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LOWER PAXON TOWNSHIP v. UNITED STATES FIDELITY AND GUARANTY COMPANY (04/03/89)

filed: April 3, 1989.

LOWER PAXON TOWNSHIP, APPELLEE,
v.
UNITED STATES FIDELITY AND GUARANTY COMPANY, APPELLANT



Appeal from the Judgment entered on September 6, 1988, in the Court of Common Pleas of Dauphin County, Civil Division, at No. 3664 S, 1984.

COUNSEL

F. Lee Shipman, Harrisburg, for appellant.

Richard H. Wix, Harrisburg, for appellee.

Beck, Kelly and Hester, JJ.

Author: Beck

[ 383 Pa. Super. Page 559]

This is an appeal from a judgment entered on a verdict for appellee Lower Paxton Township (the "Township") in its action for coverage under a comprehensive general liability

[ 383 Pa. Super. Page 560]

    policy issued by appellant United States Fidelity and Guaranty Company ("USF & G") to the Township. The Township sought coverage for various expenses it incurred in remedying a problem arising from methane gas that was emanating from a landfill owned by the Township.

Although numerous issues are presented, the dispositive issue concerns the proper construction of the policy's pollution exclusion and the application of this exclusion to the facts of this case. The pollution exclusion excludes coverage for any bodily injury or property damage arising out of the discharge, dispersal, release or escape of pollutants, including gases, unless the discharge, dispersal, release or escape is "sudden and accidental."

Since we find that there is no record evidence that could lead a jury reasonably to find that the methane gas dispersal that gave rise to the Township's claimed damages was "sudden", we grant judgment n.o.v. in favor of USF & G. The basis for this decision is our punctilious review of the record, which we have conducted with constant vigilance to our limited duty in reviewing a denial of judgment n.o.v.:

Walasavage v. Marinelli, 334 Pa. Super. 396, 483 A.2d 509, 514-15 (1984).

Viewed in this manner, the record reveals the following facts. In 1961, the Township began operating a sanitary landfill located in the southeast portion of the Township. The landfill occupies approximately 35 acres. Along the northern border of the landfill is Conway Road, with homes located on both sides of the road. One of these homes, 6621 Conway Road, is owned by Mr. and Mrs. Fleming. The Fleming home is located between the northern edge of the landfill and Conway Road.

[ 383 Pa. Super. Page 561]

A by-product of the natural decomposition of organic material in the refuse buried at the landfill is methane gas, an odorless, colorless gas that ventilates into the atmosphere through the cover soil on the landfill or migrates laterally underground. The record contains the following description, authored by the Township's engineering firm, of the process through which methane gas forms and enters the atmosphere:

Organic components of landfilled solid waste decompose by a combination of biological, chemical and physical processes. Within the confines of a landfill, these processes occur simultaneously. The composition of landfill gas develops through an evolutionary process as waste experiences first aerobic (characterized by the presence of free oxygen) and then anaerobic (featuring the lack of oxygen) environments. The major constituents of landfill gas are methane and carbon dioxide . . . . After six months to a year, methane gas concentrations in the landfill gases rise to about 45 to 50 percent, remaining relatively constant through the period of active gas production. Gas production, and its methane component, will take many years to complete and is principally dependent upon refuse composition and moisture content. It is generally accepted that typical landfills, containing mostly municipal solid waste, will produce gas for between 20-40 years . . . .

Methane gas can explode at certain concentrations and can adversely affect the health of those exposed to it at even lower concentrations.

During the 1970's, the Township became aware of the phenomenon of methane gas production at landfills, but was not aware of any specific problem with methane gas migrating from its own landfill and had taken no steps to control any such possible migration. However, by letter dated May 4, 1981, the Department of Environmental Resources notified the Township that methane gas was migrating off the

[ 383 Pa. Super. Page 562]

    landfill at dangerously high levels.*fn1 The Township immediately hired Gannett Fleming Corddry and Carpenter, Inc., an engineering firm, to evaluate gas production and migration at the landfill. Their initial report, dated August 11, 1981, indicates that Gannett Fleming's testing revealed strong concentrations of gas at the north end of the landfill, along Conway Road. The report further states that these tests are a ". . . strong indication of LFG [gas] migration across Conway Road toward the nearby residential community."

