Paul Steck

All articles by Paul Steck

 

Injuries Caused By a Gas Explosion Covered By Pollution Liability Policy

In Acuity, A Mut. Ins. Co. v. Chartis Specialty Ins. Co., 2015 WI 28, P52 (Wis. 2015), the Wisconsin Supreme Court has held that a pollution liability policy issued by Chartis Specialty Insurance Co., covered lawsuits alleging property damage and bodily injury caused by a natural gas line explosion. The policy, held by a construction company, was found to be implicated because natural gas is a pollutant and contaminant, the escape of which was a “pollution condition” within the meaning
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Oregon Federal District Court Gives Insurer Partial Win in Superfund Case

In Siltronic Corp. v. Employers Ins. Co. of Wausau, No. 3:11-cv-1493, 2014 U.S. Dist. LEXIS 153275 (D. Or. Oct. 28, 2014), an Oregon federal court granted partial summary judgment for the insured Siltronic Corp. (Siltronic), finding the insurer Employers Insurance Company of Wausau (Wausau) had a duty to defend against claims related to the cleanup of a Superfund site.  The district court, however, denied Wausau had a duty to pay any pre-tender defense costs. The coverage dispute arose from one
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No Further Information Required: 10th Circuit Confirms Clear Pollution Exclusion and Rejects Insured’s Attempts to Introduce Extrinsic Evidence

This environmental coverage action involved a determination of the insurers’ obligations to reimburse the policyholder for its litigation costs arising from an action commenced by over 400 Chesapeake, Virginia landowners.  The landowners alleged a golf course developer caused personal injury and property damage through the use of contaminated fly-ash material during the construction of a nearby golf course. The policyholder was insured under seven commercial general liability policies that required the insurers to reimburse Headwaters for expenses associated with lawsuits
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Pennsylvania District Court Finds No Coverage for Faulty Workmanship

In State Farm Fire & Casualty Co. v. McDermott (E.D. Pa. Oct. 14, 2014), a Pennsylvania federal district court recognized the well-established rule in Pennsylvania that faulty workmanship resulting in construction defects is not caused by an “occurrence.”  This coverage dispute arose out of work performed by McDermott at a residential housing development.  After McDermott completed its work on windows and doors, the homeowners discovered water intrusion.  They sued the developer, which, in turn, sued McDermott for negligence and breach
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Phase I/II Environmental Assessment Report Issued To Property Owner Held To Constitute A Claim For Environmental Losses Under A Claims-Made Policy

This environmental action involves a determination of coverage under a claims-made policy stemming from the investigation and clean-up of a site in Waterbury Connecticut.  Specifically, Adelphia entered into a contract to sell its Waterbury property and engaged an environmental consultant to conduct an environmental audit of the site prior to the sale pursuant to the Connecticut Property Transfer Act.  The Act prohibited transfer of an “establishment” without certifying that a parcel had been investigated for the potential discharge of hazardous
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Seventh Circuit Enforces Products-Completed Operations Hazard Exclusion in Faulty Workmanship Coverage Dispute

The Seventh Circuit, applying Illinois law, held that a Products-Completed Operations Hazard exclusion in a commercial general liability policy precluded coverage for a construction defect suit.  The coverage dispute arose out of the alleged faulty workmanship by the developer-insured in connection with a condominium conversion project, which allegedly caused damage to the condominium owners’ personal property. Following the construction of the condominiums, the condominium owners discovered water damage.  The board of the condominiums ultimately sued the developer, alleging faulty workmanship
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Court Rejects Policyholder’s Products-Completed Operations Hazard Arguments In Attempt To Obtain Coverage For Environmental Claims

This environmental coverage action arises from soil and groundwater contamination at Visteon’s Indiana plant that migrated to the properties of neighboring landowners. Specifically, Visteon manufactured automotive climate control system parts at the facility continuously until 2007 and operated 13 degreasers, which primarily used Trichloroethylene (TCE) as a degreasing solvent.  Multiple historical releases of TCE from the 1960s to 2000 and beyond resulted in a TCE groundwater plume that emanated from the site and volatile organic compounds, including TCE, were detected
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District Court Rejects Pollution Exclusion In Worker Exposure Case

This environmental coverage action arose from a worker’s exposure to corrosive chemicals while cleaning a tank and involved, in pertinent part, application of the pollution exclusion.  As background, the claimant’s employer specialized in cleaning mud tanks used in oil and gas drilling operations.  The claimant was not informed by the policyholder, JCI, that the subject mud tank contained large quantities of caustic materials, and based on that representation, he entered the mud tank without proper safety equipment.  As a result,
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Issue of Whether EPA Administrative Orders Pursuant To CERCLA Qualify As A “Suit” Certified To Texas Supreme Court

