Lititz Mutual Insurance v. Steely

JOHNSON, J.,

dissenting:

¶ 11 respectfully dissent from my distinguished colleague’s Majority Opinion directing the trial court to enter summary judgment in favor of Lititz Mutual Insurance Company (Lititz). The Majority concludes that the pollution exclusion in the insurance policy provided by Lititz unambiguously applies to cases of lead poisoning from ingestion or inhalation of lead-based paint in residential settings. Initially, I disagree with the Majority’s conclusion that the pollution exclusion is implicated. The underlying claims do not “[arise] out of the ... discharge, dispersal, release or escape of pollutants.” Policy at endorsement IL 09280685. Instead, the nature of the claims underlying this dispute involve causes of action such as breach of implied warranty of habitability and misrepresentation, and therefore do not trigger application of the pollution exclusion.

¶ 2 “It has long been the law of Pennsylvania that the nature of the allegations contained in a complaint control whether an insurer must defend a policyholder.” Roman Mosaic & Tile v. Aetna Cas. & Sur., 704 A.2d 665, 668 (Pa.Super.1997) (concluding that nature of plaintiffs claims consisted of sexual harassment and gender discrimination and, therefore, were not covered by policy that provided coverage for claims of false imprisonment, defamation, or invasion of privacy). Likewise, it is the insurer’s absolute obligation to establish that an insurance policy exclusion applies to the circumstances asserted in the underlying claim. O’Brien Energy Sys. v. Am. Employers’ Ins. Co., 427 Pa.Super. 456 , 629 A.2d 957, 960 (1993) (citing Harford Mut. Ins. Co. v. Moorhead, 396 Pa.Super. 234 , 578 A.2d 492, 494 (1990) (“If the factual allegations of the complaint against the insured state a claim which would potentially fall within the coverage of the policy, then the insurer has the duty to defend.”)). Thus, “[i]t is not the actual details of the injury, but the nature of the claim which determines whether the insurer is required to defend.” Id. (quoting Springfield Township v. Indemnity Ins. Co. of N. Am., 361 Pa. 461, 464 , 64 A.2d 761, 762 (1949)). “[I]n determining whether an insurer has a duty to defend, the averments contained in the underlying complaint must be ‘liberally construed with all doubts as to whether the claims may fall within the policy coverage to be resolved in favor of the insured.’ ” Madison Constr. Co. v. Harleysville Mut. Ins. Co., 557 Pa. 595 , 735 A.2d 100, 112 (1999) (Nigro, J., dissenting) (quoting Roman, 704 A.2d at 669 ).

¶ 3 Thus, according to Roman, the trial court must determine if the allegations and claims raised in the underlying complaint of the injured party, Steven Brown, arise out of the “actual, alleged or threatened discharge, dispersal, release or escape of pollutants.” Brown’s complaint alleges that the lead poisoning occurred from the “ingestion and inhalation” of lead-based paint. Complaint at 2. Legally and factually, the underlying concepts are distinguishable. The nature of the causes of action in Brown’s complaint does not trigger the pollution exclusion. See Complaint at 4-8. For example, in his negligence count, Brown avers that his landlord (the Steelys) knew or should have known of the dangers posed to children from the ingestion of lead-based paint, and the landlord knew that their residential *614 property rented to the Browns contained lead-based paint, but failed to abate the problem. Complaint at 5 & 6. Brown further avers that the landlord breached their- duty to use reasonable and due care by, inter alia, failing to warn the Browns of the existence of a potentially dangerous condition, renting a property that was unsafe for human habitation, and failing to comply with applicable landlord-tenant laws, regulations, and standards. Id. at 6. In order to grant summary judgment to Lititz, the trial court would have to conclude that the nature of Brown’s negligence claim “[arose] out of the actual, alleged or threatened discharge, dispersal, release or escape of pollutants.” However, the Browns’ allegations are based on, inter alia, the landlord’s negligent conduct in failing to provide a safe and habitable rental property and the landlord’s purposeful non-compliance with landlord-tenant laws, regulations and standards. Another example is the cause of action for misrepresentation in Brown’s complaint. Brown alleges that the landlord “fraudulently, intentionally, wilfully and wantonly, purposefully, knowingly, recklessly, negligently and/or in fact materially misrepresented that their subject premises were free from lead-based paint” in order to induce the Browns into renting the property. Complaint at 7. Brown’s complaint primarily implicates the landlord’s alleged misconduct rather than the “discharge, dispersal, release or escape” of pollutants.

¶ 4 Since the duty of an insurer to defend its insured is broader than the duty to indemnify, Roman, 704 A.2d at 668 , and any doubt as to whether the underlying claims fall within the exclusion must be resolved in favor of the insured, I must conclude that the trial court did not err in finding that Lititz has a duty to defend the Steelys. I would, therefore, affirm the order of the trial court for the foregoing reasons.

¶ 5 Moreover, summary judgment in favor of Lititz is improper because of the outstanding questions of material fact presented in this case. I agree with the Majority’s recitation of the standard of review for orders granting summary judgment. However, both the applicable rules and our cases preclude entry of summary judgment in the presence of questions of material fact. Pa.R.C.P. 1035.2(1). “Summary judgment is ... improper in any case where the pleadings and discovery indicate that there are factual issues that, if resolved in .favor of the non-movant at trial, will justify recovery under any theory.” Kelly by Kelly v. Ickes, 427 Pa.Super. 542 , 629 A.2d 1002, 1005 (1993).

¶ 6 In this case, the evidence presented by the Steelys and Browns clearly raises questions of material fact. This evidence directly disputes whether the harm alleged, i.e. lead poisoning, can result merely from the “discharge, dispersal, release, or escape” of lead from lead-based paint. The Steelys and Browns produced three expert witnesses who agreed that lead poisoning from lead-based paint does not result from the “discharge, dispersal, release, or escape of lead from lead-based paint.” See Affidavit of Ellen Kovner Silbergeld, Ph.D. (toxicologist) at 2. See also Affidavit of James W. Shockley (certified lead inspector) at 1; Affidavit of James E. Girard, Ph.D. (chemist) at 2. Dr. Silbergeld also stated that the primary mode of lead poisoning in children is from the mouthing or chewing of lead painted surfaces and ingestion [as opposed to “discharge, dispersal, release, or escape”] of paint chips or paint particles commingled in dust and soil. See Affidavit of Dr. Silbergeld at 4 (emphasis added). She further stated that it was not a “scientifically accurate assumption” to characterize lead as a pollutant. See id. at 2.

¶ 7 Lititz, on the other hand, has produced no evidence to support the contrary position. Based on the evidence in the record, I have substantial doubt about properly characterizing lead poisoning in children from the ingestion of lead-based paint in a residential setting as a scenario that unambiguously falls within the ambit *615 of a pollution exclusion in a commercial general liability policy. Since “[s]ummary judgment may be granted only in cases where the right is clear and free from doubt,” Cappelli v. York Operating Co., Inc., 711 A.2d 481, 488 (Pa.Super.1998) (en banc), it is improper to direct the trial court to enter summary judgment in favor of Lititz.

¶ 8 For the foregoing reasons, I would affirm the order of the trial court finding that Lititz has a duty to defend their insureds, the Steelys, and dismissing the Steelys’ request for the court to enter an order requiring Lititz to indemnify the Steelys as premature.