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Maryland Casualty Co. v. Continental Casualty Co.

Citation: 33 ELR 20225
No. No. 01-7482, (2d Cir., 06/13/2003)

The court holds that under New York law, an insurer has no duty to defend a manufacturing company for environmental claims arising from gradual pollution under two insurance policies issued in 1973 and 1976. The gradual pollution clauses contained an exclusion for property damage resulting from pollution that was not "sudden and accidental." The gradual environmental pollution claims fall within the pollution exclusion clauses of the 1973 and 1976 general liability insurance policies, and not within the sudden and accidental exceptions to those clauses. New York Insurance Law §46(13)-(14), which was in effect from l971 until 1982, required all insurance policies to exclude coverage for nonsudden and accidental pollution, thereby preventing the insurer from insuring the company against gradual pollution in the 1973 and 1976 policies. Also in dispute was a third policy issued in 1983 that contained the same exclusion. New York Insurance Law §46(13)-(14), however, was not in effect when the 1983 policy was issued. Because the record is unclear as to whether gradual pollution was among the scope of the risks undertaken by the insurer in the 1983 policy, the court could not determine whether the insurer owed the company a duty to defend under the 1983 policy and remanded the issue.

Counsel for Appellee
Elizabeth M. Decristofaro
Ford, Marrin, Esposito, Witmeyer & Gleser
Wall St. Plaza, New York NY 10005
(212) 269-4900

Counsel for Appellant
Anthony J. Marchetta
Pitney, Hardin, Kipp & Szuch
711 Third Ave., New York NY 10017
(212) 687-6000