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2003 PA Super 284
COUNTY OF DELAWARE,
IN THE SUPERIOR COURT OF
J.P. MASCARO & SONS, INC.,
Appeal from the Judgment Entered May 2, 2002
In the Court of Common Pleas of Delaware County
Civil, No. 99-3555
BEFORE: STEVENS, MONTEMURO,* and KELLY, JJ.
OPINION BY KELLY, J.:
Filed: August 1, 2003
¶ 1 Appellant, J.P. Mascaro & Sons, Inc. ("Mascaro"), appeals from the
judgment entered in the Court of Common Pleas of Delaware County,
awarding Appellee, ("Delaware County"), $305,910.00 on its contractual
indemnification claim. Specifically, Mascaro asks us to decide whether the
trial court erred when it determined that Mascaro must reimburse Delaware
County for expenses Delaware County incurred in settling the state and
federal actions brought against it. We hold that the trial court properly
entered judgment against Mascaro for the full amount of Delaware County's
settlement costs and attorney fees, plus interest. Accordingly, we affirm.
¶ 2 In the 1970s, Delaware County owned and operated two incinerators
that disposed of solid waste generated by county residents and businesses.
In late 1975, Delaware County requested bids for the removal and disposal
of residue produced by these incinerators. On November 19, 1975,
* Retired Justice assigned to the Superior Court.
Delaware County awarded the bid for Incinerator # 2, located in Darby
Township, to Mascaro. The contract paid Mascaro $1.98 per unit for
170,000 cubic yards, for a total price of $336,000.00. Per the terms of the
contract, Mascaro chose the method of hauling and disposing of the waste.
The disposal site, however, was subject to approval by Delaware County.
Mascaro chose to dispose of the residue at the Gloucester Environmental
Management Systems ("GEMS") landfill site in Gloucester County, New
Jersey, and Delaware County approved this site. Pursuant to this contract,
Mascaro removed Delaware County's waste residue from December 17, 1975
until December 16, 1976.
¶ 3 In 1987, Delaware County was joined as a third-party defendant in a
federal suit filed by the New Jersey Department of Environmental Protection
against GEMS, alleging improper dumping in the GEMS landfill. In 1995,
Delaware County was also joined in a New Jersey state court action brought
by homeowners bordering the GEMS landfill. In both of these actions,
Delaware County demanded that Mascaro defend and indemnify against the
claims under the 1975 waste removal and disposal contract. However,
Mascaro refused to take any action to defend Delaware County. Delaware
County eventually settled both of these lawsuits, paying $73,565.00 to settle
the CERCLA1 federal action and $25,000.00 to settle the state court action.
The legal fees and costs to defend both actions totaled $163,745.00.
1 Comprehensive Environmental Response, Compensation & Liability Act
("CERCLA"), 42 U.S.C.A. §§ 9601 et seq.
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Travelers Insurance Co. covered $40,000.00 of these fees per an insurance
policy with Delaware County.
¶ 4 Following a bench trial on March 28, 2002, the trial court entered a
verdict in favor of Delaware County in the amount of $305,910.00. On April
5, 2002, Mascaro filed a motion for post-trial relief, which was denied.
Judgment was entered by order dated May 1, 2002 and entered on May 2,
2002. This appeal followed.
¶ 5 Mascaro raises the following issues for our review:
WHERE THE SERVICES PERFORMED BY MASCARO DID
NOT INCLUDE ACTUAL DISPOSAL BUT RATHER THE
DISPOSAL WAS HANDLED BY A LANDFILL APPROVED BY
[DELAWARE] COUNTY, DOES THE INDEMNIFICATION
PROVISION THAT EXTENDED TO WORK PERFORMED BY
MASCARO APPLY TO CERCLA RELATED CLAIMS[?]
WHETHER THE INDEMNIFICATION CLAUSE WAS
INTENDED TO PROVIDE CERCLA LIABILITY GIVEN THE
FACT THAT THE PERFORMANCE OF MASCARO DID NOT
INCLUDE THE DISPOSAL OF THE WASTE AND THE CLAUSE
DID NOT INDICATE SUCH COVERAGE[?]
