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J.H. FRANCE REFRACTORIES COMPANY AND VAN BRUNT COMPANY v. ALLSTATE INSURANCE COMPANY (03/03/89)

decided: March 3, 1989.

J.H. FRANCE REFRACTORIES COMPANY AND THE VAN BRUNT COMPANY, APPELLANTS,
v.
ALLSTATE INSURANCE COMPANY, PENNSYLVANIA MANUFACTURERS' ASSOCIATION INSURANCE COMPANY, ST. PAUL INSURANCE COMPANY, U.S. FIRE INSURANCE COMPANY, WAUSAU INSURANCE COMPANY, AND ROCKWOOD INSURANCE COMPANY, APPELLEES. ALLSTATE INSURANCE CO., APPELLANT AT NO. 111, V. J.H. FRANCE REFRACTORIES COMPANY, APPELLANT AT NO. 109, PENNSYLVANIA MANUFACTURERS' ASSOCIATION INSURANCE COMPANY, APPELLANT AT NO. 110, ST. PAUL INSURANCE COMPANY, APPELLANT AT NO. 112, WAUSAU INSURANCE COMPANY, U.S. FIRE INSURANCE COMPANY, APPELLANT AT NO. 113, AND ROCKWOOD INSURANCE COMPANY. APPEAL OF PENNSYLVANIA MANUFACTURERS' ASSOCIATION INSURANCE COMPANY. APPEAL OF ST. PAUL INSURANCE COMPANY. APPEAL OF U.S. FIRE INSURANCE COMPANY



Appeal from the Judgment of the Superior Court of Pennsylvania, Philadelphia District, Appeal Nos. 1262 Phila. 1986, 1263 Phila. 1986, 1271 Phila. 1986, 1272 Phila. 1986, 1405 Phila. 1986, 1406 Phila. 1986, 1441 Phila. 1986, 1442 Phila. 1986, 1541 Phila. 1986, 1542 Phila. 1986, 1390 Phila. 1987 and 1391 Phila. 1987, entered April 6, 1988 vacating the Order entered April 18, 1986 in the Court of Common Pleas, Philadelphia County, Civil Action Nos. 3933, February Term, 1981 and 1146 January Term, 1984. Nix, C.j., and Flaherty, McDermott, Zappala, Papadakos and Stout, JJ. Larsen, J., did not participate in the consideration or decision of this case.

Author: Flaherty

[ 521 Pa. Page 93]

This case presents the question of whether the jurisdiction of a Common Pleas Court is defeated in a declaratory judgment action where all parties having claims are joined at the time of the action, but subsequently, additional claimants file suit against one of the parties and the additional claimants are not added as parties to the original declaratory judgment action.

The factual background of the case is that J.H. France Refractories Company (hereinafter J.H. France) and its now wholly-owned subsidiary, the Van Brunt Company, between 1956 and 1972 manufactured and marketed a product containing asbestos. J.H. France also marketed and continues to market products containing silica, which, like asbestos, is claimed to cause physical injury to those who breathe it. On April 19, 1979, Gladys Temple, administratrix of the estate of Charles Temple, filed suit against J.H. France, claiming that her decedent, Charles Temple, suffered from asbestos-related diseases contracted through exposure to J.H. France's asbestos-containing products from 1948 through 1978.

J.H. France was insured during various time periods relevant to this action by the Pennsylvania Manufacturers Association, St. Paul, Allstate, U.S. Fire, Wausau, and Rockwood Insurance Companies. Upon receipt of this suit, J.H. France presented the Temple claim to Allstate, St. Paul and PMA for defense and indemnity, the insurers who had provided coverage between 1967 and 1979. None of these

[ 521 Pa. Page 94]

    insurers agreed to defend or indemnify, and J.H. France undertook its own defense. In 1981 J.H. France filed this declaratory judgment action for the purpose of determining the insurers' duty to defend and indemnify against the Temple claim. Subsequent to the filing of this declaratory judgment action, additional asbestos and silica-related lawsuits were filed against J.H. France. Apparently because these actions were for injuries allegedly sustained during a time period which went beyond 1979 (into the 1980's), additional insurance companies became involved. In 1984, Allstate filed its own declaratory judgment action, naming PMA, St. Paul, U.S. Fire, Wausau and Rockwood Insurance Companies, as well as fourteen individuals who had filed asbestos or silica-related lawsuits after J.H. France filed its original declaratory judgment action. Still other asbestos or silica-related claims against J.H. France were filed after Allstate's declaratory judgment action was filed, and the claimants therein have not been joined in any pending action. J.H. France's and Allstate's declaratory judgment actions were consolidated, and the carriers who insured J.H. France during the relevant time periods have taken differing positions with respect to their duty to indemnify and defend. If a defense has been provided, it has been provided subject to reservation of rights.

The issues at trial were whether the various insurance companies were liable for the defense and indemnification of J.H. France for claims based on exposure to its products containing asbestos and silica, and if they were liable, how the liability was to be apportioned among the insurers. The various insurance contracts could be adjudicated in one action because the relevant language was virtually identical in all of the contracts. The trial court, acting on J.H. France's motion for summary judgment, worked out a scheme, not relevant here, in which the various insurers were required to defend and indemnify against asbestos or silica related claims made against J.H. France and determined that the insurers had not acted in bad faith in failing to defend or indemnify at an earlier time.

[ 521 Pa. Page 95]

Multiple appeals were filed in Superior Court challenging the substance of the trial court's determination, but Superior Court declined to address the merits of the case on the grounds that the lower court did not have jurisdiction because parties who had filed claims against J.H. France after the declaratory judgment actions were filed had not been included in the declaratory judgment action. 372 Pa. Super. 575, 539 A.2d 1345. Superior Court's holding was based on its reading of our decision in Vale Chemical Co. v. Hartford Accident and Indemnity Co., 512 Pa. 290, 516 A.2d 684 (1986), which Superior Court understood to require that in a declaratory judgment action, all parties, present and future, who might be affected by the decision must be joined. Various parties petitioned for allowance of appeal and we granted allocatur to address the propriety of Superior Court's determination that the court of common pleas was without jurisdiction to hear the case. For the following reasons, we reverse the order of Superior Court and remand for that court's determination of the substantive issues raised in the appeal.*fn*

Both J.H. France's and Allstate's declaratory judgment actions were brought pursuant to the Pennsylvania Declaratory Judgments Act, 42 Pa.C.S. § 7540, which provides:

§ 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.

Although J.H. France joined Temple as well as its insurance companies in the first declaratory judgment action, and Allstate joined not only the other insurance companies, but also J.H. France and fourteen claimants who had asserted asbestos-related claims after J.H. France filed ...


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