Pa. Manufacturers' Ass'n Ins. Co. v. Johnson Matthey, Inc.

IN THE SUPREME COURT OF PENNSYLVAN|A M|DDLE DISTR|CT PENNSYLVAN|A MANUFACTURERS' : No. 24 l\/lAP 2017 ASSOC|AT|ON lNSURANCE COl\/lPANY, ' : Appea| from the Order of the Appel|ant : Commonwea|th Court at No. 330 l\/lD ' 2015 dated Apri| 21, 2017. JOHNSON |\/|ATTHEY, |NC. AND PENNSYLVAN|A DEPART|\/|ENT OF ENV|RON|V|ENTAL PROTECT|ON, Appe||ees PER CUR|AM DEC|DED: July18, 2018 The Court orders as folloWs: Appe|lant Pennsylvania l\/lanufacturers’ Association insurance Company (“|nsurer”) is attempting to appeal a Commonwealth Court order that denied lnsurer’s motion for summary relief. For the reasons that fo||oW, We conclude that the order is interlocutory and unappealable at this time. Consequent|y, We quash the appeal. By Way of background, insurer filed a petition for review in the Commonwea|th Court’s original jurisdiction, naming as respondents Appe|lees Johnson |Vlatthey, lnc. (“Jl\/||”) and the Pennsylvania Department of Environmental Protection (“DEP”). |n its petition, lnsurer brought a claim pursuant to the Declaratory Judgments Act (“DJA”), 42 Pa.C.S. §§ 7531-7541. Specifica|ly, insurer requested that the court enter an order declaring that lnsurer has no obligation to defend or indemnify Jl\/ll in connection With a lawsuit filed by the DEP against Jl\/ll in the United States District Court for the Eastern District of Pennsylvania1 ln the underlying action, the DEP is seeking costs for the remediation of environmental damage caused at a site where Jl\/ll and its predecessors manufactured metal alloy tubing ln response to lnsurer’s petition, Jl\/ll filed, inter alia, a counterclaim seeking a declaration that insurer has a duty to pay all defense and indemnity costs related to the site, subject to the liability limits of the unexhausted policies, and that all remedial investigation costs incurred by Jl\/ll were properly payable under the policies as defense costs. Jl\/ll also advanced a breach of contract claim.2 lnsurer filed a motion for summary relief, which it styled as a motion for summary judgment.3 ln moving for summary relief, lnsurer argued that it was entitled to the declaratory relief it sought in its petition for review. The Commonwea|th Court issued an order denying the motion and offered a published opinion in support of its order. Pennsylvania Manufacturers’/-lss’n /ns. Co. v. Johnson Matthey, lnc., 160 A.3d 285 (Pa. melth. 2017). ln its opinion, the court stated7 in relevant part, that lnsurer “is not entitled to a declaratory judgment that it has no duty to defend or indemnify Jl\/|l.” ld. at 294. Notably, in disposing of lnsurer’s motion for summary relief, the Commonwea|th Court did 1 Commonwea/th of Pennsylvania Depan‘ment of Environmental Protection v. Whittaker Corporaf/'on and Johnson Matthey, /nc., Civil Action No. 08-6010. We will refer to this lawsuit as “the underlying action.” 2 While insurer and J|\/ll brought claims against the DEP in the Commonwea|th Court, neither party sought relief against the DEP. Rather, the parties joined the DEP as a party to comply with this Court’s decision in \/ale Chemical Co. v. HarffordAccident & /ndemnity Co., 516 A.2d 684 (Pa. 1986). 3 ln response to lnsurer’s motion for summary relief, Jl\/ll highlighted that the discovery process was ongoing insurer laterfiled an application to stay discovery |n an order filed l\/lay 16, 2016, the Commonwea|th Court granted in part lnsurer’s application. While the court allowed discovery to proceed with respect to some of JMl’s first set of interrogatories and document requests, the court stayed the balance of discovery pending its disposition of lnsurer’s motion for summary relief Order, 3/16/2016. [24 lviAP 2017] - 2 not address JMl’s counterclaims, including its declaratory judgment claim related to the scope of lnsurer’s duty to defend and indemnify Jl\/ll in the underlying action. insurer timely filed a notice of appeal and a jurisdictional statement This Court subsequently issued an order directing the parties to address whether this Court has jurisdiction over the appeal and deferring a determination concerning jurisdiction to consideration of the parties’ briefs The parties have complied with this directive Accordingly, the matter is ripe for disposition Whether this Court has jurisdiction to entertain this appeal presents a threshold issue. Burger v. Schoo/ Bd. of McGuffey School Dist., 923 A.2d 1155, 1161 (Pa. 2007). Such an issue raises a question of law; accordingly, our standard of review is de novo, and our scope of review is plenary. See Com., Dep’t of Envt/. Prot. v. Cromwe/l Twp., Huntingdon ny., 32 A.3d 639 , 646 (Pa. 2011) (“The question whether a court has jurisdiction is de novo, and the scope of review is plenary."). Generally speaking appellate courts have jurisdiction to entertain appeals from final orders entered at the trial court level. Commonwea/th v. Scarborough, 64 A.3d 602, 608 (Pa. 2013). Ordinarily, a final order disposes ofall claims and ofall parties Pa.R.A.P. 341(b)(1). However, Pa.R.A.P. 311(a)(8) states that an “appeal may be taken as of right and without reference to Pa.R.A.P. 341(c) from . . . [a]n order that is made final or appealable by statute or general rule, even though the order does not dispose of all claims and of all parties.” lmportantly, Section 7532 of the DJA provides that courts of record have the power to declare the rights, status, and other legal relations and that “such declarations shall have the force and effect of a final judgment or decree.” 