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Harleysville Mut. Ins. Co. v. Sussex County

Citation: 25 ELR 20484
No. No. 94-7011, 46 F.3d 1116/(3d Cir., 12/28/1994) Aff'd

The court holds that under Delaware law, pollution exclusion clauses in comprehensive general liability insurance policies that two insurance companies issued for a county landfill bar coverage for liability arising from contamination at the landfill. The court first holds that the discharges of contaminants that invoked a notice of potential liability from the U.S. Environmental Protection Agency (EPA) and gave rise to the county's insurance claims were not unexpected and unintended for purposes of the sudden and accidental exception to the pollution exclusion clauses. The county knew that it was discharging known contaminants. That it did not know that it was discharging a hazardous substance under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) is irrelevant. The court holds, therefore, that the insurance companies had no duty to indemnify the county for liability arising from the discharge of contaminants at the landfill. The court next holds that EPA's "notice" that the county was a potentially responsible party under CERCLA, and the resulting negotiation process, does not constitute a "suit" within the meaning of the insurance policies for purposes of triggering the companies' duty to defend. The court holds that EPA's notices did not initiate a proceeding that was sufficiently adversarial in nature to constitute the functional equivalent of a lawsuit. EPA had merely invited the county to participate in the formative stages of site cleanup.

[The district court's decision is published at 24 ELR 20296.]

Counsel for Petitioner
Anthony J. Zarillo Jr.
Riker, Danzig, Scherer, Hyland & Perretti
Headquarters Plaza
One Speedwell Ave., Morristown NJ 07962
(201) 538-0800

Counsel for Respondent
Gregory A. Inskip
Potter, Anderson & Corroon
350 Delaware Trust Bldg.
P.O. Box 951, Wilmington DE 19899
(302) 984-6016