No. 391 April Term, 1978, Appeal from the Order of the Court of Common Pleas of Mercer County, Civil Division-Law, dated October 31, 1977, No. 30 June Term, 1971.
Henry E. Sewinsky, Sharon, for appellant.
P. Raymond Bartholomew, Sharon, for appellees.
Jacobs, President Judge, and Hoffman, Cercone, Price, Van der Voort, Spaeth and Hester, JJ. Hester, J., dissents. Hoffman, J., did not participate in the consideration or decision of this case.
[ 260 Pa. Super. Page 180]
The instant appeal arises from an order entered in favor of Travelers Insurance Co. on a petition for a declaratory judgment filed by Andreas Friestad, trading as Superior Heating Co. The declaratory judgment action was instituted to determine whether an insurance policy which Friestad purchased from Travelers allowed indemnification for damages with Sears Roebuck & Co. incurred due to the faulty installation of a Sears' furnace in the home of Mr. and Mrs. Chauncy Thompson. The installation of the furnace, a job which Friestad's company performed pursuant to a contract with Sears, caused a fire which completely destroyed the Thompson's home and its contents. In prior litigation the Thompsons received a judgment in the amount of $20,134.78 including costs against Sears. After satisfying the judgment, Sears filed a complaint in assumpsit against Friestad t/a Superior Heating Co. demanding indemnification plus $10,672.14 in attorneys' fees and costs Sears incurred in defending the Thompson's lawsuit. Friestad notified its insurer, Travelers, of the claim but Travelers denied coverage
[ 260 Pa. Super. Page 181]
and refused to provide a defense. Friestad thereupon filed the instant declaratory judgment action.*fn1
On or about April 28, 1967, Andreas Friestad t/a Superior Heating Co. purchased a comprehensive business owners insurance policy from The Travelers through a local insurance agency in Sharon, Pa. With respect to the kind of liability for which Friestad herein seeks coverage, the contract provided:
"Coverage D -- Liability -- The Travelers agrees to pay on behalf of the insured all sums which the Insured shall become legally obligated to pay as damages because of bodily injury or property damage to which this Section applies, caused by an occurrence, or personal injury caused by an offense committed during the period insurance under this Section is in effect within the United States of America, its territories or possessions or Canada; and The Travelers shall have the right and duty to defend any suit against the Insured seeking damages on account of such bodily injury or property damage, even if any of the allegations of the suit are groundless, false or fraudulent, and may make such investigation and settlement of any claim or suit as it deems expedient, but The Travelers shall not be obligated to pay any claim or judgment or to defend any suit after the applicable limit of The Travelers' liability has been exhausted by payment of judgments or settlements."
While this coverage as stated is broad, it is subject to a number of exclusions in the policy for particular kinds of risks or hazards for which premiums must be separately paid if coverage is to be afforded for such risks. Adumbrated in the insurance contract as follows, the six such hazards are: (a) Premises-Operations; (b) Elevators; (c) Independent
[ 260 Pa. Super. Page 182]
Contractors; (d) Completed Operations; (e) Products; and (f) Other-Describe. For reasons which will become clear hereinafter, it is the juxtaposition of the hazards entitled Premises-Operations, Completed-Operations and Products ...