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Riehl v. Travelers Insurance Co.


August 12, 1985


On Appeal from the United States District Court for the Western District of Pennsylvania (D.C. No. 83-85) (Sat Below: Honorable Glenn E. Mencer)

Author: Garth



GARTH, Circuit Judge:

Ralph Riehl, Jr., sought a declaration that certain insurance policies issued by the Travelers Insurance Company covered the expenses of cleaning up a toxic waste dump site located on his property. The site has been found to be releasing toxic pollutants into neighboring surface and ground waters. The district court granted summary judgment in favor of Riehl, declaring Travelers to be obligated to pay the costs of clean-up of the site "attributable to the applicable coverage period. "Because material issues of fact are in dispute, we reverse the order of the district court and remand for trial.



Riehl bases his claims on Comprehensive General Liability and supplementary "umbrella" policies issued by Travelers for three periods.*fn1 Each primary policy obligated Travelers to

play on behalf of the Insured all sums which the Insured shall become legally obligated to pay as damages because of

Coverage A -- bodily injury or

Coverage B -- property damage

to which this insurance applies, caused by an occurrence, and the Company shall have the right and duty to defend any suit against the Insured seeking damages on account of such bodily injury or property damage.

Appendix at 74.*fn2

Each primary policy, like the umbrella policy, see, supra at note 2, defines "property damage" as:

"Property damage" means (1) physical injury to or destruction of tangible property which occurs during the policy period, including the loss of use thereof at any time resulting therefrom, or (2) loss of use of tangible property which has not been physically injured or destroyed provided such loss of use is caused by an occurrence during the policy period.

Appendix at 68. "Occurrence" in the primary policies is defined as:

"Occurrence" means an accident, including continuous or repeated exposure to conditions, which results in bodily injury or property damage neither expected nor intended from the standpoint of the Insured;

Appendix at 67 (emphasis added).*fn3

The policies also contain several relevant exclusions. First and foremost, pollution damage "expected or intended by the insured or [one for whom the insured] is liable" is excluded under both the primary and umbrella policies:

The insurance does not apply

(f) to bodily injury or property damage arising out of any emission, discharge, seepage, release or escape of any liquid, solid, gaseous or thermal waste or pollutant if such emission, discharge, seepage, release or escape is either expected or intended from the standpoint of any insured or any person or organization for whose acts or omissions any insured is liable.

Appendix at 74, 99 (emphasis added). Also excluded under both primary and umbrella policies is damage to "property owned . . . by the Insured." Appendix at 74, 99.


Riehl inherited the property in question from his father in 1970. Upon acquisition of the property, he continued to lease the property to Albert Fuchs, ostensibly for use as a landfill and metal reclamation business. Appendix at 579. Fuchs had occupied the property as lessee since the 1940's. Sometime during Fuchs' tenancy, toxic wastes began to be dumped on the property, though it is not clear when the dumping began or who did the dumping.

In August of 1980, the Pennsylvania Department of Environmental Resources (DER) notified Fuchs that his use of the property as a slag dumpsite without a permit was illegal. Appendix at 503, 530-31. In June, 1981, the DER advised Riehl through his attorney that the site was suspected to be a hazardous waste dump. Appendix at 504, 508, 547, 581. The Environmental Protection Agency (EPA) and DER subsequently determined that soil, surface, and ground waters had all become contaminated with toxic wastes, due to the illegal dumping and burial of drums containing toxic chemicals. In August of 1983, Riehl received notice that the EPA would commerce clean-up of the site, and that all expenses of clean-up would be assessed against Riehl as a "responsible party" under the comprehensive Environmental Response Compensation Liability Act of 1980 ("CERCLA"), 42 U.S.C. ยง 9607(a).*fn4 As of yet, no legal proceedings have been instituted against Riehl by either DER or EPA.

Riehl notified Travelers of the ongoing investigation on October 5, 1982. Riehl incurred expenses in performing his own investigation of the extent of contamination of the site. In response to Riehl's inquiries, Travelers' claims department issued a statement of its position, dated January 11, 1983:

It is still our position that no claim has been presented, and certainly none which would meet the definition of property damage or bodily injury as it is outlined in the policy. For this reason, we cannot be more specific as to how we will apply coverage to future claims, if and when they ever even materialize.

