Windham Solid Waste Management Dist. v. National Casualty Co.
Citation: 28 ELR 21374
The court holds that letters from a state agency demanding that a solid waste management district remediate landfill contamination constitute a claim that was made before the district's liability insurance policy went into effect, thereby precluding the district from seeking indemnification from its insurer. The court first holds that as a matter of law, the agency's claim against the district was made before the policy went into effect. Although the court did not find any cases in which the applicable state court has defined the term "claim," case law elsewhere indicates that the plain and ordinary meaning of claim is a demand for specific relief owed because of alleged wrongdoing. Thus, a claim may be something more than a formal suit, especially where, as here, the insurance policy treats "claims" and "suits" as separate terms. Moreover, there is nothing in the policy suggesting that this case law does not apply. While the policy contains no formal definition of the term "claim," it does state in a sub-section entitled "notice of claim" that the district must notify the insurer whenever it receives written or oral notice from any party that it is the intention of such party to hold the district responsible for any wrongful acts. Further, the state agency's letters constituted an allegation of wrongdoing coupled with a demand for specific relief. Next, the court rejects the district's argument that the letters do not amount to a claim because the letters did not amount to an enforcement action. A claim under the terms of the policy can be some demand well short of a formal enforcement proceeding. The court also rejects the district's argument that the letters amounted to only a threat of a claim because the extent of the required cleanup was not known. This interpretation is patently unreasonable, because even in the context of formal litigation, the total amount of damages is often not known when a complaint is filed.
Counsel for Plaintiff
John J. Boylan III
Boylan & Bowen
56 Main St., Springfield VT 05156
Counsel for Defendant
Shapleigh Smith Jr.
Dinse, Knapp & McAndrew
209 Battery St., Burlington VT 05402
Before McLaughlin and Shadur,* JJ.