No. 3200 Philadelphia 1982, Appeal from the Order of the Court of Common Pleas, Civil Division, of Montgomery County, No. 82-6441
William J. Lehane, Philadelphia, for appellant.
Jan E. DuBois, Philadelphia, for appellees.
Wickersham, Wieand and Lipez, JJ.
This is an appeal from the Order of the Court of Common Pleas of Montgomery County, granting the preliminary objections of the defendants/appellees, Reliance Insurance Company and Planet Insurance Company (hereinafter "Reliance"), and dismissing the complaint of plaintiff/appellant, Techalloy Company, Inc., (hereinafter "Techalloy") for failure to state a cause of action.
The facts underlying Techalloy's complaint developed as follows: On May 20, 1981, James Peterman filed a class action suit against Techalloy, a corporation engaged in the business of cutting and stripping steel, alleging Techalloy had recklessly dumped or stored trichloroetheline (TCE), a chemical used by Techalloy in that process. Peterman claimed that exposure to, contact with or ingestion of TCE, a hazardous and toxic chemical, may have caused serious injury, including neurological, pulmonary, hepatic and renal damage with possible mutagenic, teratogenic and carcinogenic results. In addition, Peterman alleged that as a result of Techalloy's negligence, the plaintiff class suffered an increased risk of serious illness or death due to actual ingestion and/or use of contaminated water and suffered from high anxiety because of the awareness of this risk. Peterman sought the creation of a trust fund for the payment of present and future medical expenses, as well as compensatory damages.
Relying on the comprehensive general liability policy which Techalloy had procured from Reliance in 1976, Techalloy submitted to its insurance carrier a copy of the Peterman complaint, requesting that Reliance defend Techalloy in accordance with the terms of the policy. Reliance denied coverage on the ground that the complaint alleged neither property damage nor bodily injury, and also incorporated by reference a letter sent to Techalloy more than a year earlier which set forth additional reasons for the denial. Consequently, Techalloy employed private counsel who successfully defended that suit, and then initiated the action preceding this appeal seeking as damages the expenses incurred in the Peterman defense plus costs of the present appeal.
Before trial, Reliance filed preliminary objections in the nature of a demurrer to Techalloy's complaint maintaining that there was no duty to defend Techalloy in the Peterman action because the Peterman complaint did not specifically allege present bodily injury in conformance with the policy
definition of personal injury. Reliance also invoked a policy exclusion which was first brought to Techalloy's attention in a letter dated April 28, 1980, and which informed Techalloy that the water contamination caused by the TCE was not sudden and accidental and therefore would not be covered by that particular policy. In support of its argument, Reliance referred to several allegations in the Peterman complaint which described in detail the nature of the damages incurred and the circumstances surrounding the chemical discharge.
The court below granted Reliance's preliminary objections and dismissed Techalloy's complaint on the premise that the insurer had no duty to defend the action when the underlying complaint did not allege actual personal injury. The court did not address the issue of the policy exclusion. It is upon that basis, however, which we affirm the decision of the trial court. We disagree with the opinion of the court below that the Peterman complaint failed to allege personal injury within the boundaries of an insurance policy. Because the ...