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VALE CHEMICAL COMPANY v. HARTFORD ACCIDENT AND INDEMNITY COMPANY (10/17/86)

decided: October 17, 1986.

VALE CHEMICAL COMPANY, APPELLEE,
v.
HARTFORD ACCIDENT AND INDEMNITY COMPANY, APPELLANT AT NO. 138 AND TRANSAMERICA INSURANCE COMPANY, AND MANUFACTURERS' CASUALTY INSURANCE COMPANY, APPELLANTS AT NO. 139



Appeal from Order of Superior Court of Pennsylvania, at Nos. 169 and 170, Philadelphia 1983, Affirming Order of Court of Common Pleas of Lehigh County at No. 81-C-493 Civil 340 Pa. Superior Ct. 510, Nix, C.j., and Larsen, Flaherty, McDermott, Hutchinson, Zappala and Papadakos, JJ. McDermott, J., files a concurring opinion.

Author: Hutchinson

[ 512 Pa. Page 291]

OPINION OF THE COURT

Transamerica Insurance Company ("Transamerica") and Hartford Accident and Indemnity Company ("Hartford") appeal by allowance a Superior Court order which affirmed the Court of Common Pleas of Lehigh County in this declaratory judgment action. Common Pleas held that both appellants had issued liability policies whose coverage required them to provide appellee both defense and indemnification

[ 512 Pa. Page 292]

    for an Illinois plaintiff's products liability action in Illinois. Plaintiff brought that action for cancer which she claimed to suffer as a result of appellee's manufacture and sale of the drug diethylstilbestrol ("DES") to her mother during pregnancy. Because the Illinois plaintiff, an indispensable party, was not joined, we reverse for lack of subject matter jurisdiction.

Appellee, Vale Chemical Company ("Vale"), filed this action to determine whether appellant insurance companies were required to defend the action filed against Vale in Illinois and to indemnify it for liability. In Illinois, Sandra Smith had sued Vale and all other manufacturers of the drug DES for damages, after she was diagnosed as suffering from vaginal cancer allegedly caused by her mother's use of DES during pregnancy. Manufacturers' Casualty Insurance Company, appellant Transamerica Insurance Company's predecessor in interest, provided liability coverage for Vale at the time Ms. Smith's mother took DES. Hartford covered Vale at the time Smith was diagnosed as having cancer.

Vale brought this action under our Declaratory Judgments Act, 42 Pa.C.S. §§ 7531-7541, to determine whether its insurance contracts with appellants required them to defend Vale and indemnify it against Smith's claim. Common Pleas held that both companies were required to provide a defense because there was scientific evidence to show that Smith suffered bodily injury at the time of her mother's exposure to DES and also at the time the cancer was diagnosed in her body, some twenty-five years later.

[ 512 Pa. Page 293]

Superior Court affirmed that decision on a different theory. It held there was continuous exposure to the effects of DES for those twenty-five years and that all insurers who cover a party during the period of exposure are responsible for providing a defense. In so doing, Superior Court expressly adopted the "multi-trigger" theory of liability. See, e.g., Keene Corp. v. Insurance Company of North America, 667 F.2d 1034 (D.C.Cir. 1981), cert. denied, 455 U.S. 1007, 102 S.Ct. 1644, 71 L.Ed.2d 875 (1982); Eli Lilly v. Page 293} Home Insurance Co., No. 82-0669, (D.D.C. April 12, 1984), appeal pending, No. 84-5391 (D.C.Cir.); A.C. & S. v. Aetna Casualty and Surety Co., 576 F.Supp. 936 (E.D.Pa. 1983). We granted Hartford's and Transamerica's petitions for allowance of appeal and now hold that Common Pleas lacked jurisdiction to issue a declaratory judgment on this record. Therefore, we vacate Superior Court's order and remand to Common Pleas with directions to dismiss appellee's suit for lack of subject matter jurisdiction.

At oral argument, all parties were directed to file supplemental briefs concerning a jurisdictional issue not raised in any court below: whether under our Declaratory Judgment Act the court can hear the case if the injured party is not joined. Our Declaratory Judgments Act states:

§ 7540. Parties

(a) General rule. -- When declaratory relief is sought, all persons shall be made parties who have or claim any interest which would be affected by the declaration, and no declaration shall prejudice the rights of persons not parties to the proceeding.

42 Pa.C.S. § 7540. In Carlsson v. Pennsylvania General Insurance Co., 417 Pa. 356, 207 A.2d 759 (1965), we were presented with an identical issue. There, appellants sought to have their insurance company defend personal injury claims against them and to pay claims under the policy. We held that the failure to join the plaintiffs in the personal injury claims was a fatal defect, citing the predecessor to 42 Pa.C.S. § 7540 and Keystone Insurance Co. v. Warehousing Equipment Corp., 402 Pa. 318, 165 A.2d 608 (1960). In Pleasant Township ...


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