You did ask that we address ourselves to coverage issues that we might foresee. For the purpose of this discussion, we surmised that at some point the DER might demand that you take some remedial action to prevent further pollution of streams and water ways in the area. In this context, you asked for our position as to any such remedial obligation.

It is The Travelers position that there is no coverage for costs involved in an "abatement remedy." First of all, we exclude coverage for damage to property owned by the insured. Further, it is our position that costs in connection with remedial action to avoid future and or further damage are not property damage within the intent of We will not provide coverage for clean up of the insured's property either for current damage, or to prevent future damage.

With respect to property damage, we believe that the date of loss should be the date the polluting act occurred. Through the years, apparently from sometime in the 1950's at least as far back as October of 1956, there were repeated acts of pollution. If each one could be fixed in time, those dates would represent the dates of loss. Since they cannot be fixed, we can only say that each Carrier who insured you will have to be responsible for a portion of any claim that materializes. Their responsible portion will be in proportion to the period of time which they insured you.

Appendix at 587-89.


In granting summary judgment to Riehl, the district court reasoned that, since injury to third parties had occurred in that the waters of the Commonwealth were damaged, liability was triggered. The district court also found the exclusion for damage to "property owned by the insured" inapplicable, as Riehl does not own the ground and surface water. Travelers asserts on appeal that the case is not justiciable; or, if it is justiciable, that summary judgment in favor of Riehl was erroneous because material factual issues remain in dispute. According to Travelers, genuine disputes exist as to whether an "occurrence" or loss occurred within the policy periods, and as to whether Riehl "expected or intended" the damage.


In order for a case to be justiciable, the salient facts must be real, not hypothetical. Our review of justiciability is plenary. The problem of justiciability is especially troublesome in a declaratory judgment action, where the court may be asked to decide a case based on events that have not yet and may not occur. See Camerlo v. Howard Johnson Co., 710 F.2d 987, 989 (3d Cir. 1983). Where, however, the essential facts establishing a right to relief, including declaratory relief, have already occurred, the case is justiciable. See Aetna Life Insurance Co. v. Haworth, 300 U.S. 227, 81 L. Ed. 617, 57 S. Ct. 461 (1937).

From the summary judgment record before us, it appears that all relevant events have already occurred, and the case thus appears to be justiciable. The dumping of the wastes and the leaching off the property of these chemicals have apparently already transpired. Travelers contends that "the court made none of the important factual determinations which are a necessary predicate to a coverage determination." Brief for appellants at 29. This objection, however, concerns the propriety of summary judgment in this case; it does not concern nor establish non-justiciability if the salient events have occurred .

The only events which have yet to occur are the expenditure of funds by Riehl for clean-up and the entry of judgment imposing liability on Riehl for the toxic waste damage. However, neither immediate liability for damages, nor a liquidation to the extent of an insurer's indemnification obligation, is necessary in this Circuit to establish a justiciable controversy. In ACandS v. Aetna Casualty & Surety Co., 666 F.2d 819 (3d Cir. 1981), this court found justiciable the question of liability insurance coverage for exposure to asbestos even though not all of the carriers against whom declaratory relief was sought were as yet implicated by an actual suit against the insured.*fn5

Since all relevant events appear from the record to have occurred, we hold that this case is ripe for adjudication.


Summary judgment is appropriate only where the record shows "that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). In making this determination, all reasonable inferences must be drawn in favor of the non-movant. Goodman v. Mead Johnson & Co., 534 F.2d 566, 573 (3d Cir. 1976), cert. denied, 429 U.S. 1038, 97 S. Ct. 732, 50 L. Ed. 2d 748 (1977).

Initially, we note that the burden of establishing a valid policy claim falls upon the insured. Compagnie Des Bauxites de Guinee v. Insurance Company of North America, 551 F. Supp. 1239, 1242-43 (W.D. Pa. 1982), aff'd, 721 F.2d 109 (3d Cir. 1983). thus, it fell upon Riehl to establish, by affidavit, the existence of an "occurrence" or a loss during the policy period.