WHETHER THE SETTLEMENT AND ATTORNEYS FEES PAID
WERE FAIR AND REASONABLE WHERE [DELAWARE]
COUNTY DID NOT JOIN AS THIRD PARTY DEFENDANTS
ANY MUNICIPALITIES AND/OR HAULERS THAT ACTUALLY
GENERATED AND/OR TRANSPORTED THE WASTE TO
[DELAWARE] COUNTY['S] INCINERATOR BUT RATHER
PAID ATTORNEYS FEES AND SETTLEMENTS WITHOUT ANY
CONTRIBUTION BY THESE EQUALLY RESPONSIBLE
(Mascaro's Brief at 4).
¶ 6 As a prefatory matter, we address Delaware County's contention that
Mascaro did not allege specific errors in its post-trial motion, thereby failing
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to preserve its issues on appeal. Pennsylvania Rules of Civil Procedure Rule
227.1(b) requires that a post-trial motion must specify the grounds for relief
and how they were preserved. Id. Otherwise, the issues are considered
waived. Id. However, where an appellant properly preserves its issues at
pre-trial proceedings or at trial, and raises them in the post-trial motion so
that the trial court understands the issues, any arguable violation of Rule
227.1 does not require a waiver. Meeting House Lane, Ltd. v. Melso, 628
A.2d 854, 856-57 (Pa.Super. 1993), appeal denied, 537 Pa. 633, 642 A.2d
486 (1994). Here, despite Mascaro's failure to state specifically how its
grounds for relief were raised in pre-trial proceedings or at trial, these issues
were preserved both pre-trial and during trial, and the court had no difficulty
articulating what issues Mascaro sought reviewed and addressed them in its
opinion. See id. at 857. Consequently, we deem Mascaro's issues properly
preserved for appeal.
¶ 7 Mascaro first argues that the services actually performed under the
contract included only the collection and transportation but not the disposal
of the waste residue. Mascaro contends it transported the residue to the
GEMS landfill but had no part in disposing of it. Mascaro believes the
requirement that Delaware County approve the landfill chosen by Mascaro
indicates the parties' intention that a third-party landfill would perform the
disposal duties and that Mascaro's performance under the contract included
only collection and transportation. Mascaro also argues that the language
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limiting indemnification to suits occurring "in the course of [Mascaro's]
performance" of the contract precludes its liability for any action that did not
immediately arise during the period it was collecting and transporting the
waste. For these reasons, Mascaro maintains the parties did not intend for
Mascaro to assume liability regarding the disposal of the waste residue.
Mascaro concludes it was not obligated to defend and indemnify Delaware
County against the improper dumping lawsuits. We disagree.
¶ 8 When reviewing a question of contract interpretation, this Court's
scope of review is plenary. Liddle v. Scholze, 768 A.2d 1183 (Pa.Super.
2001). We are free to draw our own inferences and need not rely on the
findings of the trial court. Id.
¶ 9 The ultimate goal of interpreting a contract is to ascertain and give
effect to the intent of the parties as reasonably manifested by the language
of their written agreement. Id. at 1185. A contract is not rendered
ambiguous by the mere fact that the parties do not agree upon its proper
construction. Riccio v. American Republic Ins. Co., 683 A.2d 1226
(Pa.Super. 1996), affirmed, 550 Pa. 254, 705 A.2d 422 (1997). In
determining whether an ambiguity exists, the court may consider "whether
alternative or more precise language, if used, would have put the matter
beyond reasonable question." Celley v. Mutual Health & Acc. Ass'n., 324
A.2d 430, 434 (Pa.Super. 1974). Where contract language is clear and
unambiguous, the court shall interpret the agreement as expressed, rather
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than silently intended. Steuart v. McChesney, 498 Pa. 45, 444 A.2d 659,
651 (1982). In interpreting the scope of an indemnification clause, the court
must consider the four corners of the agreement and its surrounding
circumstances. Deskiewicz v. Zenith Radio Corp., 561 A.2d 33
10 In the instant case, Mascaro's completed bid invitation reads:
"[Mascaro] offers to furnish and operate equipment for full and complete
removal and disposal of residue from the Delaware County Refuse
Incinerator Nos. 2...in accordance with the annexed General Conditions and
Specifications." (See Invitation for Bids for Furnishing and Operating
Equipment for Removal and Disposal of Residue from Incinerator Plants Nos.
