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Advanced Envtl. Tech. Corp. v. Brown

ELR Citation: 31 ELR 20189
Nos. Nos. 99-2228, 00-1047, 232 F.3d 886/(4th Cir., 10/02/2000)

The court holds that an insurance agent is liable to a hazardous waste removal company for the negligent misrepresentation of an insurance contract that was supposed to provide basic pollution coverage to the removal company's subcontractor. The agent gave the removal company a certificate of insurance that stated that the subcontractor had coverage for sudden and accidental pollution losses, but he failed to disclose that the policy contained an exclusion clause that eliminated this coverage. Consequently, after the subcontractor accidentally caused 40 gallons of polychlorinated biphenyls (PCBs) to leak from a hazardous waste removal site, the insurance companies declined to cover the cleanup costs. The court first holds that the district court properly found that the policy did not provide coverage for the PCB contamination. The exclusion clause clearly and unambiguously excludes coverage for the accident at issue. The court next holds that the agent was liable for negligent misrepresentation for providing the removal company with the misleading certificate of insurance. The removal company was not required to request and review the policy referenced in the certificate of insurance, and it had no reason to request one given the statements contained in the certificate. The court then holds that the district court's decision to award judgment in the amount of full reimbursement costs was not clearly erroneous. The court had ample opportunity to weigh the credibility of the agent's expert in light of the rest of the evidence in the case. Last, the court upholds the district court's refusal to award the company and subcontractor prejudgment interest because their claims sounded in tort rather than in contract law.

Counsel for Plaintiff
Michael J. McManus
Drinker, Biddle & Reath
1500 K St. NW, Ste. 1100, Washington DC 20005
(202) 842-8800

Counsel for Defendants
David J. McManus Jr.
Baxter, Baker, Sidle & Conn
120 E. Baltimore St., Baltimore MD 21202
(410) 230-3800

Before Widener, Niemeyer, and Keeley, JJ.