Case Information
*-706 Circulated 06/23/2017 09:49 AM NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
ATLANTIC CASUALTY INSURANCE IN THE SUPERIOR COURT OF
COMPANY, PENNSYLVANIA
Appellee
v.
EDWARD ZYMBLOSKY, EDWARD
ZYMBLOSKY, JR., EDWARD ZYMBLOSKY,
III AND GAIL ZYMBLOSKY; BOOTS &
HANKS TOWING & WRECKING; BOOTS &
HANKS TOWING & WRECKING SERVICE;
BOOKS & HANKS, INC.; HEIDI HOUSER,
ROBERT HOUSER, DOROTHY HOUSER,
DELBERT HOUSER, MARY OGDEN, MARY
IRWIN AND THOMAS IRWIN,
INDIVIDUALLY AND AS PARENTS AND
NATURAL GUARDIANS OF E.I., A MINOR;
BEN WEITSMAN & SON, INC., BEN
WEITSMAN & SON OF SCRANTON, LLC;
BEN WEITSMAN OF SCRANTON;
UPSTATE SHREDDING, LLC, UPSTATE
SHREDDING DISC., INC.,
APPEAL OF: HEIDI HOUSER AND
ROBERT HOUSER; DOROTHY HOUSER
AND DELBERT HOUSER; MARY OGDEN;
MARY IRWIN AND THOMAS IRWIN,
INDIVIDUALLY AND AS PARENTS AND
NATURAL GUARDIANS OF E.I., A MINOR
No. 1167 MDA 2016 Appeal from the Order Entered June 15, 2016 In the Court of Common Pleas of Lackawanna County Civil Division at No(s): 2015 CV 01571 BEFORE: SHOGAN, OTT, and STABILE, JJ.
MEMORANDUM BY SHOGAN, J.: FILED JULY 17, 2017
Heidi Houser, Robert Houser, Dorothy Houser, Delbert Houser,
Mary Ogden, and Mary and Thomas Irwin, individually and as parents and
natural guardians of E.I., a minor, (“Appellants”) appeal from the order
granting Atlantic Casualty Insurance Company’s (“Atlantic”) motion for
summary judgment and entering judgment in favor of Atlantic in this
declaratory judgment action. We affirm.
Atlantic filed a declaratory judgment complaint pursuant to 42 Pa.C.S.
§ 7531, et. seq ., against Appellants and other involved parties as discussed
below, on February 18, 2015. In its declaratory judgment complaint,
Atlantic asserted that it had no duty to defend or indemnify any party in the
underlying action of Heidi Houser, et. al. v. Boots & Hanks Towing &
Wrecking Service, et. al., No. 2013 CV 6433 (“The Underlying Action”).
The trial court summarized the factual and procedural history of this
case as follows:
The Underlying Action was filed on May 16, 2014 by [Appellants]. [Appellants] allege that [Edward Zymblosky,
Edward Zymblosky Jr., Edward Zymblosky III, Gail Zymblosky,
and Boots & Hanks Towing and Wrecking Service (“the
Zymblosky Defendants”)] own property at 1500 North Keyser
Avenue in Scranton, Pennsylvania (“the property”), where
Defendants Ben Weitsman & Son, Inc., Ben Weitsman & Son of
Scranton LLC, Ben Weitsman of Scranton, Upstate Shredding LLC
and Upstate Shredding Disc., Inc. (“the Weitsman Defendants”)
allegedly operate a scrap metal recycling facility pursuant to a
lease with one or more of the Zymblosky Defendants. On
November 28, 2011, the Weitsman Defendants engaged in an
operation involving scrap metal and negligently caused chlorine
gas to release from a cylinder/tank/vessel stored on the
property, which, in turn, released the gas into the air and
created a cloud of chlorine gas to form. At the same time,
[Appellants] Heidi and Dorothy Houser were working in an
outdoor lot next to the property, selling Christmas trees, while
Mary Ogden, Mary Irwin, and Emilie Irwin were traveling in a
vehicle on North Keyser Avenue near the property. All
[Appellants] claim they were exposed to the cloud of chlorine
gas and as a result, suffered injuries.
