Jump to Navigation
Jump to Content

Sierra Recycling & Demolition, Inc. v. Chartis Specialty Insurance Co.

ELR Citation: 41 ELR 20343
Nos. 1:11-cv-00500-AWI-MJS, (E.D. Cal., 11/03/2011) (Ishii, J.)

A district court held that an insurance company should have provided coverage to a demolition company for damages stemming from its disposal of contaminated waste at a recycling drop-off center. The insurance policy excludes coverage for damages arising from the final disposal of any material at a site not owned, leased, or rented by the company. Because the company's final disposal of the debris was at a site the company did own not own, lease, or rent, the insurer argued that that exclusion applies. The company, meanwhile, argued that the exclusion does not bar the claim because "final disposal" is limited to the final disposal of material in landfills, not the final disposal as to the insured. Here, the material was not taken to a landfill. Rather, it was taken to a recycling drop-off center where it was later recycled, sold, or transported to another facility. From the plain language of exclusion, it is neither plain nor clear whether it is limited to the company's final disposal of materials, whether it includes disposal at non-owned landfills, or whether it would include a recycling processing facility such as the drop-off center. Both parties' interpretations, therefore, are reasonable. Accordingly, the exclusion is ambiguous and the policy must be construed in favor of the insured.