This environmental coverage action involved a dispute over whether the insurers had a duty to provide a defense to claims brought by the EPA in a CERCLA remediation action involving hazardous waste contained in three surface impoundments.  The 5th Circuit interposed a certified question to the Supreme Court of Texas whether the EPA’s PRP letters and unilateral administrative orders issued pursuant to CERCLA constitute a “suit” within the meaning of the commercial general liability (CGL) policies triggering a duty to
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Insurers’ Disclaimer Involving Environmental Damage Not Subject To Insurance Law §3420(d) Notice Requirements

This environmental coverage action involved a dispute over whether the insurers had a duty to provide coverage for the remediation of environmental damage at several manufactured gas plant (MGP) sites formerly owned by Long Island Lighting Company (LILCO) and the timeliness of the excess insurers late notice defense asserted as an affirmative defense in its answer.  Defendants issued excess insurance policies to LILCO that required, as a threshold condition for coverage, LILCO to provide prompt notice of any occurrence that
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Preemptive Power Shutdown From Hurricane Sandy Was Not A Covered Business Interruption Claim

This coverage action arises from the widespread power outages that occurred in and around New York City during and after Hurricane Sandy. On October 29, 2012, in anticipation of storm-related flooding, utility provider Consolidated Edison Co. of New York, Inc.  preemptively shut off power to certain of its service networks to preserve the integrity of the utility system.  As a result, the plaintiff, a law firm, was without power at its lower Manhattan office for several days. The firm filed
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Carbon Monoxide Poisoning Deemed Traditional Pollution Precluding Coverage Under Policy’s Pollution Exclusion

This environmental coverage action involved a Church pastor and his wife’s exposure to carbon monoxide from the Church’s heating system resulting in the death of the pastor, and the court’s interpretation as to the application of the policy’s pollution exclusion.  Specifically, the insurer commenced a declaratory action seeking a determination that the policies’ pollution exclusions precluded any duty to defend or indemnify the Church with respect to the pastors’ estates’ claims and issued a reservation of rights denying coverage on
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Environmental Coverage Report Winter 2014 is Now Available

Goldberg Segalla’s Environmental Coverage Report provides summaries of and access to the latest environmental coverage developments nationwide. Cases are organized by court and date. In addition, we provide the latest information regarding news in the environmental coverage industries. Click here for the latest edition. We appreciate your interest in our publication, and welcome your feedback. We also encourage you to share the publication with your colleagues.  If others in your organization are interested in receiving the publication, please contact Paul
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Cases for Winter 2014 Environmental Coverage Report

Below are decisions which correspond with the Environmental Coverage Report newsletter. Click here to download the latest version. Cases provided courtesy of LexisNexis. Alabama Gas v Travelers ArchIns v CommSteel Chartis v UnitedStates Emerson v Hartford Farmers v New Jersey Guaranty Farm Family v Cumberland Star v Bear Trident v Ace United Refining v National Uni VFC v Cadlerrocks        
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Insurer Prevails On Applicability Of Pollution Exclusion – Release Not Sudden or Accidental

This environmental coverage action arises out of the historic contamination of a parcel with various solvents and toxic waste disposed in unlined pits at the property.  Specifically, Northrop acknowledges using the property, which later became known as Bethpage Community Park (BCP), for the disposal of sludge from an on-site industrial wastewater treatment plant and from waste oils that contained residual amounts of TCE, other solvents and PCB’s since 1948. Later, in the 1960’s, the company donated the property to the
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Et Tu, Neighbor?: Multiple Carbon Monoxide Injuries in Apartment Complex Deemed A Single Occurrence

This environmental coverage action arises out of a carbon monoxide exposure and poisoning of multiple tenants in an apartment complex serviced by a gas boiler furnace located in the basement of the unit. A declaratory suit was initiated against the complex owner and the insurer seeking a declaration that claimants are entitled to a separate occurrence limit and that the damages sustained by each group of tenant plaintiffs constituted separate occurrences under the policy.  Here, the subject policy defined “occurrence”
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Environmental Testing Costs Not Part Of Indemnity Agreement

This environmental action involves the interpretation of the scope of an indemnity agreement involving the costs of environmental testing on property contaminated with percholorethylene (PCE) in a real property transaction. Cadlerocks entered into a loan in the principal amount of $1,925,000.  The note was secured by a mortgage, along with a separate Environmental Indemnity Agreement.  Cadlerocks failed to make the payment on the balloon balance due on the note and defaulted on the note causing the Trust to commence foreclosure
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Court Intervenes To Stay Arbitration Before Final Award

