Justia Insurance Law Opinion Summaries

The EPA filed suit under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA), 42 U.S.C. 9601 et seq. against Land O'Lakes, alleging that Land O'Lakes was responsible for cleanup costs at a contaminated refinery site. Land O'Lakes subsequently filed suit against its insurers, Wausau and Travelers, seeking payment of defense costs and indemnification under commercial general liability (CGL) policies that the insurers issued in connection with the CERCLA suit. The court concluded that Land O'Lakes's 2009 duty-to-defend claims were barred by the Minnesota statute of limitations where the 2001 Potentially Responsible Party (PRP) letter was a "suit" for arguably-covered damages as contemplated under the pertinent CGL policies. The court also concluded that Land O'Lakes's costs to remediate the refinery site fell within the owned-property exclusion. Accordingly, the court affirmed the judgment of the district court. View "Land O'Lakes, Inc. v. Employers Ins. Co., et al." on Justia Law

Third Site is a Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) site that was part of a larger area, under common ownership by the Bankerts, used for recycling industrial wastes. Cleanup initially focused on other sites, but in 1987 and 1992 consultants found concentrations of volatile organic compounds; Third Site was transferring pollutants to Finley Creek, which flows to Eagle Creek Reservoir, which supplies Indianapolis drinking water. The creek was realigned. In 1999, the EPA entered into an Administrative Order by Consent (AOC) with potentially responsible parties. Non-Premium Respondents agreed to undertake an Engineering Evaluation and Cost Analysis (EE/CA) of removal alternatives and to settle a trust to bankroll the EE/CA. Premium Respondents, allegedly de minimis contributors, were entitled to settle out with a one-time Trust contribution under 42 U.S.C. 9622(g). Non-Premium Respondents met their obligations. In 2002, the parties entered into a second AOC to perform work described by the Enforcement Action Memorandum: Non-Premium respondents had the same Trust obligations for removal efforts. The Bankerts are Non-Premium Respondents under both AOCs, but have not met their obligations. In 2008, the Trustees sued the Bankerts and their insurers, seeking cost recovery under CERCLA, 42 U.S.C. 9607(a), and Indiana law. One of the insurers argued that its successful litigation in connection with cleanup of the adjoining site precluded a finding of coverage. Entering summary judgment for the Bankerts, the district court construed the CERCLA claim as seeking contribution under 42 U.S.C. 9613(f), and barred by the statute of limitations, so that issues concerning the insurer were moot. The Seventh Circuit remanded reinstated claims under 42 U.S.C. 9607(a)(4)(B), to recover costs incurred under the 2002 AOC and against the insurer. On rehearing, the court clarified that a party responsible for contamination may obtain an immediately effective release from the EPA in a settlement, or it may obtain only a performance-dependent conditional covenant not to sue with an accompanying disclaimer of liability. Whether, and when, a given settlement “resolves” a party’s liability under 42 U.S.C. 9613(f)(3)(B) is case-specific and depends on its terms. In this case, the AOC did not provide for resolution upon entering into the agreement. View "Bernstein v. Bankert" on Justia Law

Southern Natural Gas Company (Sonat) sued Certain Underwriters at Lloyd's London and Certain London Marketing Insurance Companies (Phase III), alleging breach of numerous umbrella and excess liability policies. Sonat contended the insurance companies failed to pay certain environmental-remediation costs. The trial court granted summary judgment in favor of the insurers based on prior trials in Phases I and II of the case; Sonat appealed, and the insurers cross-appealed Phase III's outcome. Finding no abuse of the trial court's discretion, the Supreme Court affirmed. View "Certain Underwriters at Lloyd's, London v. Southern Natural Gas Company " on Justia Law

This diversity case involved a dispute over insurance coverage between Starr and SGS. The district court, relying on Matador Petroleum Corp. v. St. Paul Surplus Lines Ins. Co., held that Starr did not need to show prejudice before denying coverage to SGS for late notice under the pollution buy-back provision. Bound by Matador, which concluded that a notice requirement in this type of supplemental pollution endorsement was essential to the bargained-for coverage, the court affirmed the judgment and found SGS's arguments unpersuasive. View "Starr Indemnity & Liablity Co. v. SGS Petroleum Serv. Corp." on Justia Law

Doe Run commenced a declaratory action seeking to enforce Lexington's contractual duty to defend Doe Run per its Commercial General Liability (CGL) policies in two underlying lawsuits (the Briley Lawsuit and the McSpadden Lawsuit). These underlying lawsuits sought damages arising out of Doe Run's operation of a five-hundred-acre waste pile (Leadwood Pile). The court concluded that the pollution exclusions in the CGL policies precluded a duty to defend Doe Run in the Briley Lawsuit. The court concluded, however, that the McSpadden Lawsuit included allegations and claims that were not unambiguously barred from coverage by the pollution exclusions in the policies. The McSpadden Lawsuit alleged that the distribution of toxic materials harmed plaintiffs, without specifying how that harm occurred. The McSpadden complaint also alleged that Doe Run caused bodily injury or property damage when it left the Leadwood Pile open and available for use by the public without posting warning signs. Accordingly, the court affirmed in part, reversed in part, and remanded. View "Doe Run Resources Corp. v. Lexington Ins. Co." on Justia Law

