Riehl v. Travelers Insurance Co.

No. 83-0085 Erie (W.D. Pa. August 7, 1984)

The court holds that an insurer that issued comprehensive general liability coverage to a hazardous waste site owner must indemnify and defend the site owner in a Comprehensive Environmental Response, Compensation, and Liability Act cleanup action. The property damages potentially covered by the policy include abatement costs aimed at preventing future damage. The alleged injury is to surface and sub-surface water, which is not property of the site owner within the meaning of the policy and so is covered.

Counsel for Plaintiff
Ralph Riehl III
Riehl & Bozza
2580 W. 8th St., Erie PA 16505
(814) 838-7920

Counsel for Defendant
William K. Harrington
Travelers Insurance Co., 580 Two Chatham Ctr., Pittsburgh PA 15219
(412) 456-4700

[15 ELR 20004]

MENCER, J.:

Memorandum

The factual background of this case is fairly set forth in plaintiff's brief filed in support of his Motion for Summary Judgment which is now pending before this Court. We set forth that background here.

Plaintiff purchased insurance policies from the defendant on July 1, 1980, including Comprehensive General Liability Coverage and Umbrella Coverage. New policies were purchased on January 1, 1981, January 1, 1982, and January 1, 1983. These policies provided plaintiff with uninterrupted insurance coverage from the defendant. The last policy was not delivered to plaintiff until the last week in December 1982.

The Comprehensive General Liability Coverage portions of the policies for each year stated as follows:

1. Page GL2 for the 1980 policy and page GL2-1 for the others, indicate that there is $1,000,000 aggregate coverage for bodily injury and/or property damage.

2. The policies at page GL5 for the 1980 policy and page GL5-1 for the others state:

The Company will pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay as damages because of Coverage A — Bodily Injury or Coverage B — Property Damage to which this insurance applies, caused by an occurence, and the Company shall have the right and duty to defend any suit against the insured seeking damages on account of such bodily injury or property damage. . .

3. Occurrence is defined at page GL1 to mean "an accident, including continuous or repeated exposure to conditions, which results in bodily injury or property damage neither expected nor intended from the standpoint of the insured. . ."

4. Property damage, on page GL1 "means (1) physical injury to or destruction of tangible property which occurs during the policy period, including the loss of use thereof at any time resulting therefrom, or (2) loss of use of tangible property which has not been physically injured or destroyed provided such loss of use is caused by an occurrence during the policy period."

5. Excluded under sub-section (k) on page GL5 is property owned by the insured.

Also purchased for each year was a "Catastrophe Umbrella Policy." Those policies provided coverage in the amount of $1,000,000 for the period July 1, 1980 to December 31, 1980 and in the amount of $4,000,000 for each policy year thereafter. For each policy, a $25,000 deductible applied. On page 2 the policies state "The Travelers will indemnify the Insured for all sums in excess of the deductible amount which the Insured shall become legally obligated to pay as damages because of injury to which this policy applies. One of the injuries included is Property Damage, defined on page 2 exactly as defined in the Comprehensive General Liability policies. Excluded from coverage pursuant to Section 8, page 2 is "damage to property owned by the insured."

On or about June 23, 1981, plaintiff's attorney was advised by Attorney Paul Burroughs of the Pennsylvania Department of Environmental Resources that illegal dumping activities had taken place at premises owned by plaintiff (hereinafter "site"). This property was among those covered by the Insurance referred to above, said property being known as 3109 West 12th Street, Erie, Pennsylvania.

A subsequent investigation by the Pennsylvania Department of Environmental Resources (DER) and the United States Environmental Protection Agency (EPA) has revealed that hazardous materials are present at the site and have contaminated the surface and sub-surface water on plaintiff's land. In addition, the investigation disclosed evidence that "Marshall Run," a stream which traverses the site and empties into Lake Erie is contaminated in locations away from plaintiff's land. This determination was in part the result of extensive scientific analysis of water and soil samples. Specifically, the EPA has notified the plaintiff in writing that it ". . . has documented the release and threatened release of hazardous substances, pollutants and contaminants at the Milcreek site in Erie County, Pennsylvania, EPA is anticipating expending public funds at this site to conduct a planned removal action as further detailed below."

The site is presently included on the EPA's "Superfund List" of most serious hazardous waste sites.

Plaintiff has been advised that the hazardous conditions on the property must not be allowed to continue and that the agencies involved will either undertake further investigatory and remedial action and look to plaintiff for reimbursement, or will order plaintiff himself to take such action. The EPA has already gone on the property, tested and removed a number of barrels.

Moreover, having notified the plaintiff of its assessment concerning the site's hazardous condition, the EPA further advised that:

Under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA), and other laws, responsible parties may be liable for all moneys expended by the federal government to take necessary response action at uncontrolled hazardous waste sites, including investigation, planning, removal and remedial actions at these sites, and enforcement. Responsible parties under CERCLA include the current and past owner and operator, and persons who generated the hazardous substances or were involved in transport, treatment or disposal of them at the site. Based on our review of EPA records, EPA has information that indicates that you or your company may be a responsible party as defined by CERCLA.