42 Pa.C.S. § 7532. ln Northwide Mutual lnsurance Co. v. l/l/ickett, 763 A.2d 813 (Pa. 2000), a trial court order declared the rights of the plaintiffs relative to some, but not all, of the [24 l\/|AP 2017] ~ 3 defendants Although the order did not dispose of all claims and of all parties, this Court nonetheless held that the order was final and appealable pursuant to Pa.R.A.P. 341 (b)(2) (rescinded), which was the predecessor to Pa.R.A.P. 311(a)(8),4 and Section 7532 of the DJA. Regarding this Court’s jurisdiction over this appeal, the crux of lnsurer’s argument is that l/l/ickett dictates that the Court has jurisdiction to entertain the merits of its claim that the Commonwea|th Court erred by denying its motion for summary relief.5 JlVll, on the other hand, contends that this Court’s more recent decisions addressing the appealability of an order declaring the rights of parties suggest that the Commonwea|th Court’s order is interlocutory and unappealable because the order only partially declared the rights of the parties We agree with Jl\/l|. This Court last expounded upon the appealability of an order declaring the rights of parties in United States Organizations for Bankruptcy Alterr)atives, /nc. v. Department of Banking (“USOBA”), 26 A.3d 474 (Pa. 2011). ln that decision, the Court provided a rather straightforward two-part test for appellate courts to apply when considering whether 4 Effective April 1, 2016, Rule 311(a)(8) replaced Rule 341(b)(2). Howeverl the rules are functionally equivalent in that they both explain that an order is final if it is defined as final by statute. 5 ln the alternative, insurer contends that the Court can grant allowance of appeal in this matter pursuant to Pa.R.A.P. 1114. lnsurer’s Brief at 20-26. lnsurer’s argument is misplaced. The Rules of Appellate Procedure make clear that, where (such as here) the Commonwea|th Court enters an order in a matter commenced in its original jurisdiction, Rule 1114 is inapplicable; rather, an appeal from that order should be addressed to this Court. See Pa.R.A.P. 1101(a)(1) (“This rule applies to any appeal to the Supreme Court from an order ofthe Commonwea|th Court entered in . . . [a]ny matter which was originally commenced in the Commonwea|th Court and which does not constitute an appeal to the Commonwea|th Court from another court, a magisterial district judge or another government unit.”); Pa.R.A.P. 1114(a) (“Except as prescribed in Pa.R.A.P. 1101 (appeals as of right from the Commonwea|thrCourt), review of a final order of the Superior Court or the Commonwea|th Court is not a matter of right, but of sound judicial discretion, and an appeal will be allowed only when there are special and important reasons therefor.”). [24 iviAP 2017] - 4 an:order~declaring the rights of parties is final and appealable: ('1) what is the effect of the lower court’s decision on.the scope of the litigation; and (2)_what practical effect does the-court’s decision have on'the ultimate outcome of the case USOBA, 26 A.3d at 4:79 (“The prevailing considerations in [Pennsylvan/'a Bankers Ass’n v. Pennsylvania'Dep_’t of Bank/`ng (“Pennsy/vania Bankers”), 948 A.2d 790 (Pa. 2008),] were the effect of the lower oou`rt’s decision on the scope of the litigation and the practical effect'on the ultimate decision in the case.”). lfthe order in question merely narrows the scope of the litigation and does not resolve the entirety of the paities’ eligibility for declaratory relief, then the order is interlocutory and not immediately_appealable. See /'d. at 480.("‘l-iere, however, the constitutionality of multiple provisions remains in dispute 7and, even though the Commonwealth Court granted _US»OBAv relief as to two provisions, the dispute has not been resolved but merely narrowed-. Ther'efore-, the Pennsylvania Bahkers decision is relevant and dispositive.”). ‘ln this matter, the Commonwea|th Court has entered an order that effectively denied insureds claim for declaratory relief l-lowever, Jl\/ll’s related, but broadery counterclaim-for deciarato'ry relief finally resolving lnsurer’s obligations to defend and indemnify _Jl\/ll remains pending in the Commonwealth Court. Consequently, the court’s order does not resolve the parties’l competing ciaims for declaratory relief; rather, it merely narrows the dispute Thus, consistent with Pennsylvania Bankers and U.SOBA, the order is not appealable at this time. This outcome comports with this Court’s long-standing and well-founded policy againstpiecemea| litigationl Pennsylvania Bankers, 948 A.2d at 798 - 99. i-'or these reasons, we quash this appeal. Chief Ju~stice Saylor files a dissenting statement in which Justice Todd joins r24 iviAr> 2017] _ 5