2 and 3 for the County of Delaware, dated December 17, 1975, at P-1; R.R.
at 9) (emphasis added). The "General Conditions" section of the contract
further states: "[Mascaro] shall defend, indemnify and save harmless
[Delaware County] from and against all suits for claims that may be based
on any alleged injury (including death) to any person or property that may
be alleged to have occurred in the course of the performance of this
Contract...." (See Specifications: Furnishing and Operating Equipment for
Removal and Disposal of Residue from Incerator Plants No. 2 and 3, County
of Delaware, dated December 17, 1975, at Paragraph 44c; R.R. at 30).
Indeed, even the title of the contract indicates Mascaro's obligation included
waste disposal as well as transportation. (See id.) Mascaro's narrow and
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detailed parsing of individual phrases contained in the contract ignores the
explicit and unambiguous language expressing Mascaro's duty to transport
and dispose of the waste. See Celley, supra; Stuart, supra. Moreover,
Mascaro's assertion that it was responsible only for transportation of the
waste residue is belied by the fact that it had the responsibility of choosing
the location of disposal. Mascaro's claim that it actually performed only the
transportation aspect of the contract is also disingenuous considering it
accepted full payment under the transportation and disposal contract. Thus,
the trial court properly interpreted the contract to include a duty by Mascaro
to transport and dispose of the waste residue. See Liddle, supra.
¶ 11 The indemnity clause specifically states Mascaro is responsible for
defending and indemnifying Delaware County against "all suits" arising from
the course of Mascaro's performance. Here, both the state and federal suits
against Delaware County were based on improper waste dumping at the
GEMS location. Pursuant to its contractual obligation to transport and
dispose of the waste, Mascaro specifically chose GEMS as its disposal site.
The decision to dump at GEMS, made by Mascaro in the course of its
contract with Delaware County, created an alleged injury which led to the
state and federal suits. Thus, in light of Mascaro's contractual responsibility
to dispose of the waste and the broad language contained in the indemnity
clause, we agree with the trial court that Mascaro owed a duty to defend and
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indemnify Delaware County against the illegal dumping actions. See
¶ 12 In its second issue, Mascaro argues that the indemnification clause of
the contract does not contain language that indicates Mascaro agreed to
assume any CERCLA liability. Mascaro notes that the contract in question
pertains to services performed from 1975-1976, years before the enactment
of CERCLA. Mascaro further contends that the claims for which it is liable
are limited because the indemnity provision does not allocate all present and
future claims, nor is it a broad waiver of all liabilities of any type. We
¶ 13 We note that the instant case presents a matter of first impression in
this Commonwealth regarding the application of CERCLA liability to an
indemnification clause executed prior to the enactment of CERCLA.
However, other jurisdictions have uniformly held that a pre-CERCLA
indemnification clause can include CERCLA liability. See SmithKline
Beecham Corp. v. Rohm and Haas Co., 89 F.3d 154 (3rd Cir. 1996);
Beazer East Inc. v. Mead Corp., 34 F.3d 206 (3rd Cir. 1994), cert. denied,
514 U.S. 1065, 115 S.Ct. 1696, 131 L.Ed.2d 559 (1995); Elf Atochem
North America v. United States, 866 F.Supp. 868 (E.D.Pa. 1994); Olin
Corp. v. Consolidated Aluminum Corp., 5 F.3d 10 (2nd Cir. 1992). To
include CERCLA liability, the clause in question must be either specific
enough to include CERCLA liability, or so general as to include any and all
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environmental liability. See SmithKline Beecham, supra; Elf Atochem,
supra; Beazer East Inc., supra. In determining whether an
indemnification clause covers CERCLA liability, courts look to whether
language limiting the indemnity exists, and whether the language indicates
the intent to allocate all potential liabilities among the parties. See Elf
Atochem, supra. An indemnification clause does not cover CERCLA liability
if it contains limiting language. Id.
¶ 14 In the instant case, Mascaro agreed to "defend, indemnify, and save
harmless [Delaware County] from and against all suits for claims that may
be placed upon any alleged injury (including death) to any person or
property that may be alleged to have occurred in the course of the
performance" of the contract at issue. (Specifications at 44c) (emphasis
added). The terms of the contract contain no language that further limits or
clarifies the intended extent of the indemnification clause. See Deskiewicz,
supra. The language of the indemnity clause is extremely broad, reflecting
Delaware County's intent to ensure that Mascaro defend and indemnify in
any potential matter pertaining to the removal and disposal of the waste
residue. Based upon Delaware County's intent to allocate all liability to
Mascaro, the general language of the indemnification clause, and the lack of
language indicating a limit on its reach, we agree with the trial court that the
indemnity clause at issue is general enough to include CERCLA liability. See
SmithKline Beecham, supra; Olin Corp., supra.
