ARMSTRONG WORLD INDUSTRIES, INC.
TRAVELERS INDEMNITY COMPANY, TRAVELERS CASUALTY AND SURETY COMPANY, AND CENTURY INDEMNITY COMPANY. APPEAL OF: TRAVELERS INDEMNITY COMPANY AND TRAVELERS CASUALTY AND SURETY COMPANY
Appeal from the Order entered December 30, 2013 In the Court of Common Pleas of Lancaster County Civil Division at No: CI-12-06271.
BEFORE: FORD ELLIOTT, P.J.E., SHOGAN, and STABILE, JJ.
Appellants/defendants Travelers Indemnity Company and Travelers Casualty and Surety Company appeal from the December 30, 2013 order of the Court of Common Pleas of Lancaster County (trial court), which overruled Appellants' preliminary objections in favor of Appellee/plaintiff Armstrong World Industries, Inc. Upon careful review, we quash this appeal as interlocutory.
This case was initiated by Appellants' denial of insurance coverage to Appellee for environmental damage allegedly caused by the release of polychlorinated biphenyls (PCBs) to the site of Appellee's manufacturing facility in Macon, Georgia (Macon Site). In denying coverage, Appellants reasoned that Appellee had released
the environmental claim at issue under a settlement agreement executed by the parties on May 20, 1998 (Settlement Agreement).
On June 20, 2012, Appellee filed a complaint against Appellants, alleging breach of contract and bad faith under Section 8371 of the Judicial Code, 42 Pa.C.S.A. § 8371, and seeking declaratory relief. Specifically, with respect to the declaratory relief, Appellee sought a declaration that Appellants are bound by certain insurance policies by which they allegedly agreed to pay or indemnify Appellee for environmental damage related to the Macon Site.See Complaint, 6/20/12, ¶ 2, 25. Appellee also sought a declaration that, under the insurance policies, Appellants are obligated to defend or pay Appellee's defense costs in connection with liability related to the Macon Site. See id. at ¶ 34.
On August 8, 2012, Appellants filed preliminary objections to the complaint under Pa.R.C.P. No. 1028(a)(6), alleging that the dispute at the heart of Appellee's action is governed by an alternative dispute resolution (ADR) provision of the Settlement Agreement. In support of this allegation, Appellants argued that under the plain language of the Settlement Agreement, the parties were required to submit the dispute at issue to the ADR process provided for in the Settlement Agreement, which incorporated ADR procedures from the June 19, 1985 " Agreement Concerning Asbestos-Related Claims," referred to by the parties as the " Wellington Agreement." See Preliminary Objections, 8/8/12, at ¶ 17. Additionally, Appellants argued that, to the extent there is a dispute over the applicability, interpretation, or performance of the Settlement Agreement, such dispute also must be submitted to the ADR process. Id. The ADR provision of the Settlement Agreement provides in relevant part:
To the extent any disputes arise with respect to the application, interpretation or performance of this Agreement, the Parties agree to resolve such disputes in accordance with the alternative dispute resolution procedures set forth in Appendix C to the Wellington Agreement. For purposes of the previous sentence, " any disputes" include dispute over whether a particular matter is subject to alternative dispute resolution pursuant to this [Settlement Agreement].
Settlement Agreement, 5/20/98, at ¶ 11.1. As noted, the ADR provision of the Settlement Agreement incorporated ADR procedures from the Wellington Agreement. Specifically, Appendix C to the Wellington Agreement provides for a range of ADR methods, from negotiation to binding or non-binding arbitration. As explained in the introductory paragraph of Appendix C:
Alternative Dispute Resolution (" ADR" ) is the method for resolving disputed issues as provided in the [Wellington] Agreement. ADR involves three
basic stages: 1) good-faith negotiation; 2) a proceeding concluding with a binding decision if litigation is not allowed and a non-binding decision if litigation is allowed (the " Proceeding" ); and 3) an ...