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Waste Management of Carolinas, Inc. v. Peerless Ins. Co.

Citation: 17 ELR 20145
No. No. 70PA85, 340 S.E.2d 374/24 ERC 1001/315 N.C. 688, (N.C., 02/18/1986)

The court holds that insurers have no duty to defend their insured from third-party complaints filed by the owners, operators, and franchisor of a landfill seeking indemnification for their liability in a Resource Conservation and Recovery Act suit filed by the federal government. The court first holds that the arguably unintended, unexpected leaching of contaminants into the groundwater that resulted from the insured's alleged dumping of waste containing hazardous materials constituted an occurrence within the meaning of the insurance policy. The court then holds that the release falls within the policy's pollution exclusion. The court notes that the focus of the exclusion clause is not on the accidental nature of the release, but on the fact that the release causes pollution or contamination. Finally, the court holds that the release may not be brought back within the policy's coverage through the "sudden and accidental" exception to the pollution exclusion. While the discharge was arguably accidental, neither the third-party complaints nor a deposition of an officer of the insured alleges that the dumping or the release was sudden. Instead, they indicate that thedumping was performed by the insured as a routine part of its waste hauling business and the release into the groundwater occurred gradually.

[Decisions in the federal government's action are published at 13 ELR 20286, 14 ELR 20461, and 16 ELR 20502.]

Counsel for Plaintiff-Appellee
D. Kendall Griffith, William J. Holloway, Joanna C. New
Hinshaw, Culbertson, Moelmann, Hoban & Fuller
Suite 2700, 69 W. Washington St., Chicago IL 60602
(312) 630-4400

Counsel for Defendant-Appellant
Carlton S. Prickett Jr.
Prickett & Corpening
P.O. Box 867, Wilmington NC 28402
(919) 762-1845