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Titeflex Corp. v. National Union Fire Ins. Co. of Pittsburgh, PA

Superior Court of Pennsylvania

March 5, 2014

TITEFLEX CORPORATION
v.
NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA, THOMAS WAGNER AND THOMAS WAGNER, INC.; NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA, THOMAS WAGNER AND THOMAS WAGNER, INC.
v.
TITEFLEX CORPORATION, APPEAL OF: NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA

Argued April 13, 2013.

Page 971

Appeal from the Order of the Court of Common Pleas, Philadelphia County, Civil Division, No(s): March Term, 2007 No. 003963. Before McINERNEY, J.

John J. Hatzell, Jr., Philadelphia and Laura A. Foggan, Washington, D.C., for appellant.

Andrew S. Gallinaro, Philadelphia and Patricia Barald, Wahsington, D.C., for Titeflex, appellee.

John Mattioni, Philadelphia, for Wagner, appellee.

BEFORE: PANELLA, J., OLSON, J., and STRASSBURGER, J.[*] OPINION BY STRASSBURGER, J. Judge Olson concurs in the result.

OPINION

Page 972

STRASSBURGER, J.

National Union Fire Insurance Company of Pittsburgh, PA (NUFIC) appeals from the order entered by the trial court on June 22, 2012, which ordered that NUFIC had a duty to defend Titeflex Coproration (Titeflex) in certain Underlying Actions pending in Montgomery County, Pennsylvania.

Upon review, we affirm.

The trial court summarized the underlying facts as follows.

Titeflex manufactured a flexible connector that was installed and used at a Montgomery County gas station owned by Thomas F. Wagner and Thomas F. Wagner, Inc. (collectively, " Wagner" ).1

1 Wagner was formerly made a party to this action, but [on September 27, 2010,] the [trial] court granted Wagner's motion to be dismissed from this case.

In the Spring of 1998, gasoline leaked from Wagner's property onto neighboring properties. As a result, many neighbors filed lawsuits against Wagner, Titeflex, and other manufacturers and installers of products at Wagner's gas station (collectively, the " Underlying Actions" ). Wagner filed cross-claims

Page 973

 against Titeflex in the Underlying Actions.

Titeflex's primary insurer for the August 1, 1997-1998 policy year (and for prior and subsequent policy years) was Kemper under a Commercial General Liability Policy with a limit of $1 million per occurrence and an aggregate limit of $2 million. NUFIC was Titeflex's excess insurer during the August 1, 1997-1998 policy period (and in other years as well) under an umbrella policy with a limit of $50 million per occurrence and an aggregate limit of $100 million (the " Excess Policy" ).
Kemper initially provided a defense to Titeflex in the Underlying Actions pursuant to the terms of its primary policy. Kemper subsequently experienced financial difficulties, and Titeflex ultimately assumed and paid for its own defense in the Underlying Actions. In 2007, as part of a settlement of plaintiffs' claims against Titeflex in the Underlying Actions, Kemper and Titeflex together paid $1 million. In addition, NUFIC paid over $9 million towards the settlement under its Umbrella Policies. The Montgomery County court approved those portions of the settlement involving minors' claims and the claims of certain estates.
Wagner's cross-claims were not part of the settlement, and they remain pending against Titeflex [in Montgomery County, PA].

Trial Court Opinion, 10/24/2012, at 1-3 (some footnotes omitted).

On March 30, 2007, Titeflex filed a complaint seeking, inter alia, a declaratory judgment in the Court of Common Pleas of Philadelphia County against NUFIC, Wagner, and the plaintiffs in the Underlying Actions.[1] A second amended complaint asserted claims for declaratory relief against NUFIC with regard to its duty both to defend and indemnify Titeflex, as well as claims for breach of contract and bad faith. Titeflex also sought declaratory relief as to Wagner, in that any declaratory relief as to indemnification would also be binding on Wagner. See Second Amended Complaint, 8/3/2009. Damages sought included compensatory damages, attorneys' fees, interest, and punitive damages. On October 28, 2009, NUFIC filed an answer, new matter, and counterclaims, asserting two claims for declaratory relief as to the exhaustion of the Kemper policies and scope of coverage, as well as claims for breach of fiduciary duty, restitution,[2] and breach of contract.

On November 16, 2010, Titeflex filed a motion for partial summary judgment on the issue of NUFIC's duty to defend it in the Underlying Actions. On December 17, 2010, NUFIC filed a cross-motion for partial summary judgment against Titeflex regarding lack of proof of exhaustion of the Kemper policies, its primary insurance.

In an order dated June 21, 2012 and entered on June 22, 2012, the trial court granted Titeflex's motion for partial summary judgment on the duty to defend issue. The trial court also denied NUFIC's motion for partial summary judgment on the issue that Titeflex was unable to demonstrate

Page 974

exhaustion of the Kemper policies. In other words, it concluded that NUFIC was required to defend Titeflex against Wagner in the remaining portions of the Underlying Actions.

On July 13, 2012, NUFIC filed a notice of appeal to this Court from the trial court's order granting partial summary judgment in favor of Titeflex.[3]

I.

We first consider Titeflex's assertion this appeal should be quashed because the order being appealed from is not an appealable order. Titeflex's Brief at 12-16. NUFIC counters that this order declaring that NUFIC has a duty to defend Titeflex is appealable pursuant to Pa.R.A.P. 341(b)(2) because it is expressly defined as a final order by statute. Specifically, NUFIC asserts that 42 Pa.C.S. § 7532 governs because it provides that " declarations shall have the force and effect of a final judgment or decree." NUFIC's Brief at 1; NUFIC's Reply Brief at 18-22.[4]

We address this issue first because " the appealability of a particular order 'implicates the jurisdiction of the [appellate] [c]ourt requested to entertain the question.'" Giovagnoli v. State Civil Serv. Comm'n (Monroe Cnty. Children & Youth Servs.) , 581 Pa. 655, 868 A.2d 393, 397 n.4 (Pa. 2005) (citing Fried v. Fried , 509 Pa. 89, 501 A.2d 211, 212 (Pa. 1985)).

In support of its position that this appeal is properly before this Court, NUFIC relies on two separate lines of cases. First, NUFIC points to an en banc decision of this Court in Redevelopment Authority of Cambria County v. International Insurance Co. , 454 Pa.Super. 374, 685 A.2d 581 (Pa. Super. 1996). NUFIC's Reply Brief, at 18-21. In Redevelopment Authority , the trial court ruled that the insurance company had a duty to defend the Redevelopment Authority of Cambria County in an underlying action, but did not rule on whether the insurance company had a duty to indemnify. The trial court observed that " a decision on the duty to indemnify could

Page 975

await resolution of the underlying action[.]" Id. at 586. The insurance company appealed from that order, and the Redevelopment Authority filed a motion to quash the appeal. In declining to quash the appeal from that order as interlocutory, this Court reasoned that

in light of the express statutory provision in Section 7532 of the Judicial Code which provides that orders entered in declaratory judgment actions shall have the force and effect of a final order, and in light of the fact that counsel for appellant have diligently attempted to perfect the jurisdiction of this Court via both the procedure applicable to direct appeals as well as the procedure applicable to interlocutory appeals by permission, we find that we ...

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