Continental Ins. Co. v. Northeastern Pharm. & Chem. Co.

842 F.2d 977 (8th Cir. 1988)

Purchase the Printed Copy at bsmsphd.com

Nature of the Case

To access this section all you need to do is click here and register.

Facts

D manufactured hexachlorophene in a factory in Verona, Missouri. This produced the highly toxic chemical, dioxin. D disposed of about eighty-five 55-gallon drums of hazardous wastes by burying them in a trench on a farm near Verona. Many of the drums had deteriorated and were in poor condition at the time of disposal; many broke open when they were dumped into the trench. A strong chemical odor persisted in the immediate area for several months thereafter. D eventually hired Independent Petrochemical Corp. (IPC) to dispose of more hazardous wastes containing dioxin. IPC hired Russell Bliss who mixed them with waste oil and sprayed them as a dust suppressant at various locations. Dirt contaminated with D's hazardous wastes was then used as landfill on another property. D was insured by P under three policies. P was obligated to pay for property damages and the second and third policies had a pollution exclusion clause wherein the insurance does not apply to . . . property damage arising out of the discharge, dispersal, release or escape of smoke, vapors, soot, fumes, acids, alkalis, toxic chemicals, liquids or gases, waste materials or other irritants, contaminants or pollutants into or upon land, the atmosphere or any watercourse or body of water; but this exclusion does not apply if such discharge, dispersal, release or escape is sudden or accidental. In 1980, the EPA stepped in and found 'alarmingly high concentrations of dioxin' and other toxic chemicals at all the sites involved. The EPA began the cleanup and also filed suit against D and others, seeking abatement costs. Eventually, the EPA sought reimbursement for its response costs. D and several other defendants, were found to be jointly and severally, strictly liable for cleanup costs under CERCLA. The EPA lawsuit prompted the filing of several other, related lawsuits, including the present case. In February 1984, P filed this action seeking a declaratory judgment concerning its liability to D. D1 filed a motion for leave to intervene in the present case. The district court granted summary judgment for P on count I (no liability insurance coverage for Denney farm site cleanup costs sought in the EPA lawsuit) and on D1's counterclaim (no liability insurance coverage for cleanup costs for the Minker/Stout/Romaine Creek site sought in the IPC lawsuit). The court held that the claims for cleanup costs were not claims for compensation for 'property damage.' It held that the cleanup costs were not incurred until 1980 and 1982, many years after the policies expired. The district court held that the federal and state governments did not suffer any 'loss' or 'damage' until the cleanup costs were actually incurred. Because there was no 'occurrence' of loss or property damage during the policy periods, the district court held there was no coverage. This appeal resulted.