Gannett Fleming recommended the immediate installation of a gas migration control system along the northern edge of the landfill. This system, which was installed in the spring of 1982, consisted of a perforated pipe laid horizontally in a trench of crushed stone and a standpipe to vent the collected gas into the atmosphere.

This perforated pipe system, sometimes referred to as a trench barrier, was recommended by Gannett Fleming as a first step toward addressing the gas problem at the landfill. Gannett Fleming's August 11, 1981 report also recommended that additional venting be installed at locations all over the fill and, after monitoring of the gas production at these vents, that a ". . . permanent [gas] collection and control system be designed."

During the remainder of 1982, Gannett Fleming, the Township, and the Township's own engineers, Herbert, Rowland and Grubic, Inc. (the "Rowland firm"), continued to monitor and study the methane gas situation at the landfill. Gannett Fleming monitored the gas production at sites all over the fill, largely to ascertain whether it would be advisable for the Township to install a system of gas collection so that the gas could be sold for commercial use. Both Gannett Fleming and the Rowland firm also monitored the gas situation at the north end of the fill to determine the effectiveness of the trench barrier. Although the

[ 383 Pa. Super. Page 563]

Township expected that the barrier would be effective in controlling gas migration in that area, as of October 22, 1982 Gannett Fleming preliminarily reported to the Township that its monitoring of the fill indicated only that ". . . the trench barrier is moderately effective in controlling the gas migration northward toward Conway Road." This report indicates that gas readings at probe G-6, the one closest to the Fleming home, ranged from 15% to 0% in the period from June 22, 1982 to September 14, 1982.

The Rowland firm's own test results were reported to the Township on December 10, 1982. This report includes testing data from October and November of 1982, when gas was consistently detected at Probe G-6. In October the gas levels ranged from 15% to 25% and in November from 18% to 27%. The report also included the Rowland firm's recommendations regarding the methane gas problem, including the following:

We recommend that several additional monitoring points be established to further evaluate this area. These probes should be installed at the north side of Conway Road, and we recommend that 3 additional probes be installed on private property at 6621 Conway Road [the Fleming home] to monitor any possible migration.

At trial, Mr. Rowland, the author of the foregoing report, testified that he recommended the installation of these additional probes because of his concern for possible migration in that direction. He was also concerned that the Township still did not know exactly where the outer limits of the fill itself were and had only recently discovered that some waste was actually located under Conway Road, whereas the Township had long thought that the fill material stopped at the edge of the road. Mr. Rowland wanted to ascertain whether there was waste extending even further past the trench barrier and the road, since any such waste could be emitting gas that could not be controlled by the trench barrier.

On December 15, 1982, just five days after the Rowland firm report was submitted, the Department of Environmental

[ 383 Pa. Super. Page 564]

Resources notified the Township that the basement of the Fleming home contained a dangerous level of methane gas. Shortly before December 15th, the DER had received an anonymous telephone call indicating that the caller had been in the Fleming home and had smelled gas.*fn2 DER could not immediately identify where the Fleming home was, since the caller had mistakenly stated that it was located in a different township. When DER finally ascertained that the property was in Lower Paxton, and was in fact at the edge of the landfill, they immediately tested the Fleming home and found a 28% level of gas in the basement.

The Township immediately made expenditures to correct the problem in the Fleming home, including sealing the basement and installing vents around the foundation of the home. An inspection of the basement revealed a sump pump in the basement floor lined with an old coal bucket which had rusted through. It was thought that this opening in the cement floor had provided the opening through which the gas had entered the home. There was no testimony or any other evidence as to when the bucket had rusted, nor was there evidence ...


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