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New Castle County v. Hartford Accident & Indem. Co.

ELR Citation: 22 ELR 20638
Nos. No. 85-436-JLL, 778 F. Supp. 812/(D. Del., 10/31/1991, 11/21/1991) Declaratory judgment granted on remand

The court holds that a pollution exclusion clause in a comprehensive general liability insurance policy does not bar an insured county's right to indemnification of amounts that it must pay in lawsuits resulting from pollution from a landfill. The clause provided that the insurer was not obligated to indemnify the insured for damage arising out of the release of contaminants into or upon land, the atmosphere, or any watercourse or body of water. The court first notes that the county expected the discharge or release of a substance from the landfill. The entire design of the landfill reflected an understanding that leachate would filter through the soil into the surrounding land and water, and other evidence suggests that the discharge of leachate was not unexpected. However, the court finds that there was no understanding of the environmental hazards from the drainage of leachate on the part of either the landfill operators or the insurance companies at the time of the landfill's construction. The court holds that the parties' understanding of the term "contaminant" as used in the policy is determined by what was recognized as a contaminant at the time the policy was issued. Further, because the risk that a certain substance will later be discovered to be a pollutant is not reasonably foreseeable, it is not the kind of risk that is normally placed on the insured. This is consistent with the purpose of the pollution exclusion clause to provide a strong incentive to take precautions to minimize the risk of environmental damage. The court thus holds that the insurer has not overcome its burden of proving that the county expected to discharge or release contaminants into or upon the land or any watercourse or body of water.

Counsel for Plaintiff
George H. Seitz
Prickett, Jones, Elliott, Kristol & Schnee
1310 King St., P.O. Box 1328, Wilmington DE 19899
(302) 888-6500

Catherine J. Sponseller
Anderson Kill Olick & Oshinsky
2000 Pennsylvania Ave. NW, Washington DC 20006
(202) 728-3100

Counsel for Defendant
John G. Mulford
Theisen, Lank, Mulford & Goldberg
1 Commerce Ctr., 9th Fl., P.O. Box 1470, Wilmington DE 19899
(302) 656-7712

Arthur Makadon
Ballard, Spahr, Andrews & Ingersoll
1735 Market St., 51st Fl., Philadelphia PA 19103
(215) 864-8100