Atlantic is involved in the Underlying Action because it issued an insurance policy (“the Policy”) for the salvage yard
located on the property owned by the Zymblosky Defendants.
Christopher Slezak (“Slezak”), owner and insurance agent for
CSI & Associates (“CSI”), on behalf of the Zymblosky
Defendants obtained the Policy from Atlantic through its
Managing General Agent, Aberdeen Insurance Group
(“Aberdeen”). Barbara Rosetti (“Rosetti”), a licensed insurance
agent who services client accounts at CSI for the past ten years,
also worked on the Zymblosky Defendants’ account with regard
to the Policy. The Policy contained a “Total Pollution Exclusion
Endorsement,” which allegedly excludes coverage for the event
at issue in the Underlying Action. For this reason, Atlantic filed a
Complaint on February 18, 2015, for Declaratory Judgment that
it has no duty to defend or indemnify any party in the Underlying
Action.
Subsequent to Defendants’ Answers to the Complaint, Atlantic filed a Motion for Judgment on the Pleadings on May 14,
2015. Thereafter, [the trial court] issued an Order denying
[Atlantic’s] Motion in order to more fully develop the factual
record. By doing so, [the trial court] believed it would better be
able to determine whether the Total Pollution Exclusion
Endorsement is valid and whether Atlantic correspondingly owes
a duty to defend and indemnify the insured in the Underlying
Action. Complying with [the trial court’s order], the parties
conducted discovery and based on the information gathered,
[Atlantic] filed a Motion for Summary Judgment on February 25,
2016, asserting again that it had no duty to defend and/or
indemnify Defendants in the Underlying Action based on the
Policy’s Total Pollution Exclusion Endorsement.
The Houser and Zymblosky Defendants filed individual Replies to Atlantic’s Motion on March 28, 2016. Notwithstanding
their continued assertion that chlorine is not a pollutant, the
Zymblosky and Houser Defendants also contend that regardless
of the exclusion policy, “the Zymbloskys were provided
something less than what they had bargained for regarding the
insurance coverage (Reasonable Expectation Theory).”
Trial Court Opinion, 6/15/16, at 2-4 (internal citations omitted).
Oral argument was held on Atlantic’s motion on May 12, 2016. The
trial court issued an order on June 15, 2016, granting Atlantic’s motion for
summary judgment and entering judgment in favor of Atlantic. On July 12,
2016, the Houser Defendants filed a notice of appeal. [1] A Pa.R.A.P. 1925(b)
statement was not ordered. The trial court submitted a statement to this
Court, indicating that in lieu of filing a Pa.R.A.P. 1925(a) opinion, it was
relying on its June 15, 2016 Memorandum and Order, which granted
Atlantic’s motion for summary judgment. Trial Court Letter, 9/29/16, at 1.
Appellants present the following issues for our review:
[1.] Where the total pollution exclusion contained within the
Atlantic Casualty policy renders the coverage illusory and as
such is void as against public policy?
[2.] Whether [Atlantic’s] motion for summary judgment should
have been denied as genuine issues of material fact exist that
must be determined by the trier of fact?
3. Whether genuine issues of material fact remain as to the
insured’s reasonable expectations such that [Atlantic’s] motion
for summary judgment should have been denied?
____________________________________________
[1] The record does not reflect appeals by the other defendants.
Appellants’ Brief at 4 (unnecessary capitalization omitted). [2]
“The proper construction of an insurance policy is resolved as a matter
of law to be decided by the court in a declaratory judgment action.”
Swarner v. Mutual Ben. Group , 372 A.3d 641, 644 (Pa. Super. 2013).
The Declaratory Judgments Act may be invoked to interpret the
obligations of the parties under an insurance contract, including
the question of whether an insurer has a duty to defend and/or a
duty to indemnify a party making a claim under the policy. Both
the duty to defend and the duty to indemnify may be resolved in
a declaratory judgment action. [ General Accident Ins. Co. of
America v. Allen , 692 A.2d 1089, 1096 (Pa. 1997)] citing
Harleysville Mutual Ins. Co. v. Madison , 415 Pa.Super. 361,
609 A.2d 564 (1992) (insurer can seek determination of
obligations to insured before conclusion of underlying action)
(additional citations omitted).
