PA Supreme Court Declines To Extend Multiple Trigger Theory To Property Damage Claims

Where an insured loss causes damages that straddle multiple policy periods, insurers and insureds must determine which policies are implicated. Clear rules regarding "trigger" of coverage benefit policyholders seeking to invoke coverage, an insurer gauging its own duties, or an insurer pursuing contribution from other carriers issuing successive policies. In Pennsylvania National Mut. Cas. Ins. Co. v. St. John, No. 86 MAP 2012 (December 15, 2014), the Pennsylvania Supreme Court affirmed use of the "manifestation trigger" as the "general rule" for determining when commercial general liability (CGL) policies are triggered. The Court rejected an attempt to apply the "multiple trigger" theory to property damage claims. In so doing, the Court held that a policy is triggered when an injury is reasonably ascertainable, irrespective of whether or not the injured party understands that she has a cause of action.

Appellants John D. St. John and Kathy M. St. John are dairy farmers in Chester County. They hired LPH Plumbing to install a new plumbing system to expand their dairy operation. In 2003, LPH Plumbing negligently installed the plumbing system, creating a situation where on-going seepage of gray water contaminated the dairy herd's drinking water. In April 2004, the dairy herd began exhibiting health issues, including decreased milk production, salmonella poisoning, laminitis, and various reproductive maladies. Some of these health issues are common to dairy farming, and attributable to a wide range of possible causes. Appellants began to suspect the plumbing installation as the cause of these injuries in March 2006, when the cows thrashed their heads and refused to drink the water.

Pennsylvania National Casualty Insurance Company ("Penn National") issued four separate policies to LPH Plumbing. Three of those policies were CGL policies, for each of the three years between July 1, 2003 and July 1, 2006. The fourth policy was an umbrella policy applicable only to the third year (July 1, 2005 to July 1, 2006). Although the lower courts found that only the CGL policy for the first year (July 1, 2003 to July 1, 2004) had been triggered, the St. Johns sought to trigger coverage under policies applicable to the third year (both the CGL and umbrella policies), or alternatively, to all three years.

In D'Auria v. Zurich Ins., 507 A.2d 857 (Pa. Super. 1986), the Pennsylvania Superior Court adopted the "manifestation" rule for determining when a CGL policy...