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¶ 15 Finally, Mascaro argues that the settlement costs incurred by Delaware
County were unreasonable. Mascaro contends Delaware County could have
mitigated the costs of the settlements by joining municipalities and other
transporters as third-party defendants in the federal and state suits.
According to Mascaro, Delaware County has no explanation or rationale for
not joining such parties, and doing so would have mitigated the settlement
costs as the eventual settlement figure was based upon a volume of waste
formula. Moreover, Mascaro contends that it should not be responsible in
any event for the $40,000.00 already paid to Delaware County by Travelers
Insurance. Mascaro concludes it cannot reasonably be responsible for the
full settlement costs. We disagree.
¶ 16 To establish a right to indemnification where a case is resolved by
settlement, the party must establish that the settlement was reasonable,
that the underlying claim was valid against it, that the claim is within the
coverage of the agreement, and that any counsel fees were reasonable.
McClure v. Deerland Corp., 585 A.2d 19 (Pa.Super. 1991). Where a claim
against an indemnitee has been settled, the burden falls on the indemnitee
to prove that the settlement was reasonable. Martinique Shoes, Inc. v.
New York Progressive Wood Heel Co., 217 A.2d 781 (Pa.Super. 1966).
¶ 17 Additionally, our ability to review the grant of attorney's fees is
limited, and we will reverse only upon a showing of plain error. Diament v.
Diament, 816 A.2d 256 (Pa.Super. 2003) (citing Gilmore v. Dondero, 582
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A.2d 1106, 1109 (Pa.Super. 1990)). Plain error is found where the court's
decision is based on factual findings with no support in the evidentiary
record or on legal factors other than those that are relevant to such an
¶ 18 Here, Delaware County was first joined as a third-party defendant in
two actions pertaining to improper dumping in the GEMS landfill. After
notifying Mascaro of its contractual duty to defend and indemnify in matters
pertaining to the removal and disposal of the waste residue, and receiving
Mascaro's refusal to do so, Delaware County settled both suits at a total cost
¶ 19 During trial in the instant contract case, Frank Catania, Esquire ("Mr.
Catania"), a Delaware County Solicitor, testified that the $75,000 settlement
of the federal claim was fair and reasonable, falling within the range of
payments made by the municipalities group. (N.T. Trial, 2/7/02, at 53-55;
R.R. at 65b-67b). Mr. Catania further testified that the reason other
municipalities were not joined in the state action was due to Delaware
County's interest in resolving the matter quickly, avoiding further possible
litigation with those municipalities. (Id. at 118). Regarding Delaware
County's attorney's fees, Mr. Catania explained that both the rates charged
and the amount of time billed by the attorneys working with the County on
the state and federal claims were fair and reasonable. (Id. at 43-48; R.R. at
58b-62b). These costs were further reviewed by Brokerage Professionals,
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Inc., a third-party working with Delaware County, which did not object to
the fees. (Id. at 61; R.R. at 68b-69b). Consequently, we agree with the
trial court that the evidentiary record supports as reasonable both the
settlement reached by Delaware County and the attorney's fees it incurred.
See Diament, supra; McClure, supra. Mascaro's refusal to defend
Delaware County against the state and federal actions was a decision made
at its own peril. Consequently, the trial court properly entered judgment
against Mascaro for $305,910, the full amount of Delaware County's
settlement costs and attorney fees, plus interest. See id.2
¶ 20 Based upon the foregoing, we hold that the trial court properly entered
judgment against Mascaro for the full amount of Delaware County's
settlement costs and attorney fees, plus interest.
¶ 21 Judgment affirmed.
2 We note that payments from a collateral source do not diminish the
damages otherwise recoverable from the wrongdoer. Moorhead v. Crozer
Chester Medical Center, 564 Pa. 156, 164, 765 A.2d 786, 790 (2001).
Accordingly, the $40,000 received by Delaware County from an insurance
policy does not diminish the damages owed by Mascaro. Id.
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