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.
The obligation of an insurer to defend an action against the insured is fixed solely by the allegations in the underlying
complaint. As long as a complaint alleges an injury which may be
within the scope of the policy, the insurer must defend its
insured until the claim is confined to a recovery the policy does
not cover.
The particular cause of action that a complainant pleads is not determinative of whether coverage has been triggered.
Instead it is necessary to look at the factual allegations
contained in the complaint. If we were to allow the manner in
which the complainant frames the request for damages to
control the coverage question, we would permit insureds to
circumvent exclusions that are clearly part of the policy of
____________________________________________
[2] We have renumbered Appellants’ issues for ease of disposition.
insurance. The insured would receive coverage neither party
intended and for which the insured was not charged. The fact
that the plaintiffs couched their claims in terms of negligence
does not control the question of coverage.
We focus primarily on the duty to defend because it is broader than the duty to indemnify. If an insurer does not have
a duty to defend, it does not have a duty to indemnify.
However, both duties flow from a determination that the
complaint triggers coverage.
American Nat. Property and Cas. Companies v. Hearn , 93 A.3d 880,
884 (Pa. Super. 2014) (some internal citations and quotation marks
omitted).
In reviewing orders granting summary judgment, we note the
following:
Our scope of review of an order granting summary judgment is plenary. We apply the same standard as the trial
court, reviewing all the evidence of record to determine whether
there exists a genuine issue of material fact. We 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. Only where there is
no genuine issue as to any material fact and it is clear that the
moving party is entitled to a judgment as a matter of law will
summary judgment be entered.
National Cas. Co. v. Kinney , 90 A.3d 747, 752 (Pa. Super. 2014) (internal
citations and quotation marks omitted). “The appellate Court may disturb
the trial court’s order only upon an error of law or an abuse of discretion.” at 753.
In their first issue, Appellants argue that the total pollution exclusion
contained within the insurance policy renders the coverage illusory and as
such, is void against public policy. Appellants’ Brief at 4, 20. Appellants rely
on Heller v. Pennsylvania League of Cities & Municipalities , 32 A.3d
1213 (Pa. 2011), in support of this assertion. Id. at 22-23. Appellants
argue that the total pollution exclusion would bar almost all claims by the
Zymbloskys due to the nature of their business, rendering the policy useless.
Id. at 23-26. Appellants argue that under the definition of pollutant in the
policy, “any substance regardless of form (solid, liquid, or gas) may be
considered a pollutant.” at 25. Appellants further assert that the
definition includes “waste,” which is further defined to include “material to
be recycled, reconditioned or reclaimed.” Id. According to Appellants,
“[t]he entire nature of the Zymblosky’s business is to recycle, reclaim,
and/or recondition materials.” Id. “Therefore, almost all foreseeable injury
or property damage would have been caused in part by the movement of
waste/scrap metal on the property and therefore be excluded from coverage
pursuant to the total pollution exclusion.” Id. at 26.
The relevant portion of the pollution exclusion in the policy provides as
follows:
TOTAL POLLUTION EXCLUSION ENDORSEMENT Exclusion f. under paragraph 2, Exclusions of Section I – Coverage A – Bodily Injury and Property Damage Liability is
replaced by the following:
This insurance does not apply to:
f. Pollution
(1) “Bodily injury” . . . which would not have occurred in whole or in part but for the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of “pollutants” at any time.
Insurance policy, 11/24/10, Total Pollution Exclusion Endorsement, at 5.
The policy defines “pollutants” as:
solid, liquid, gaseous, or thermal irritant or containment or all
material for which a Material Safety Data Sheet is required
pursuant to federal, state, or local laws, where ever discharged,
dispersed, seeping, migrating or released, including onto or into
the air or any air supply, water or any water supply or land,
including but not limited to petroleum, oil, heating oil, gasoline,
fuel oil, carbon monoxide, industrial waste, acid, alkalis,
chemicals, waste, treated sewage; and associate smoke, vapor,
soot and fumes from said substance. Waste includes material to
be recycled, reconditioned or reclaimed.
Id.
