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Montana Ref. Co. v. National Union Fire Ins. Co. of Pittsburgh

ELR Citation: 26 ELR 21273
Nos. CV-N-92-845-ECR, 918 F. Supp. 1395/(D. Nev., 03/20/1996)

The court holds that under Nevada law, the U.S. Environmental Protection Agency's (EPA's) initiation of a cost recovery action against an insured under the Comprehensive, Environmental Response, Compensation, and Liability Act triggers the exclusion for hazardous-substance remedial action in the insured's commercial general liability insurance policy. The court first holds that Nevada law governs the case. The relevant policy has no choice-of-law provision and the contaminated site is in Nevada. The court next holds that the policy's definition of remedial action indicates that the exclusion contemplates cases in which the government brings suit to recover the costs of a cleanup or removal. The court next holds that the commonsense reading of the policy's exclusion clause is that when a hazardous substance has been released, there is no coverage if a government sues for natural resources damages, for remedial action, or both. Thus, the insured may not collect under the policy for EPA's cleanup costs.

Counsel for Plaintiff
Michael Thornton
Nossaman, Guthner, Knox & Elliott
50 California St., 34th Fl., San Francisco CA 94111
(415) 398-3600

Counsel for Defendant
Alfred A. Osborne
Law Offices of Alfred A. Osborne
555 S. Center St., Reno NV 89501
(702) 323-8678