does not end the inquiry. Whether Snyder’s claim for defense costs could be rejected on other contractual grounds must be determined. To this end, PMA argues that even if “occurrence” does encompass negligence, Snyder’s claim is not covered pursuant to policy exclusions (j)(6), © and (m). Accordingly, I will discuss the issue of whether these policy exclusions bar coverage.
Exclusion (j)(6) provides that the insurance policy does not apply to:
j. “Property damage” to:
(6) That particular part of any property that must be restored, repaired or replaced because “your work” was incorrectly performed on it.
Based upon a review of the complaint, I conclude that this exclusion does not apply since it is not “patently” clear whether the School District claimed damage only to those parts of the boiler upon which Snyder worked. As previously stated, this ambiguity in the complaint caused the School District’s claim to be potentially covered, and it is this potential for coverage which creates PMA’s duty to defend. See Stidham, 618 A.2d at 945.
Exclusion © provides that the insurance policy does not apply to:
l. “Property damage” to “your work” arising out of it or any part of it and included in the “products-completed operations hazard.”
The “products-completed operations hazard” is defined as follows:
“Products-completed operations hazard” includes all “bodily injury” and “property damage” occurring away from premises you own or rent and arising out of “your product” or “your work” except:
(1) Products that are still in your physical possession; or
(2) Work that has not yet been completed or abandoned.
Once again, I am convinced that is unclear from the face of the complaint whether this exclusion applies because the complaint does not indicate whether all of the damage claimed was to Snyder’s work or product. Thus, PMA has a duty to defend because the damages were potentially with the scope of coverage, and, only after the possibility of coverage was excluded through discovery and/or a request for more specific pleading, could PMA withdraw from the defense. Stidham, supra.
Finally, exclusion (m) provides that the insurance policy does not apply to:
*496m. “Property damage” to “impaired property” or property that has not been injured, arising out of:
(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 terms.
“Impaired property” is defined as follows:
“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; or
b. You have faded to fulfill the terms of a contract or agreement;
if such property can be restored to use by:
a. The repair, replacement, adjustment or removal of “your product” or “your work;” or
b. Your fulfilling the terms of the contract or agreement.
PMA argues this section precludes coverage because the School District sued Snyder for breach of contract, and the majority agrees citing Redevelopment Auth. of Cambria County v. International Ins. Co., 454 Pa.Super. 374, 685 A.2d 581 (1996) (era banc), allocatur denied, 548 Pa. 649, 695 A.2d 787 (1997). However, I conclude that this exclusion does not apply for two reasons.
First, it is the substance of the allegation which governs the question of coverage, not the form (assumpsit or tort) of the action chosen by the plaintiff. In Barber, 450 A.2d at 720, this same argument was raised, and we held the exclusion of coverage for breach of contract set forth in the insurance policy did not apply where the action was actually a negligence action, despite the plaintiffs characterization of the cause of action as “breach of contract.”
I recognize that this court, in Redevelopment Authority, 685 A.2d at 589-590, citing Bash v. Bell Telephone Co., 411 Pa.Super. 347, 601 A.2d 825 (1992), further focused the general test to determine whether a cause of action sounds in tort or contract. “To be construed as a tort action, the wrong ascribed to the defendant must be the gist of the action with the contract being collateral.” Id., 685 A.2d at 590. However, given the nearly identical nature of this case to that of Barber, supra, and the fact that Barber, supra, has not been expressly overruled, I have chosen to follow that existing precedent.
Second, I agree with the majority conclusion that liability-coverage provisions, identical to that found herein, are generally found to refer only to liability sounding in tort, not in contract. Redevelopment Authority, 685 A.2d at 591. Also, I agree “[t]he purpose and intent of [Snyder’s] insurance policy is to protect the insured from liability for essentially accidental injury to the person or property of another rather than coverage for disputes between parties to a contractual undertaking.” Id., 685 A.2d at 589, citing, inter alia, Phico Insurance Co. v. Presbyterian Medical Services Corp., 444 Pa.Super. 221, 663 A.2d 753, 756-757 (1995). Further, like the plaintiff in Redevelopment Authority, supra, Snyder should not be permitted to covert its general liability policy into a' professional liability policy or performance bond.
All that said, however, I submit that the majority ignores the fact that an accident could have occurred during the performance of a contract, which was not the result of a breach of a party’s duties imposed by the contract. . In other words, I contend that the expansive allegations of negligent performance of the contract and the vague recitation of damages in the School District’s complaint allowed for the possibility that an accident occurred during the performance of the contract which caused damage to property of the School District upon which Snyder did not work. As previously stated, I am convinced that an allegation of negligent performance of a contract could encompass “an accident [which was] neither expected nor intended to have occurred.” Barber, 450 A.2d at 720. It is the possibility that the School District’s claim is covered which triggers PMA’s duty to defend Snyder.
*497I do not mean to suggest that PMA had a duty to defend Snyder throughout Snyder’s litigation with the School District. Rather, PMA had a duty to defend until additional pleadings or discovery revealed the true nature of the School District’s claim. Stidham, 618 A.2d at 945, citing Gemantown Insurance Co. v. Martin, 407 Pa.Super. 326, 595 A.2d 1172 (“If coverage (indemnification) depends upon the existence or nonexistence of undetermined facts outside the complaint, until the claim is narrowed to one patently outside the policy coverage, the insurer has a duty to defend claims against its insured.”). By failing to inquire further, I believe that PMA refused to defend “at its own peril." Aetna v. Roe, 650 A.2d at 99 (emphasis added), citing Stidham, supra.2
In sum, I am convinced that PMA was required to defend Snyder until such time as PMA was able to ascertain that the damages could not have resulted from an “occurrence” or that another exclusion to coverage applied. Unlike the majority, I do not believe that the complaint was sufficiently clear for PMA to determine that an accident could not have taken place during Snyder’s performance of the contract which would possibly constitute a covered “occurrence” under the terms of the insurance policy. Thus, I would affirm the decision of the court below.
McEWEN, President Judge, joins in this Dissenting Opinion.

. In D’Auria v. Zurich Insurance Co., supra, this Court stated, "The major difference between indemnity and duty to defend cases is that in the latter, the complaint is the sole guide to the facts." Id. at 236, 507 A.2d at 860.

. It should be noted that Solear, supra, makes no mention of Barber, supra.

. Further, it is once again unclear from the complaint whether the damage to the boilers could have been remedied by the repair of Snyder’s product or work. Accordingly, PMA had a duty to defend until it was patently clear whether the exclusion applied. Stidham, supra.