The trial court stated the following regarding the determination to
define chlorine as a pollutant:
Here [Appellants] failed to present [] evidence demonstrating
why chlorine gas should not be considered a pollutant or
contaminant as defined by Atlantic’s policy. . . .
In fact, the only evidence presented to this [c]ourt favors defining chlorine as a pollutant. For example, [Atlantic]
presented evidence including: (1) dictionary definitions of
chlorine state that “chlorine is a gaseous chemical agent which
elicits an inflammatory response”; (2) the Sixth Circuit in U.S. Fidelity and Guaranty Co., supra found that chlorine is a pollutant within the meaning of the policy at issue and that the
bodily injury did arise from a discharge of this pollutant; (3)
federal/state statutes and regulations define and treat chlorine
gas as a pollutant; (4) the Policy defines a ‘pollutant’ as a
material requiring a MSDS, which chlorine gas requires; (5) the
Underlying Complaint makes specific allegations and admissions
that its inhalation caused the Underlying Plaintiffs’ physical
harm; and (6) it is undisputed that chlorine gas is a dangerous
and potentially deadly chemical. For these reasons, [the trial
court found] that chlorine gas is a potentially hazardous and
toxic material. Therefore, chlorine is an irritant or contaminant
constituting a pollutant under the Policy.
Trial Court Opinion, 6/15/16, at 27-28. Thus, we agree with the trial court’s
conclusion that there was no genuine issue of material fact regarding the
classification of chlorine as a pollutant under the policy.
Next, we consider whether the pollution exclusion renders the
coverage illusory and as a result, contravenes public policy, as alleged by
Appellants.
Generally, courts must give plain meaning to a clear and
unambiguous contract provision unless to do so would be
contrary to a clearly expressed public policy. In several recent
cases, this Court has examined claims that unambiguous
provisions in [] insurance policies are unenforceable because
they violate public policies [. . . .] In response, we have
affirmed our reticence to throw aside clear contractual language
based on “the often formless face of public policy.” With regard
to the concept of public policy, we have stated:
Public policy is to be ascertained by reference to the laws and legal precedents and not from general considerations of supposed public interest. As the term “public policy” is vague, there must be found definite indications in the law of the sovereignty to justify the invalidation of a contract as contrary to that policy.... Only dominant public policy would justify such action. In the absence of a plain indication of that policy through long governmental practice or statutory enactments, or of violations of obvious ethical or moral standards, the Court should not assume to declare contracts ... contrary to public policy. The courts must be content to await legislative action.
It is only when a given policy is so obviously for or against the public health, safety, morals or welfare that there is a virtual unanimity of opinion in regard to it, that a court may constitute itself the voice of the community in so declaring that the contract is against public policy.
Heller , 32 A.3d at 153-154 (some internal quotation marks and citations
omitted).
As noted, Appellants rely on Heller in support of their contention that
the policy exception resulted in illusory coverage in contravention of public
policy. This Court previously summarized the holding in Heller as follows:
In Heller , our Supreme Court was asked to determine whether
“it [was] a violation of public policy to exclude from underinsured
motorist (UIM) coverage a claim by an individual eligible for
workers’ compensation benefits.” Heller , 32 A.3d at 1215. The
appellant (Heller) was severely injured in an automobile accident
during the course of his employment as a police officer for
Sugarcreek Borough. Id. Subsequently, Heller sought UIM
benefits from the borough under a policy issued by the appellee
[an insurer], who ultimately denied Heller’s claim under a policy
exclusion providing that UIM coverage did not apply to “any
claim by anyone eligible for workers’ compensation benefits.”
Id.
The Supreme Court noted that the borough voluntarily elected to purchase the optional UIM coverage and paid a
premium to the appellee for the coverage. Id. at 1222. The
Supreme Court therefore found persuasive Heller’s argument
that the borough purchased illusory coverage. at 1223,
1228. As the Supreme Court observed:
Instantly, we are presented with the situation where a mandatory offering under the Motor Vehicle Financial Responsibility Law (MVFRL) was accepted by the borough, who paid a premium for UIM coverage to provide additional protection to its employees who operate or occupy its vehicles. The vehicles in question are used by borough employees during the course and scope of their employment. Thus, the vast majority of all UIM claims likely will be made by borough employees who are eligible for workers’ compensation . The subject exclusion, however, operates to deny UIM benefits to anyone who is eligible for workers’ compensation. Therefore, we find that [the appellee] sold the borough additional coverage that, in effect, will not attach by virtue of an exclusion . Under the facts of this case and as applied to borough employees, the exclusion renders the coverage illusory . Further, the exclusion operates to convert the appellee’s statutory obligation into a sham offering. The appellee received a windfall by charging the borough a premium for the coverage.
