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METAL BANK AMERICA v. INSURANCE COMPANY NORTH AMERICA (01/30/87)

filed: January 30, 1987.

METAL BANK OF AMERICA, INC., APPELLANT,
v.
INSURANCE COMPANY OF NORTH AMERICA, PENNSYLVANIA MANUFACTURERS INSURANCE COMPANY AND LIBERTY MUTUAL INSURANCE COMPANY V. FEDERAL INSURANCE COMPANY AND HOME INSURANCE COMPANY V. GREAT AMERICAN INSURANCE COMPANY AND AMERICAN NATIONAL FIRE INSURANCE COMPANY, THE HARTFORD ACCIDENT & INDEMNITY COMPANY AND U.S. FIRE INSURANCE COMPANY, APPELLEES



Appeals From Orders Entered January 8, 1986 and February 26, 1986, Court of Common Pleas, Civil Division, Philadelphia County, No. 861 April Term, 1983

COUNSEL

John Mattioni, Philadelphia, for appellant.

Robert R. Reeder, Philadelphia, for Insurance Co. of North America, appellee.

Marjorie E. Greenfield, Philadelphia, for Liberty Mut. Ins., appellee.

Melvin R. Shuster, Philadelphia, Home Ins. Co., appellee.

Cavanaugh, McEwen and Beck, JJ.

Author: Cavanaugh

[ 360 Pa. Super. Page 352]

The appellant, Metal Bank of America, Inc., commenced a declaratory judgment action in April, 1983 against Liberty Mutual Insurance Company, Insurance Company of North America, and Pennsylvania Manufacturers Association Insurance Company. The Insurance Company of North America joined as additional defendants The Home Insurance Company and Federal Insurance Company. Subsequently, Home Insurance Company joined as additional defendants Great American Insurance Company, American National Fire Insurance Company and the Hartford Accident and Indemnity Company. Several other insurance companies were also joined as additional defendants.

In its declaratory judgment action, the appellant sought indemnification for investigation costs, attorneys fees and other expenses it incurred in defending a law suit brought in 1980 against Metal Bank, its parent corporation and two individual defendants, by the United States Environmental Protection Agency (EPA). It also sought reimbursement for all expenditures made by it in defense of the litigation and expenditures incurred arising from remedial actions taken by Metal Bank to satisfy an agreement which was reached with EPA in settlement of the litigation against it.

The appellees, Insurance Company of North America, Home Insurance Company and Liberty Mutual Insurance Company filed motions for summary judgment which were granted by the court below, DiBona, J. The appellant's motions for summary judgment were denied and it has appealed to this court.

A motion for summary judgment should be granted where the pleadings, discovery and affidavits reflect no genuine issue of material fact. Loyal Christian Benefit Association v. Bender, 342 Pa. Super. 614, 493 A.2d 760 (1985); Pa.R.C.P. 1035(b). A summary judgment should only be entered in those cases which are clear and free from doubt. Weiss v. Keystone Mack Sales, Inc., 310 Pa. Super. 425, 456 A.2d 1009 (1983). The court must accept as true all well-pleaded facts in the plaintiff's pleadings, and give

[ 360 Pa. Super. Page 353]

    the plaintiff the benefit of all reasonable inferences to be drawn therefrom. Spain v. Vincente, 315 Pa. Super. 135, 461 A.2d 833 (1983). However, a prima facie showing by the party seeking summary judgment, i.e., the production of enough evidence to demonstrate such party's entitlement to a judgment if evidence were uncontroverted at trial, shifts the burden of producing evidence to the party opposing the motion. In such circumstances summary judgment should be granted to the moving party unless the opposing party offers competent evidence admissible at trial showing that there is a genuine issue of material fact. Community Medical Services, Inc. v. Local 2665, 292 Pa. Super. 238, 437 A.2d 23 (1981).

In the instant case, it was established that Liberty Mutual Insurance Company had policies of insurance in effect which extended coverage to the appellant from August 1, 1968 to January 1, 1971 under a comprehensive general liability policy and from July 20, 1968 to January 1, 1971 under an excess liability policy. Home Insurance Company issued two policies to the appellant. Coverage under the first policy began on January 1, 1969 and ended on January 1, 1970. Coverage under the second policy began on September 30, 1973, and ended on January 1, 1975. The policies issued by both companies provided that notification of injuries or damages which would involve coverage under the policies had to be given as soon as practicable after the occurrence or event covered by the policy took place.*fn1

The underlying event which allegedly triggered responsibility on the part of the insurance companies occurred in or about August of 1972 when the Coast Guard notified the appellant that it was responsible for an oil spill on the Delaware River caused by a rupture in an underground storage tank. In October, 1972 the appellant wrote to the

[ 360 Pa. Super. Page 354]

Chief of Compliance, Department of Environmental Resources and denied that it was violating any rules of the Department of Environmental Resources but stated "While denying any violation as mentioned above, we do agree that industrial housekeeping at that location can be improved and we have accordingly taken the following action . . ." The letter went on to describe in detail the action Metal Bank was taking concerning the prevention of discharge of pollutants. The letter concluded "Please be assured of our strong interest in preventing any conditions that might give rise to any pollution incidents in the future." On November 1, 1972 the chief of Marine Safety Division of the United States Coast Guard wrote to Metal Bank of America stating inter alia: "A report has been received by this office that oil in harmful quantity was allegedly discharged into the navigable waters of the United States on 3 August 1972 from your facility at Philadelphia, Pennsylvania . . . Section 11(b)(5) of the Act [The Federal Water Pollution Control Act of 1956], states, in part, that the owner or operator of a facility or vessel from which oil is knowingly discharged shall be assessed a civil penalty of not more than $10,000.00 for each offense."

On May 13, 1973 the Chief of the Water Quality Branch, Delaware River Basin Commission, wrote to the appellant as follows:

On April 4, 1973 and again on May 1, 1973 we received reports that oil from the Metal Bank plant created oil pollution incidents on the Delaware River. We understand that a pile of transformers is stored on or near the river bank and that oil from these transformers may cause additional incidents.

Will you please explain how your plant recovers waste oil, where the oil is finally disposed of and what steps you have taken or plan to take to prevent oil spills and oil leaking from plant property.

During the period from 1973 to 1980 investigations were undertaken by the Federal Environmental Protection Agency and the Pennsylvania Department of Environmental Resources.

[ 360 Pa. Super. Page 355]

Various governmental agencies made demands on Metal Bank of America during these years. Metal Bank engaged in various and extensive negotiations with EPA relating to the seepage into the Delaware River. In its complaint for declaratory judgment the appellant contends that an underground tank which it owned sustained a leak prior to 1972 and ruptured in 1972 and this was the source of the oil seepage onto its property and ultimately into the Delaware River.*fn2 Finally, in April, 1980, EPA filed a complaint against Metal Bank in the United States District Court for the Eastern District of Pennsylvania claiming damages in excess of $2,000,000.00 caused by the discharge of hazardous ...


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