Appeal from order of Court of Common Pleas of Bucks County, Sept. T., 1961, No. 245, in case of Karl C. King et al. v. United States Steel Corporation.
Henry T. Reath, with him David C. Toomey, George T. Kelton, and Duane, Morris & Heckscher, and Begley, Carlin, Mandio, Kelton & Popkin, for appellant.
Arthur M. Eastburn, Jr., with him John Leslie Kilcoyne, and Eastburn and Gray, for appellees.
Bell, C. J., Jones, Cohen, Eagen, O'Brien and Roberts, JJ. Opinion by Mr. Justice Jones. Mr. Justice Roberts concurs in the result. Mr. Justice Cohen dissents. Mr. Justice Musmanno took no part in the consideration or decision of this case. Dissenting Opinion by Mr. Chief Justice Bell.
This is an appeal from the order of the Court of Common Pleas of Bucks County which sustained appellees' (King's) preliminary objections in the nature of a demurrer and entered an order striking appellant's (Steel's) defense that King had released it from liability for the damage alleged in the trespass complaint.
In this action, King seeks to recover damages in excess of $1.5 million for alleged injury to its growing crops allegedly caused by air pollution from Steel's Fairless Works in Falls Township, Bucks County.
The amended complaint reveals that King has been engaged in farming activities since 1943 on land leased from a third party, Warner Company. In 1953 Steel constructed a steel plant on property contiguous to the land leased by King. In 1955 King approached Steel to inquire about the possibility of leasing land adjacent to the steel mill which Steel was not using. Steel agreed to lease 650 acres at an annual rental of $1 per acre. The lease was renewed yearly with slight modifications until 1960. All six yearly leases contained the following exculpatory clause: "Tenant further agrees that Lessor [Steel] shall not be liable in law, equity or otherwise to Tenant [King] for any injury, damage, annoyance, disturbance or discomfort resulting from light, heat, noise, smoke, odors, fumes, gases, vibrations, concussions or other causes incident to the construction, maintenance or operation of any or all of the furnaces, foundries, machine shops, rolling mills, coke ovens, coal and coke by-products plants and manufactories of any and every kind and description on any part or all of the land presently occupied as or hereafter acquired for an addition to or replacement of the Fairless Works of Lessor."
King instituted a trespass suit against Steel in 1961 for alleged pollution damage to four of its crops during the years 1955 through 1960. King does not seek damages for crops planted on the lands leased from Steel which it admits are covered by the terms of the exculpatory clause but it does seek damages for alleged injury to crops planted on the lands leased from Warner Company which King alleges are not covered by the terms of the exculpatory clause. Steel raised the exculpatory clause as an affirmative defense in its answer to the amended complaint. King demurred to this defense and moved to have it stricken. The court granted the motion, holding that the exculpatory clause applied only to lands leased from Steel.
The opinion of the court below is unclear. After reciting the terms of the exculpatory clause, the court decided that the clause was ambiguous. The court then applied the standards for interpreting exculpatory clauses which this Court set forth in Employers Liability Assurance Corp. v. Greenville Business Men's Assoc., 423 Pa. 288, 224 A.2d 620 (1966)*fn1 and concluded, "Applying the enumerated tests, we have very little difficulty in finding that the party claiming immunity has failed to establish that the release was intended to apply to lands other than those leased by Steel to King. Therefore, we sustain the demurrer of the plaintiff on this score." Steel petitioned for a clarification of this opinion. In its supplemental order, the court now held that the release was not ambiguous and "clearly did not release the defendant from liability for damages allegedly caused to crops of the plaintiffs growing on lands of the plaintiffs that were not leased to the plaintiffs by the defendant."
In its first opinion, the court held that the exculpatory clause was ambiguous. If the clause was ambiguous, it should ...