Jump to Navigation
Jump to Content

Pacific Hide & Fur Depot v. Great American Insurance Co.

ELR Citation: 44 ELR 20122
Nos. CV 12-36-BU-DLC, (D. Mont., 05/23/2014) (Christensen, C.J.)

A district court held that an insurance company breached its duty to defend a steel company in an underlying contribution case under Montana's Comprehensive Environmental Cleanup and Responsibility Act (CERCA) stemming from the company's alleged release or threatened release of hazardous substances at a site in Bozeman, Montana. In a letter dated January 2, 1996, the state's environmental agency notified the steel company that it had been identified as a potentially liable party (PLP) under CERCA—the state's version of CERCLA. In 2004, the steel company filed a claim letter with its insurer, but the insurer denied its request for defense and indemnity. In 2007, the steel company entered into a consent decree in which it agreed to a 15% allocation of liability for the site. The city of Bozeman undertook the state-mandated cleanup of the site. And in 2010, the steel company paid the city $650,000--the steel company's 15% allocation. The steel company then filed suit against its insurer for breach of contract. The insurer argued that because no "suit" or "complaint" was filed at the time it received the claim letter in 2004, it had no duty to defend the insured. But the court disagreed. PLP notices issued under CECRA are "suits" triggering an insurer's duty to defend. The insurance company's duty to defend was therefore triggered when it was presented with the steel company's request for coverage and the PLP letters. By denying the request, the insurance company breached its duty.