Exactly what event would, as a legal matter, trigger liability in a toxic wastes case may be subject to some controversy. The district court and the parties to this case have not addressed this legal issue; that is, whether the dumping of wastes is the "occurrence" upon which coverage would be based; or whether the leaching of these wastes is the "occurrence;" or whether the discovery of the pollution is the "occurrence." We note that in the somewhat parallel (though not precisely analogous) situation of asbestosis claims, the issue as to the particular event which triggers insurance coverage -- exposure to asbestos, latency of the disease, or diagnosis -- has been extensively litigated. See, e.g., ACandS v. Aetna Casualty and Surety Co., 764 F.2d 968 (3d Cir. 1985) (holding that under Pennsylvania law, all three events trigger liability); Eagle Picher Industries, Inc. v. Liberty Mutual Insurance Co., 682 F.2d 12 (1st Cir. 1982) (manifestation), cert. denied, 460 U.S. 1028, 75 L. Ed. 2d 500, 103 S. Ct. 1280, 103 S. Ct. 1280 (1983); Porter v. American Optical Corp., 641 F.2d 1128 (5th Cir.) (exposure), cert. denied 454 U.S. 1109, 102 S.Ct 686, 70 L. Ed. 2d 650 (1981). Additionally, this court has decided that where an injurious practice has continued for some time, liability under an "occurrence" policy is triggered by the date the injurious effects occurred (manifestation) rather than the date the practice commenced. Appalachian Insurance Co. v. Liberty Mutual Insurance Co., 676 F.2d 56 (3d Cir. 1982).

We do not decide this legal issue, because on this record we cannot determine whether, or when, any of these events giving rise to this action took place. The record does not establish when dumping first commenced, when leaching first occurred, or when pollution was first discovered. Under any legal theory, one of these events during the policy period is necessary to trigger liability insurance coverage. Yet, as noted, on this record, it cannot be determined when any of these events occurred.*fn6 For this reason, summary judgment for Riehl was inappropriate. Riehl has not established by the summary judgment record before us when any liability of Travelers may have been triggered and what portion of the toxic waste injury may be attributable to periods during which any or all of Travelers' policies were in effect.

Travelers also asserts that whether or not Riehl "expected or intended: the pollution damage is a disputed factual issue, since the policies do not cover injuries "expected or intended by the insured." By affidavit. Riehl asserts that he never learned that the site was used for toxic waste dumping until notified by the DER of its findings in 1981. Affidavit of Ralph R. Riehl, Jr. dated March 28, 1984. In order to support an inference the Riehl must have known of the toxic dumping, Travelers relies on Riehl's interrogatory response that he visited the site from three to ten times a year from 1950 to 1981.*fn7

In the context of this case, the inference of Riehl's knowledge which Travelers seeks to draw from his visits to the dump site is sufficient to raise an issue of fact requiring resolution at trial.*fn8 We note that issues of knowledge and intent are particularly inappropriate for resolution by summary judgment, since such issues must often be resolved on the basis of inferences drawn from the conduct of the parties. Ness v. Marshall, 660 F.2d 517, 519 (3d Cir. 1981).


We observe that at the time the district court judge considered the summary judgment motion, he was confronted with cross-motions for summary judgment, filed by Riehl on the one hand and Travelers on the other. Although the mere fact that cross-motions for summary judgment are filed cannot be taken to mean that no material facts are in dispute, a court faced with such motions might well proceed to the legal issues without making as detailed an examination of the factual questions as it might otherwise undertake. Given the procedural posture of this case and the complexity of the legal issues argued by the parties, the significance of the underlying and unresolved factual problems may very well have been obscured before the district court.*fn9 However, on the basis of the record developed before the district court, summary judgment should not have been granted.

Our independent review of the record discloses that the legal issues presented by the parties cannot be resolved until the disputed issues of facts have been decided at trial. Before liability can be assessed or denied, the following questions of fact, among others, must be answered: 1) when were the toxic substances brought onto the property; 2) who brought the toxic substances onto the property; 3) what was the extent of Riehl's knowledge, if any, of toxic waste dumping; 4) whether within the meaning of the policy terms, Riehl "expected or intended" the pollution damage*fn10; and 5) whether any third-party claims have been made against Riehl. Only after all the necessary factual questions have been answered will the district court be able to determine inter alia: 1) what event constitutes an "occurrence" for purposes of the policy; 2) which policies are implicated thereby; and 3) the extent, if any, of Travelers' liability.

We therefore will reverse the grant of summary judgment dated August 7, 1985, and remand the case to the district court for trial. Travelers' motion to supplement the record with the affidavit of Richard C. Bargon dated March 4, 1985, is granted.

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