Pennsylvania Does Not Recognize Multiple Trigger Theory in Property Damage Cases, Appeals Court Decides

A Pennsylvania appellate court has ruled that Pennsylvania law does not recognize a multiple trigger theory in property damage cases. 

The Case                                                                       

After gasoline allegedly leaked from a gas station owned by Thomas F. Wagner and Thomas F. Wagner, Inc. (together, “Wagner”), onto neighboring properties, a number of neighbors sued Wagner and Titeflex Corporation, which had manufactured a flexible connector that had been installed and used at the station.

Wagner also brought cross-claims against Titeflex, alleging that Titeflex had to compensate him for damage to his property, loss of gasoline, destruction of his business, and the environmental clean-up costs for which he was liable.

Titeflex subsequently asserted claims for declaratory relief against its excess insurer with respect to its duty both to defend and indemnify Titeflex, as well as claims for breach of contract and bad faith.

The trial court granted Titeflex’s motion for partial summary judgment on the duty to defend issue, and the excess insurer appealed. Among other things, it argued that Pennsylvania law applied, and that Pennsylvania law provided for the application of a “multiple trigger” theory.

The Appellate Court’s Decision

The appellate court affirmed.

In its decision, the appellate court rejected the excess insurer’s argument that Pennsylvania would apply a “multiple trigger” theory in this case, explaining that it only applied the “multiple trigger” theory in latent disease cases, such as asbestosis or mesothelioma, because such injuries might not manifest themselves until a considerable time after the initial exposure causing injury had occurred. This case, the appellate court said, did not concern a toxic tort, but instead emanated from injuries alleged to have occurred as a result of one specific event, a gasoline leak.

It then concluded that the excess insurer’s duty to defend only was triggered once Titeflex had exhausted its underlying coverage.

The case is Titeflex Corp. v. National Union Fire Ins. Co. of Pittsburgh, Pa., No. 2047 EDA 2012 (Penn. Superior Ct. March 5, 2014).

Comment

The issue of multiple triggers in property damage cases soon may be resolved by the Pennsylvania Supreme Court. A key issue in a case pending before that court, Pennsylvania National Mut. Cas. Ins. Co. v. St. John, 53 A.3d 1316 (Pa. 2012), is whether the “multiple trigger” theory of liability insurance coverage that the court had adopted in J.H. France Refractories Co. v. Allstate Ins. Co., 626 A.2d 502 (Pa. 1993), should be applied to cases presenting continuous, progressive “property damage,” so that all policies on the risk from exposure to the harmful condition through “manifestation” of the injury would be triggered.  We are monitoring this case and will report on future developments as soon as they occur.