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New York v. Ludlow's Sanitary Landfill, Inc.

ELR Citation: 29 ELR 21304
Nos. No. 86-CV-0853, 50 F. Supp. 2d 135/(N.D.N.Y., 05/26/1999)

The court holds that an insurer need not provide coverage to a metal manufacturer that failed to give the insurer timely notice of a state claim seeking remediation of polychlorinated biphenyl (PCB) contamination. The manufacturer's insurance policies required it to immediately inform the insurer of any claim against it. The court first holds that the state had asserted a claim against the manufacturer by April 1983. By that time, it was clear that the manufacturer had dumped industrial waste at a site, PCBs had been identified at the site, the PCBs were attributable to a chemical, the manufacturer used that chemical, the state believed the manufacturer responsible for the PCBs at the site, and the state intended to hold the manufacturer responsible for cleanup, remediation, and damages to the environment. The court next holds that the manufacturer failed to give immediate notice of the claim to the insurer and did not offer a reasonable excuse for the delay. Under New York law, delays for one or two months are routinely held unreasonable. Here, the manufacturer waited at least six months to provide notice. Moreover, the manufacturer's claim that it acted reasonably because it did not believe it was responsible for the hazardous waste fails. The insured must give notice of an unreasonable assertion of liability, and an insured cannot excuse delay in giving notice of a claim based on a belief of nonliability no matter how well-founded that belief may be.

Counsel for Plaintiff
William J. McSherry Jr.
Battle Fowler Law Firm
Park Avenue Tower
75 E. 55th St., New York NY 10022
(212) 856-7000

Counsel for Defendants
Michael W. Morrison
Tressler, Soderstrom, Maloney & Priess
Sears Tower
233 S. Wacker Dr., 22d Fl., Chicago IL 60606
(312) 627-4000