INDALEX INC. f/k/a, and successor by merger to, INDALEX AMERICA INC. f/k/a CARADON AMERICA INC.; INDALEX LIMITED f/k/a CARADON LIMITED; HARLAND CLARKE HOLDINGS CORP. f/k/a CLARKE AMERICAN CORP. f/k/a, and successor by merger to, NOVAR USA INC. f/k/a CARADON USA INC. f/k/a CARADON INC., Appellants
NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA, Appellee APPEAL OF: INDALEX INC. AND HARLAND CLARKE HOLDINGS CORP.
Appeal from the Order Entered March 7, 2012, In the Court of Common Pleas of Allegheny County, Civil Division, at No. G.D. 06-21147.
BEFORE: DONOHUE, SHOGAN and WECHT, JJ.
Indalex Inc. (formerly known as, and successor by merger to, Indalex America Inc. formerly known as Caradon America Inc.) and Harland Clarke Holdings Corp. (formerly known as Clarke American Corp., formerly known as, and successor by merger to, Novar USA Inc. formerly known as Caradon USA Inc. formerly known as Caradon Inc.) (collectively "Appellants") appeal from the order entered on March 7, 2012, in the Allegheny County Court of Common Pleas that granted summary judgment in favor of National Union Fire Insurance Company of Pittsburgh, Pennsylvania, ("Appellee") in this insurance coverage dispute. After careful review, we reverse and remand for further proceedings consistent with this opinion.
In their First Amended Complaint filed on July 13, 2007, Appellants alleged they were entitled to coverage from Appellee under a commercial umbrella policy. Appellants' claims stem from multiple out-of-state lawsuits filed by homeowners and property owners. OneBeacon Insurance Group, pursuant to a primary policy of insurance with Appellants, had provided a defense and indemnity in the underlying lawsuits until November of 2005, when the limits of that policy were exhausted. Appellees' Motion for Summary Judgment, 1/14/11, Exhibit W. The underlying lawsuits claimed that Appellants' windows and doors were defectively designed or manufactured and resulted in water leakage that caused physical damage, such as mold and cracked walls, in addition to personal injury. Appellees' Motion for Summary Judgment, 1/14/11, Exhibit C at ¶ 36, 38, Exhibit F at ¶ 24, and Exhibit R at ¶¶ 24, 76, 79, and 84. The out-of-state claims against Appellants were based on strict liability, negligence, breach of warranty, and breach of contract. Appellee countered that it was not required to provide coverage because under Pennsylvania law there was no occurrence triggering coverage. On January 14, 2011, Appellee filed a motion for summary judgment that the trial court granted in an order filed on March 7, 2012. The trial court concluded that Kvaerner Metals Division of Kvaerner U.S., Inc. v. Commercial Union Ins. Co., 908 A.2d 888 (Pa. 2006), barred coverage. Trial Court Opinion, 3/8/12, at 22. On April 5, 2012, Appellants timely appealed.
1. Did the trial court err in ruling that [Appellee] has no obligation to defend or indemnify [Appellants] under the terms and conditions of the commercial umbrella policy issued by [Appellee] for the period from October 1, 1998 to October 1, 1999 [("the policy")]?
a. Did the trial court err in characterizing the Underlying Lawsuits as involving solely "faulty workmanship" and therefore as not constituting an "Occurrence, " as defined in [the policy]?
b. Did the trial court err by failing to recognize that the Underlying Lawsuits pleaded tort-based products liability claims involving damage to property other than the doors and windows themselves and therefore are clearly covered under [the policy], when read as a whole?
c. Did the trial court fail to engage in a proper duty to defend analysis, relying improperly on Pennsylvania's gist of the action doctrine to ignore legally viable tort claims against product manufacturers pleaded under the law of foreign states, which trigger a duty to defend?
Appellants' Brief at 4. As Appellants' issue and sub-issues are interrelated, we will address them concurrently.
Our scope and standard of review of an order granting summary judgment are well settled.
We view the record in the light most favorable to the nonmoving party, and all doubts as to the existence of a genuine issue of material fact must be resolved against the moving party. Only where there is no genuine issue as to any material fact and it is clear that the moving party is entitled to a judgment as a matter of law will summary judgment be entered. Our scope of review of a trial court's order granting or denying summary judgment is plenary, and our standard of review is clear: the trial court's order will be reversed only where it is established that the court committed an error of law or abused its discretion.
NASDAQ OMX PHLX, Inc. v. PennMont Securities, 52 A.3d 296, 303 (Pa.Super. 2012).
When interpreting an insurance policy, we first look to the terms of the policy. "When the language of the policy is clear and unambiguous, we must give effect to that language." Donegal Mut. Ins. Co. v. Baumhammers, 938 A.2d 286, 290 (Pa. 2007) (quoting Kvaerner, 908 A.2d at 897). "However, 'when a provision in the policy is ambiguous, the policy is to be construed in favor of the insured….'" Id. Also, we do not treat the words in the policy as mere surplusage and, if at all possible, we construe the policy in a manner that gives effect to all of the policy's language. Teno v. State Farm Ins. Co., 716 A.2d 626, 631 (Pa.Super. 1998) (citing General Mills, Inc. v. Snavely, 199 A.2d 540, 544 (Pa.Super. 1964)).
We then compare the terms of the policy to the allegations in the underlying complaint. "It is well established that an insurer's duties under an insurance policy are triggered by the language of the complaint against the insured." Kvaerner, 908 A.2d at 896. In determining whether an insurer's duties are triggered, the factual allegations in the underlying complaint are taken as true and liberally construed in favor of the insured. "It does not matter if in reality the facts are completely groundless, false or fraudulent. It is the face of the ...