Doe Run commenced a declaratory judgment action seeking to enforce Lexington's contractual duty to defend Doe Run per its Commercial General Liability (CGL) policies in an underlying lawsuit. The underlying lawsuit alleged environmental property damage resulting from Doe Run's mine and mill operations. The court affirmed the district court's conclusion that Lexington had no duty to defend because the policies' absolute pollution exclusions unambiguously barred coverage of all claims asserted in the underlying lawsuit. View "Doe Run Resources Corp. v. Lexington Ins. Co." on Justia Law

Appellants hired Respondent as the general contractor to build a seasonal residence on Appellant's property. Respondent purchased a general liability insurance policy from Midwest Family Mutual Insurance Company that included an absolute pollution exclusion. Respondent later purchased a boiler for Appellant's home that bore a label warning that the boiler was designed to run on natural gas only. Respondent connected the boiler to a liquid propane line. Appellants were later transported to hospital due to carbon monoxide poisoning from the boiler. Appellants brought litigation against Respondent. Midwest initiated a declaratory judgment action, requesting that the district court find Midwest had no duty to defend or indemnify Respondent because coverage was barred under the absolute pollution exclusion. The district court denied Midwest's motion for summary judgment, concluding that it would be inappropriate to rule as a matter of law that the absolute pollution exclusion barred coverage under the facts in this case since Respondent did not cause any environmental pollution. The court of appeals reversed, holding that carbon monoxide constitutes a pollutant in the Midwest policy. The Supreme Court affirmed, holding that carbon monoxide released from a negligently installed boiler is clearly a "pollutant" that is subject to the absolute pollution exclusion of the Midwest policy. View "Midwest Family Mut. Ins. Co. v. Wolters" on Justia Law

This case concerned whether ILU had a duty to defend LaGen in an underlying suit filed against it by the EPA and the LDEQ for alleged Clean Air Act (CAA), 42 U.S.C. 7401, and state environmental law violations. Reading all of the relevant provisions together and giving them their plain meaning, the underlying EPA suit included allegations and prayers for relief that could potentially result in covered remediation costs. The court rejected ILU's argument that injunctive relief was excluded from coverage by the Fines and Penalties exclusion. Because the court found that ILU had a duty to defend on other grounds, the court declined to decide on interlocutory appeal whether New York law allowed indemnification for CAA civil penalties. Accordingly, the court affirmed the district court's holding that under the policy ILU had a duty to defend LaGen in the underlying EPA and LDEQ suit. The court remanded for further proceedings and denied ILU's motion to dismiss LaGen's cross-appeal as moot. View "Louisiana Generating, L.L.C., et al v. Illinois Union Ins. Co." on Justia Law

Plaintiff filed a subrogation suit against defendants for recovery of insurance payments to its insured, Taube-Koret, for environmental response costs Taube-Koret incurred in cleaning up pollutants released on its property. The court concluded that plaintiff had no standing to bring suit under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. 9601-9675, section 107(a) because it did not incur any "costs of response" related to the removal or remediation of a polluted site, and because the common law principle of subrogation did not apply to section 107(a); plaintiff could not bring a subrogation claim under section 112(c) because it did not allege that Taube-Koret was a "claimant"; and plaintiff's state law claims were time-barred. Accordingly, the court affirmed the district court's dismissal of plaintiff's third amended complaint with prejudice under Rule 12(b)(6). View "Chubb Custom Ins. Co. v. Space Systems/ Loral, Inc., et al" on Justia Law

Respondents Christopher Roinestad and Gerald Fitz-Gerald were overcome by poisonous gases while cleaning a grease clog in a sewer near the Hog's Breath Saloon & Restaurant. The district court concluded that Hog's Breath caused respondents' injuries by dumping substantial amounts of cooking grease into the sewer thereby creating the clog and consequent build up of the gas. On summary judgment, the district court found the saloon liable under theories of negligence and off-premises liability and granted respondents damages. The saloon carried a commercial general liability policy issued by Petitioner Mountain States Mutual Casualty Company which sought a ruling it had no duty to indemnify Hog's Breath. The district court agreed that under the terms of the policy, the insurer had no duty under a pollution exclusion clause. The appellate court reversed the ruling in favor of the insurer, finding the pollution exclusion clause was ambiguous and that its application to cooking grease (a common waste product) could lead to absurd results and negate essential coverage. Upon review, the Supreme Court reversed, finding that the saloon released enough grease to amount to a discharge of a pollutant, and that the insurance policy pollution exclusion clause barred coverage in this case. View "Mountain States Mutual Casualty Company v. Roinestad" on Justia Law