Justia Insurance Law Opinion Summaries

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.

The Indiana Department of Environmental Management (IDEM) informed Flexdar, Inc. that Flexdar would be liable for the costs of cleaning up trichloroethylene (TCE) contamination on a site where Flexdar previously had operations. State Automobile Mutual Insurance Company (State Auto), with whom Flexdar maintained general liability and umbrella insurance policies for the period when the contamination occurred, filed a declaratory judgment action, contending that coverage for the TCE contamination was excluded pursuant to a pollution exclusion in the policies. The trial court entered summary judgment in favor of Flexdar, concluding that the language of State Auto's pollution exclusion was ambiguous and therefore should be construed against State Auto and in favor of coverage. The Supreme Court affirmed, holding that the language of the pollution exclusion at issue was ambiguous, and therefore, in accordance with precedent, the policies were construed in favor of coverage.

Insurers sought a declaration that they had no duty to defend or indemnify in tort suits brought against the insured village, concerning discovery of "perc," a carcinogenic common dry cleaning solvent, in one of its wells and the village's continued use of the well without disclosure. The district court, relying on a pollution exclusion in the policies, granted summary judgment for the insurers. The exclusion refers to "actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of 'pollutants'" and excludes from coverage expenses for "cleaning up ... or in any way responding to, or assessing the effects of pollutants." After exploring the reasons for the exclusion, the Seventh Circuit affirmed. The court rejected an argument that this was not a pollution case, because the amount of perc in the water was below the maximum level permitted by environmental regulations. The complaints actually filed "describe in copious detail the conduct giving rise to the tort suits, and in doing so inadvertently but unmistakably acknowledge the applicability of the pollution exclusion."

ESBC, billing agent for the Fire Department, determined that each of the individual defendants owned a vehicle involved in a collision to which the Fire Department responded and each had insurance coverage, and billed response costs incurred for each collision. The defendants refused to pay and ESBC sought a declaration that defendants were liable under the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. 9601. Under CERCLA, the owner of a “facility” from which hazardous substances have been released is responsible for response costs that result from the release. Insurer-defendants counterclaimed for injunctive relief from ESBC’s billing practices and alleging violation of the Fair Debt Collection Practices Act, 15 U.S.C. 1692, unjust enrichment, unlawful fee collection, fraud, constructive fraud, and insurance fraud. The district court granted defendants judgment on the pleadings and dismissed counterclaims without prejudice. The Seventh Circuit affirmed. Motor vehicles for personal use fall under the "consumer product in consumer use” exception to CERCLA’s definition of facility