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

ELR Citation: 22 ELR 21365
Nos. No. 91-3857, 970 F.2d 1267/35 ERC 1965/(3d Cir., 07/28/1992) Rev'd & remanded

The court holds in a case of first impression under Delaware law that the term "contaminants" in a comprehensive general liability policy pollution exclusion clause is unambiguous and carries no implied scienter element. The court holds that when a polluter discharges contaminants, whether or not he knows them to be contaminants, coverage is excluded under the insurance policy. The court holds that under the plain terms of the pollution exclusion clause, the term "sudden and accidental," which imputes a scienter element, only modifies "discharge," not "contaminants." Though it is possible to construe "sudden and accidental" as modifying both "discharge" and "contaminants," this construction is not reasonable. To find otherwise requires accepting the proposition that the insurance policy excludes coverage in numerous other instances, because there is no principled means to include the scienter element in one term of the clause but exclude it in the other. Moreover, the insurance policy nowhere hints that the term "contaminants" carries with it a scienter element. Considered in the semantic and functional contexts of the pollution exclusion clause, knowledge of the nature of the substance discharged is irrelevant.

[Prior court decisions in this case are published at 21 ELR 21079, 21153, and 22 ELR 20638.]

Counsel for Appellant
Arthur R. Makadon
Ballard, Spahr, Andrews & Ingersoll
1735 Maple St., 51st Fl., Philadelphia PA 19103
(215) 665-8500

John G. Mulford
Theisen, Lank, Mulford & Goldberg
One Commerce Ctr., 1201 Orange St., 9th Fl.
P.O. Box 1470, Wilmington DE 19899
(302) 656-7712

Counsel for Appellee
Joseph D. Tydings
Anderson, Kill, Olick & Oshinsky
2000 Pennsylvania Ave. NW, Ste. 7500, Washington DC 20006
(202) 728-3100

Lydia F. Anderson
New Castle County Law Department
800 French St., 8th Fl., Wilmington DE 19801
(302) 571-7530

Before Greenberg and Pollak*, JJ.