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Armotek Indus. v. Employers Ins. of Wausau

ELR Citation: 22 ELR 20561
Nos. Nos. 90-5969, -6001, 952 F.2d 756/34 ERC 1772/(3d Cir., 12/31/1991)

The court, applying Pennsylvania law, holds that an insured cannot recover the costs of a state-mandated cleanup of hazardous waste under general liability insurance policies. The court first holds that Pennsylvania rather than New Jersey law applies. Pennsylvania was the place of contracting and performance. When the policy was first issued, all of the insured's facilities were in New Jersey, but the insured later acquired facilities in Pennsylvania and Connecticut. The Connecticut facility gave rise to the claims at issue here. The insured was a New York corporation with its principal place of business in New Jersey. The facts that New Jersey imposed a surcharge on the policies and the policies bore a New Jersey amendatory endorsement have little significance for choice-of-law purposes. The court concludes that the district court correctly reasoned that these factors weigh in favor of applying Pennsylvania law. The court next holds that the insured cannot recover for pollution damages under the policies because no "occurrence" caused property damage while the policies were in effect. The property damage from a 1977 spill of chromic acid did not occur during the policy period, which began in 1979. The court declines to apply the continuous trigger approach used for determining when bodily injury caused by asbestos exposure occurs. The court also holds that the insurer did not breach its duty to defend. Nothing in an order from the Connecticut Department of Environmental Protection suggested a sudden and accidental release of pollution that would trigger the insurer's duty to defend.

Counsel for Appellant
John P. O'Dea, Craig R. Blackman
Stradley, Ronon, Stevens & Young
2600 One Commerce Sq., Philadelphia PA 19103
(215) 564-8000

Thomas P. Farnoly
Gruccio, Pepper, Giovinazzi & DeSanto
538 Landis Ave., CN 1501, Vineland NJ 08360
(609) 691-0100

Counsel for Appellee
Janet L.R. Menna, William G. McElroy
Zelle & Larson
95 Sawyer Rd., 3 University Office Park, Ste. 55, Waltham MA 02154
(617) 891-7020

Alito, J. (before Mansmann and Diamond,* JJ.):