This arbitration/reinsurance action arises from the plaintiff’s request for injunctive relief to enjoin further arbitration proceedings as a result of questions concerning the potential breach of a provision in the reinsurance contract between the parties that required that disputes be submitted to three arbitrators who are not under the control of any party to the agreement. Specifically, plaintiffs contended that this provision was breached when defendant counsel participated in prohibited ex parte communications with a member of the arbitration panel.
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No Coverage Available For Lead Paint Related Injuries

This coverage action arises from a dispute regarding the applicability of a total pollution exclusion contained in a commercial general liability policy.  The insurer, Cumberland, relied on the exclusion in denying coverage for a suit involving alleged negligent removal of lead paint from a residence causing injury to a child.  The plaintiff asserted that the subject total pollution exclusion does not apply to lead-based injuries that are not traditional environmental contamination. Cumberland denied coverage for the underlying suit based on
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Insurer’s Environmental Subrogation Claims Under CERCLA §107(a) Dismissed

Chartis Specialty Ins. Co. v. United States Of America (U.S.D.C. Northern District of California, July 19, 2013) This environmental coverage action arises from a dispute as to whether an insurer can maintain an action under CERCLA’s subrogation provisions against the United States government where it is alleged the government is responsible for environmental contamination at a site in which the plaintiffs have been paying clean-up costs.  Specifically, the plaintiffs, Whittaker Corporation, and its insurer, Chartis, brought claims under §107(a) of
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It’s Only Temporary: Employee Hired to Meet Short-Term Workload Conditions on Indefinite Basis Is “Temporary Worker” Under Policy

Central Mut. Ins. Co. v. True Plastics, Inc. (Mass. Ct. App. July 10, 2013) A Massachusetts appellate court recently held that the phrase “short-term workload conditions” as used in a liability policy’s definition of “temporary worker” was unambiguous and could include workers hired on an indefinite basis. The claimant was injured while operating a molding machine at the insured’s plant. The claimant was not an employee of the insured company (a manufacturer of plastic components), but rather had been assigned
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Pollution Policy’s Late Notice Requirement In Buy-Back Provision Upheld Regardless Of Prejudice

Starr Indemnity & Liability Co. v. SGS Petroleum Service Corp. (5th Cir., June 18, 2013) This environmental coverage action arises from a dispute on as to the notice provision involving a pollution occurrence and whether the policyholder was required to show prejudice before denying coverage as required by a pollution buy-back provision in the policy. Specifically, Starr’s excess coverage policy contained an absolute pollution exclusion clause.  However, the parties negotiated a buy-back provision which deleted the original pollution exclusion and
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Transfer of PCB-Laden Oil From Tanker To Holding Tank Does Not Trigger A “Pollution Condition” Under The Policy

Colonial Oil Industries, Inc. v. Indian Harbor Ins. Co. (Second Cir., June 25, 2013) This environmental coverage action arises from an alleged breach of a duty to defend and indemnify the policyholder resulting from costs associated with the transfer of contaminated fuel oil. Specifically, the policyholder is a company whose business involves the transportation, storage and sale of fuel oil.  In the course of its business, Colonial received a large delivery of oil from a third-party distributor that unknowingly contained
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Supreme Court Affirms Arbitration Ruling Under Limited Review Authorized Under §10(a)(4) of the Federal Arbitration Act

Oxford Health Plans v. Sutter (United States Supreme Court, June 10, 2013) This action arises from an arbitrator’s decision on whether a contract authorizes class arbitration and whether the arbitrator’s decision survives the judicial review allowed by §10(a)(4) of the Federal Arbitration Act (FAA). Specifically, a physician entered into a contract with the insurer and agreed to provide medical care to members of the insurer’s network. The physician, on behalf of himself and a proposed class, sued the insurer, alleging
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Court Rules Policyholder Arguments Do Not Hold Water

Grinnell Mut. Reinsurance Co. v. Hubbs (Appellate Court ofIllinois, Third District, April 24, 2013) This water resource/environmental coverage action arises from an underlying dispute involving the interference and damages from the divergence or obstruction of streams or surface water between landowners.  Specifically, plaintiff insurer brought a declaratory judgment action against landowners who alleged damages to crop land caused by the policyholder’s alleged alteration of the flow and level of surface and groundwater following the policyholder’s construction of a holding pond
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Ninth Circuit Denies Insurer’s CERCLA Subrogation Claims