Heller , 32 A.3d at 1223 (emphases in original). The court further
remarked:
To uphold the exclusion would thwart the purpose of the [law]
by allowing an insurer to deny benefits for which their insured
paid a premium. Thus, permitting the exclusion to stand
provides a disincentive for insureds to pay premiums for
coverage that is not statutorily required and relieves the insurer
of its obligation to provide benefits for which the insured paid.
While the borough may have received a reduced premium in
exchange for what the appellee deems “limited” coverage, an
insured cannot contract for illusory coverage. at 1225.
Westfield Ins. Co. v. Astra Foods Inc. , 134 A.3d 1045, 1053 (Pa. Super.
2016).
In Westfield , this Court found Heller inapplicable because the policy
exclusion at issue was not aimed at foreclosing the majority of expected
claims; rather, it only excluded a claim under the factual circumstances of
that particular case. Westfield Ins. Co. , 134 A.3d at 1054. Additionally, in
TIG Ins. Co. v. Tyco International Ltd. , 919 F. Supp. 2d 439, 466 (M.D.
Pa. 2013), [3] the court presented the following tenets regarding illusory
insurance coverage:
Insurance coverage is considered “illusory” where the insured
purchases no effective protection. An insurance policy is not
illusory if it provides coverage for some acts; it is not illusory
simply because of a potentially wide exclusion. Coverage under
an insurance policy is not illusory unless the policy would not pay
benefits under any reasonably expected set of circumstances.
Contracts are illusory when one party exploits the other; where
the contracts are hopelessly or deceptively one-sided.
Id. at 466 (internal citations and quotations omitted). Indeed, the TIG Ins.
Co. Court cited Heller for the principle that: “Whether coverage is illusory
must be determined under the specific facts of each case.” at 466.
(citing Heller , 32 A.3d at 1223. “The relevant inquiry is whether a
particular coverage provision is swallowed-up by an exclusion, not whether
the policy as a whole provides some degree of coverage despite the
existence of an exclusion.” TIG Ins. Co ., 919 F. Supp. 2d at 466.
In the case sub judice , we agree with the trial court’s conclusion that
Heller is not applicable. Trial Court Opinion, 6/15/16, at 35. We can
anticipate many types of incidents that could occur on the subject property
that would not be excluded by the policy’s total pollution exclusion. Indeed,
Atlantic has presented two such potential scenarios where the policy would
____________________________________________
[3] “While we recognize that federal district court cases are not binding on
this court, Pennsylvania appellate courts may utilize the analysis in those
cases to the extent we find them persuasive.” Umbelina v. Adams , 34
A.3d 151, 159 n.2 (Pa. Super. 2011).
provide coverage: 1) where a customer or invitee suffered a slip and fall on
the premises due to an irregular physical condition of the premise’s surface
area due to poor maintenance; or 2) where a customer or invitee was on the
premises while the insured was doing demolition work on a vehicle and the
customer or invitee was injured by such process. Atlantic’s Brief at 32.
Further, we cannot agree with Appellants’ interpretation of “waste” as it is
presented in the policy’s definition of “pollutants.” “Waste” as used in that
definition refers to waste resulting from the discharge, dispersal, seeping,
migrating or release of a pollutant. Insurance Policy, 11/24/10, Total
Pollution Exclusion Endorsement, at 5. Thus, we do not interpret “waste” as
used in the “pollutants” definition to apply to any and all recycled, reclaimed,
or reconditioned substances in the salvage yard, as argued by Appellants.
Accordingly, we conclude that the total pollution exclusion would not
bar “almost all claims” made under the policy. Even assuming, arguendo,
that the pollution exclusion is a potentially wide exclusion, the coverage still
is not illusory because it will provide coverage under other reasonably
expected sets of circumstances. Thus, the exclusion does not render the
coverage illusory in contravention of public policy. Appellants’ claim
therefore fails.
