Justia Insurance Law Opinion Summaries

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

Plaintiff here was Boston Gas Company and Defendant was Century Indemnity Company, one of Boston Gas's insurers. Environmental contamination was later found at many of Boston Gas's former gas plant sites. Boston Gas filed this action seeking a declaratory judgment as to Century's obligations under policies issued to Boston Gas. Jury trials were held with respect to two sites included in the cleanup, the Everett and Commercial Point sites. The Everett site litigation first went to trial. Before the parties reached a settlement, the supreme judicial court (SJC) found a pro rata allocation method applied for allocating liability for the contamination where Century had provided coverage for the risk for only a portion of the time during which the contamination took place. Meanwhile, the jury found Century liable for $1,699,145 in the Commercial Point litigation. The trial judge deferred entry of final judgment pending the outcome of the Everett appeal. The district court ultimately (1) concluded that in the wake of the SJC ruling in the Everett litigation, by allocating damages across a 121-year span in the case of the Commercial Point site, this reduced Century's share of damages from 100 percent to less than fifteen percent; and (2) vacated the damages award and ordered a new trial on the issue of which of the costs were subject to an exclusion in the GCL policy. The First Circuit Court of Appeals affirmed. View "Boston Gas Com. v. Century Indem. Co." on Justia Law

Enviro-Chem conducted waste-handling and disposal operations at three sites north of Zionsville, Indiana, until it ceased operations in 1982, leaving considerable amounts of pollutants. The U.S. Environmental Protection Agency undertook cleanup and identified potentially responsible parties (PRPs), including former owners, their corporate entities, and their insurers. A trust was established to fund cleanup and trustees sued to recover cleanup costs under the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. 9607(a) (CERCLA), the Indiana Environmental Legal Actions Statute (ELA), and more. Work continues at the site at issue. The district court dismissed, in part, on limitations grounds, construing the complaint as seeking contribution. The Seventh Circuit reversed dismissal of three counts, holding that claims to recover costs incurred pursuant to the 2002 Administrative Order by Consent between the EPA and PRPs and that related claims, including the ELA claim, were not moot. The court upheld denial of an insurer’s motion for summary judgment on preclusion grounds. View "Bernstein v. Bankert" on Justia Law

This appeal concerned the construction of a single word, "sudden," within a pollution exclusion clause in a series of liability insurance policies barring coverage for certain damages unless the events causing those damages were "sudden and accidental" (an issue of first impression in New Mexico). Concluding that "sudden" lacks a single clear meaning, the Supreme Court reversed the Court of Appeals' holding that the word unambiguously signifies "quick, abrupt, or a temporarily short period of time. . . .Under well-established principles of insurance law," the Court construed this ambiguity in favor of the insured, Petitioner United Nuclear Corporation, and interpreted the term "sudden" in the insurance policies at issue in this dispute to mean "unexpected." the case was remanded to the district court for further proceedings. View "United Nuclear Corp. v. Allstate Ins. Co." on Justia Law

In this declaratory judgment proceeding, the defendant, Citizens Insurance Company of America, appealed a superior court order which ruled in favor of the plaintiff, The Barking Dog, Ltd., which operates a dog kennel and grooming business at several locations in New Hampshire. The court ruled that an insurance policy issued by the defendant provided coverage for damage to the plaintiff’s septic system and ordered the defendant to pay the plaintiff $20,000, the agreed upon damage amount. The court also ruled that the defendant was not prejudiced by the plaintiff’s failure to disclose its expert’s report in a timely manner or its failure to disclose its expert’s curriculum vitae and, accordingly, permitted the plaintiff’s expert to testify at trial. The defendant argued that both rulings were error. Finding no error, the Supreme Court affirmed. View "The Barking Dog, Ltd. v. Citizens Insurance Company of America" on Justia Law

This case considered complex questions of insurance policy coverage interpretation in connection with a federal court-ordered cleanup of the state's Stringfellow Acid Pits waste site. The Supreme Court affirmed the court of appeal's judgment, holding (1) the "continuous injury trigger" and "all sums" rule announced in Montrose Chemical Corp. v. Admiral Ins. Co. and Aerojet-General Corp. v. Transport Indemnity Co. applied to the State's successive property or long-tail first party property loss, triggering the duty to indemnify here; and (2) the court of appeal correctly applied the "all-sums-with-stacking" allocation rule in allocating the indemnity duty among the insurers responsible for covering the property loss. View "State v. Cont'l Ins. Co." on Justia Law

The EPA initiated efforts to remediate contamination at the Rhode Island Centredale Manor Superfund Site under the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. 9601-9675 and issued a unilateral administrative order to compel entities, including NE Container and Emhart to remove hazardous substances that had been disposed of at the Site as part of the former operations of several companies. Emhart sued NE Container and its insurers, which had provided general commercial liability policies to NE Container during different time periods from the late 1960s through the mid-1980s. Travelers agreed to contribute to NE Container's defense pursuant to a reservation of rights, while PWIC took the position that it had no duty to defend. Travelers has incurred significant defense costs and filed this suit, seeking contribution from PWIC. The district court ruled that PWIC was not contractually obligated to defend NE Container in the Emhart action, observing that the alleged property damage occurred before the commencement of the PWIC policy period between 1982 and 1985. The First Circuit vacated. The district court mistakenly focused solely on the timing of the insured's alleged polluting activities, rather than also considering the potential timing of property damage caused by those activities. View "Travelers Casualty & Surety Co. v. Providence WA Ins. Co., Inc." on Justia Law

OneBeacon and AMICO were insurers of the B.F. Goodrich and, among others, were liable for environmental cleanup at the Goodrich plant in Calvert City, Kentucky. AMICO settled with Goodrich, but OneBeacon’s predecessor went to trial. A state court jury found for Goodrich, and OneBeacon was ordered to pay $42 million in compensatory damages and $12 million in attorney fees. The state court also denied OneBeacon's request for settlement credits to reflect amounts paid by other insurers, such as AMICO, through settlements with Goodrich. OneBeacon sought equitable contribution; AMICO removed to federal court. The district court granted AMICO summary judgment. The Sixth Circuit affirmed. Ohio policy favoring settlements provides that a settled policy is exhausted for purposes of equitable contribution; the court declined to address whether Ohio law permits interclass contribution actions or whether the jury finding of bad faith bars equitable relief.