Atlantic Casualty Ins. Co. v. Zymblosky, E.
Atlantic Casualty Ins. Co. v. Zymblosky, E. No. 1167 MDA 2016
Pa. Super. Ct.Jul 17, 2017Background
- Plaintiffs (Appellants) sued several defendants for injuries from a chlorine gas release at a salvage/recycling facility on Nov. 28, 2011; claimants include on‑site workers and passersby.
- Atlantic Casualty insured the property owner (the Zymbloskys) under a commercial policy containing a Total Pollution Exclusion Endorsement that excludes bodily injury “in whole or in part” caused by discharge/release of "pollutants."
- Atlantic filed a declaratory judgment action seeking a ruling that it had no duty to defend or indemnify any party in the underlying suit because the injuries arose from chlorine gas, a pollutant excluded by the policy.
- Trial court denied an early motion on the pleadings, allowed discovery, then granted Atlantic’s summary judgment motion after finding no genuine issue of material fact.
- Key findings: chlorine gas fits the policy’s definition of "pollutant"; the exclusion does not render the policy illusory under Heller because other foreseeable claims would remain covered; the reasonable‑expectations doctrine and alleged agent misrepresentations did not create coverage.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether chlorine is a "pollutant" under the Policy | Chlorine is not a pollutant; injuries are ordinary negligence claims | Chlorine is a gaseous chemical agent requiring an MSDS and thus a pollutant within the policy definition | Court: Chlorine is a pollutant; no genuine factual dispute |
| Whether the Total Pollution Exclusion renders coverage illusory / void as against public policy (Heller) | Exclusion swallows expected coverage for a salvage yard; policy becomes useless (illusory) | Exclusion does not bar a majority of reasonably expected claims; policy still covers non‑pollution risks | Court: Exclusion not illusory; Heller inapplicable; coverage remains effective for other foreseeable risks |
| Whether genuine issues of material fact precluded summary judgment | There remain factual disputes material to duty to defend/indemnify | Facts undisputed on key points (chlorine = pollutant; no coverage for pollutant injuries) | Court: Appellants failed to identify specific disputes; claim waived for inadequate development; summary judgment proper |
| Whether reasonable expectations / agent representations create coverage (including alleged dual agency) | Zymbloskys reasonably expected coverage for salvage‑yard activities; agent Slezak (or Atlantic) represented such coverage | Policy unambiguous; no evidence Atlantic directly made representations; Slezak was agent of broker/insured not of Atlantic | Court: Reasonable‑expectations doctrine inapplicable where exclusion is unambiguous; no evidence Atlantic bound by agent; summary judgment affirmed |
Key Cases Cited
- General Accident Ins. Co. of America v. Allen, 692 A.2d 1089 (Pa. 1997) (insurer may seek declaratory judgment on duty to defend/indemnify)
- Heller v. Pennsylvania League of Cities & Municipalities, 32 A.3d 1213 (Pa. 2011) (policy exclusion void as against public policy where exclusion makes purchased coverage illusory)
- Westfield Ins. Co. v. Astra Foods Inc., 134 A.3d 1045 (Pa. Super. 2016) (Heller limited to exclusions that foreclose the majority of expected claims)
- American Nat. Prop. & Cas. Cos. v. Hearn, 93 A.3d 880 (Pa. Super. 2014) (duty to defend determined by underlying complaint allegations)
- National Cas. Co. v. Kinney, 90 A.3d 747 (Pa. Super. 2014) (standard of review for summary judgment on insurance coverage issues)