The letter continued by requesting the plaintiff's voluntary participation in remedial measures. In his deposition, Paul F. Burroughs, attorney for DER, testified that if the responsible parties do not voluntarily contribute to the cost of clean-up, ". . . then it would be our intention to join with EPA in instituting litigation in Federal District Court for the purposes of recovering this cost."

Plaintiff advised defendant of the above state of affairs and requested coverage. Travelers has repeatedly denied that it provided coverage as requested by the plaintiff. Although the defendant has conducted an independent investigation of plaintiff's claim, it has refused to provide the plaintiff with any assistance in mitigating his liability or damages, nor has it been willing prior to June 1984 to represent and defend the plaintiff in any manner. On two occasions, L. Thomas Lighthall, senior supervisor for Travelers, advised the plaintiff that there is no coverage for costs associated with the "clean-up of the insured's property." In Mr. Lighthall's letter of January 11, 1983 he specifically relates Travelers' position as follows:

It is The Travelers position that there is no coverage for costs involved in an "abatement remedy." First of all, we exclude coverage for damage to property owned by the insured. Further, it is our position that costs in connection with remedial action to avoid the future and/or further damage are not property damage within the intent of the [15 ELR 20005] policy. We will not provide coverage for clean up of the insured's property either for current damage, or to prevent future damage.

Our careful analysis of the instant case compels our conclusion that the plaintiff owns property which allegedly is causing pollution of waters of the Commonwealth of Pennsylvania. Such pollution willlikely continue so long as the condition of plaintiff's land remains unchanged. The measure of damages to the water, past, present and future, is not precisely calculable but includes abatement costs relative to preventing further pollution. The damages here involved are encompassed in the policy coverage for property damage and the defendant is contractually obligated to pay on behalf of the plaintiff all sums for which plaintiff may be found liable for pollution damages which have occurred or for sums for which plaintiff may be found liable to remedy and prevent further water pollution up to the coverage limits of the issued policies in question here.¹ See United States Aviex Co. v. Travelers Insurance Co., 336 N.W.2d 838 (Mich. App. 1983), Leebor v. United States Fidelity and Guaranty Company, 401 Pa. 477, 165 A.2d 82 (1960).

Further, we conclude that surface and sub-surface water on plaintiff's land is not property owned by the insured plaintiff within the meaning of the instant policies' exclusions and consequently coverage is provided for damages to the waters of the Commonwealth of Pennsylvania to the extent that plaintiff is held liable, attributable to the applicable periods of coverage, for such damages or the prevention of further damages. See Aronson Associates Inc. v. Pennsylvania National Mutual Casualty Insurance Company, 14 D&C 3d 1 (1977).

Finally, this Court is of the view that no material fact questions are in dispute which would prevent the granting of a summary judgment and that the instant action is justiciable, although the exact sums to which defendant may be liable is not yet determinable. See ACandS, Inc. v. Aetna Casualty and Surety Company, 666 F.2d 819 (3d Cir. 1981).

An appropriate order will follow.

Order

AND NOW, this 7th day of August, 1984, upon consideration of Plaintiff's Motion for Summary Judgment, IT IS ORDERED that judgment is entered in favor of the plaintiff, Ralph R. Riehl, Jr. and against the defendant, Travelers Insurance Co. and this Court determines and declares that

(1) Defendant afforded insurance to plaintiff which insurance covers for the years 1980, 1981 and 1982 liability for the disposal and subsequent leaching of hazardous or polluting substances relative to property owned by the plaintiff at 3109 West 12th Street, Erie, Pennsylvania;

(2) Defendant is obligated under the policies issued to defend the plaintiff in any action which the Department of Environmental Resources and/or Environmental Protection Agency may bring against the plaintiff which is attributable to the years of policy coverage, namely, 1980, 1981 and 1982.

(3) Defendant is obligated to plaintiff for all reasonable expenses incurred which relate to determine the identity of the parties responsible for the disposition of hazardous wastes at 3109 West 12th Street, Erie, Pennsylvania;

(4) the maximum amount the defendant is contractually obligated to pay on behalf of plaintiff for his liability attributable to the applicable coverage period and for recoverable expenses is as follows:

1980 policies $1,000,000 Basic Liability Coverage

$1,000,000 Umbrella Coverage

1981 policies $1,000,000 Basic Liability Coverage

$4,000,000 Umbrella Coverage

1982 policies $1,000,000 Basic Liability Coverage

$4,000,000 Umbrella Coverage

(5) Defendant is obligated to investigate possible methods to remove and/or contain the hazardous waste which is presently at 3109 West 12th Street, Erie, Pennsylvania; and

(6) Defendant is obligated to undertake such measures, necessary and feasible, that will prevent additional harm to others than the plaintiff, relative to the removal and/or containment of the hazardous waste at 3109 West 12th Street, Erie, Pennsylvania, the liability for which is attributable to the years of policy coverage, namely, 1980, 1981 and 1982.

1. The policies issued by the defendant to plaintiff for coverage commencing January 1, 1983 contain a pollution exclusion provision which bars coverage for any damages caused by any "emission, discharge, seepage, release or escape of any liquid, solid, gaseous or thermal waste or pollutant."