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Agency of Natural Resources Harbor Management Corp. v. United States Fire Insurance Co.

ELR Citation: 32 ELR 20364
Nos. 2000-287, 796 A.2d 476/(Vt., 11/21/2001)

The court affirms a lower court decision ordering an insurance company to pay restitution to the state of Vermont for costs incurred in the investigation and cleanup of an underground petroleum leak. After an underground petroleum tank was found to be contaminating a town's drinking water, the state ordered the owner of the tank to clean up the contamination. In so doing, the owner received reimbursement from the state petroleum cleanup fund. The state then filed suit against the owner's insurance company seeking reimbursement for its cleanup and investigation costs. A trial court found in favor of the state, and the insurance company appealed. The court first holds that although the state is not insured by the insurance company, it has standing. The petroleum cleanup fund statute authorizes the state to seek restitution to the fund for cleanup expenditures where there is insurance coverage for pollution damages. Moreover, although an endorsement to the policy excludes costs associated with a state-directed cleanup of an owner's property, state-directed cleanup costs are covered by the policy if, as here, the insured caused third-party property damage. The court next holds that the facts were sufficient to find that the underground petroleum leak was an occurrence that triggered coverage under the policy. The trial court, however, failed to establish an allocation of damages. The case was therefore remanded on this issue

The full text of this decision is available from ELR (8 pp., ELR Order No. L-418).

Counsel for Plaintiff
William E. Griffin, Chief Ass't Attorney General
Attorney General's Office
109 State St., Montpelier VT 05609
(802) 828-3171

Counsel for Defendants
John L. Putnam
Stebbins, Bradley, Wood & Harvey
41 S. Park St., Hanover NH 03755
(603) 643-3737