In their second issue, Appellants argue that the trial court erred in
granting Atlantic’s motion for summary judgment. Appellants’ Brief at 20.
After setting forth statements of law regarding the standard for entry of
summary judgment in the argument section of their brief on this issue,
Appellants simply state: “The evidence in this matter demonstrates that
genuine issue of material fact remain regarding whether [Atlantic] has a
duty to defend and indemnify the Zymblosky Defendants. As such, the
lower Court erred in granting [Atlantic’s] Motion for Summary Judgment.”
Id. at 20. Appellants do not further develop this argument nor do they
identify those remaining genuine issues of material fact.
“Where an appellate brief fails to provide any discussion of a claim
with citation to relevant authority or fails to develop the issue in any other
meaningful fashion capable of review, that claim is waived.” Umbelina v.
Adams , 34 A.3d 151, 161 (Pa. Super. 2011); Pa.R.A.P. 2119(a). “This
Court will not act as counsel and will not develop arguments on behalf of an
appellant.” Irwin Union Nat. Bank and Trust Co. v. Famous, 4 A.3d
1099, 1103 (Pa. Super. 2010). It is not this Court’s responsibility to comb
through the record seeking the factual underpinnings of a claim. Id. When
deficiencies in a brief hinder our ability to conduct meaningful appellate
review, we may dismiss the appeal entirely or find certain issues to be
waived. Id. ; Pa.R.A.P. 2101. Because Appellants’ failure to sufficiently
develop their argument significantly hinders our ability to conduct
meaningful review of this issue, we find this claim waived. ; Pa.R.A.P.
2101.
In their final issue, Appellants maintain that summary judgment was
improperly entered because there are genuine issues of material fact that
remain as to the insured’s reasonable expectations regarding insurance
coverage. Appellants’ Brief at 29. In support of their position, Appellants
argue that the trial court focused solely on the representations made by
Slezak to the Zymbloskys and failed to consider the representations made
directly by Atlantic to the Zymbloskys. Id. at 31. Appellants contend that
Atlantic directly represented to the Zymbloskys that they would be covered
for activities inherent in operating a salvage yard. Id. Appellants further
argue that the trial court erred in concluding that Slezak was the exclusive
agent of the Zymbloskys. Id. at 35. Appellants contend that there is a
genuine issue of material fact as to whether Slezak was a dual agent
working for Atlantic and therefore representations by Slezak can be
attributed to Atlantic. Additionally, Appellants assert that the
Zymbloskys reasonably relied on the representations made by Slezak, who
was acting as an agent for Atlantic, and that the Zymbloskys reasonably
expected that their business was covered. Id. at 38.
The trial court concluded that the reasonable expectations doctrine is
inapplicable and does not void the total pollution exclusion endorsement in
the policy. Trial Court Opinion, 6/15/16, at 28. Specifically, the trial court
found that Slezak’s alleged deception did not cause the Zymbloskys to
reasonably believe that the injuries due to pollutant exposure were covered
under the policy, as there was no ambiguity in the policy’s exclusion of
coverage for bodily injury caused by a pollutant. at 28-31. Moreover,
the evidence supports the conclusion that Slezak was not an agent of
Atlantic who could bind Atlantic by his representations, but rather was an
agent of CSI and the Zymbloskys. Id. at 28-33. Furthermore, Appellants
present no evidence of representations made directly by Atlantic to the
Zymbloskys. See Appellants’ Brief at 31-35. The trial court addressed
Appellants’ claims in great detail in its opinion entering summary judgment,
and the trial court’s determinations on these issues are supported by the
evidence of record. Accordingly, we affirm the trial court’s decision and do
so based on the thorough trial court opinion entered on June 15, 2016,
granting Atlantic’s motion for summary judgment. [4] Because there was no
genuine issue of material fact regarding these matters, the trial court
properly entered summary judgment.
Order affirmed.
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[4] The parties are directed to attach copies of this opinion to future filings in
the event of further proceedings in this matter.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 7/17/2017