Chubb Custom Ins. Co. v. Space Systems/Loral, Inc. (9th Cir., March 15, 2013) This environmental coverage/subrogation action arises from CERCLA clean-up of a contaminated site owned by Chubb’s insured, but formerly operated by Ford Aerospace, among others, resulting in volatile organic soil and groundwater contamination.  Chubb issued an environmental insurance policy to its insured, Taube-Koret covering remediation costs related to the former pollution releases at the property. Eventually, Chubb paid its insured $2.4 million as reimbursement of the cleanup costs.
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Fifth Circuit Reverses District Court, Holds BP Was Entitled to Additional Insured Coverage Under Insurer’s Policy for Environmental Claims

In Re: Deep Water Horizon; Ranger Ins. Ltd. v. TransOcean Offshore Deepwater Drilling, Inc. et. al. (5th Cir., March 1, 2013) This environmental coverage action arises from the explosion and sinking of Transocean’s Deepwater Horizon oil platform in April 2010.  At issue were the obligations of Transocean’s primary and excess liability insurer to cover BP’s pollution-related environmental liabilities resulting from the ensuing oil spill.  Transocean owned the subject offshore oil platform and at the time of the incident and was engaged
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To [Follow] or Not to [Follow] – That is the Question: NY Court of Appeals Hears Important Case on Follow-the-Fortunes

The weather in Albany, New York might have been cold on January 2, but the New York Court of Appeals’ bench was scorching during the oral argument for the appeal in United States Fid. & Guaranty v Am. Re-Ins. Co. The five-judge bench fired question after question at counsel concerning important issues concerning the reinsurance industry. The appeal concerns a reinsurance dispute. More specifically, the appeal concerns whether follow-the-fortunes applies to the post-allocation phase of an insurance payout and whether
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Eleventh Circuit Denies Coverage For Drywall Claims Based On Pollution Exclusions

Granite State Ins. Co. v. American Building Materials, Inc. (11th Cir, January 3, 2013) This environmental coverage dispute arises out of Chinese Drywall claims and the interpretation of coverage under six separate policies issued by the plaintiff.  Here, an insured alleged that another insured, American Building, supplied it with defective gypsum drywall manufactured in China for installation in residential homes in Florida. It was determined that the drywall was emitting unusual amounts of sulfide gases. The court of appeals held
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Second Circuit Finds Coverage For Environmental Claims Based on Continuing Damage Provision in Excess Policies

Olin Corporation v. American Home Assurance Co. (2nd Cir, December 19, 2012) This environmental coverage dispute arises out of ground water contamination claims involving Olin’s Morgan Hill, California site, which had used the chemical potassium perchlorate in the manufacturing of signal flares beginning in 1956.  Olin appealed from the district court granting summary judgment to the insurers on the ground that the attachment point for the excess insurance policies could not be reached by the alleged environmental damage at the
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New York Appellate Division Affirms Summary Judgment On Coverage For Manufacturer In Asbestos Suit Where Insurer Failed To Prove Expected Injury Exclusion In Policy

Union Carbide Corp. v. Affiliated FM Ins. Co. (Supreme Court, Appellate Division, First Department, December 6, 2012) This environmental coverage dispute arises out of an underlying asbestos claim.  The trial court granted Union Carbide partial summary judgment striking the insurer’s defense that there was no coverage for the claims because the manufacturer expected or intended the bodily injury that resulted from exposure to its asbestos products. The insurer asserted that Union Carbide intended the damages because it knew that asbestos
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Policy’s Pollution Exclusion Applicable To Preclude Heating Oil Contamination Claims Where Contamination Occurred After Fuel ‘Delivered’

Spartan Oil Company v. New Jersey Property-Liability Insurance Guaranty Association Superior Court of New Jersey, Appellate Division, June 8, 2012) In this coverage dispute, the policyholder appealed an adverse summary judgment ruling dismissing its claims arising from an environmental contamination suit.  Spartan was in the heating oil distribution business during the applicable coverage period when heating oil from its vehicles was pumped into an external intake pipe located on the outside of its commercial customer.  The fuel traveled through an
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Triable Issues Of Fact Existed Regarding Policyholder’s Detrimental Reliance On Certificate Of Flood Insurance

Witkowski v. Richard W. Endlar Ins. Agency, Inc. (Massachusetts Court of Appeals, May 29, 2012) In this coverage dispute, the policyholder appealed an adverse summary judgment ruling dismissing its claims arising from a flood of the Shawsheen River that destroyed multiple basement residential condominium units. After the flood, a trustee of the condominium association told the four basement unit owners that their units were excluded from coverage under the association’s master policy.  Also, applicable building codes prohibited units at basement
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