|
30 ELR 20001 | Environmental Law Reporter | copyright © 1999 | All rights reserved Employers Insurance of Wausau v. Duplan Corp.No. 94 Civ. 3143 (CSH) (S.D.N.Y. September 28, 1999)The court holds that under New York law, insurers are not obligated to defend and indernnify a clothing manufacturer from private and government damage claims stemming from contamination at the manufacturer's New York and Virgin Islands facilities. The manufacturer acquired the two facilities from separate companies, but the alleged contamination occurred during the manufacturer's ownership. In 1981, the manufacturer declared bankruptcy, reorganized, liquidated, and formed a successor trust to satisfy contingent liabilities. The court first holds that the pollution exclusion clause in each of the manufacturer's policies precludes the insurers' duty to defend and indemnify. A previous district court required the insurers to defend because the insurers could not demonstrate that the alleged pollution did not fall within the sudden and accidental exception to each policies' pollution exclusion clause. A subsequent New York decision, however, requiredthe insured to prove that the alleged pollution fit within the sudden and accidental exception. The alleged disposal at both sites was intentional, long-lasting, and therefore manifestly not sudden and accidental under New York law. Moreover, the manufacturer could not show that an issue of fact exists as to whether the alleged pollution could have been sudden and accidental. The court then holds that the manufacturer cannot rely on regulatory estoppel as a basis for nullifying the pollution exclusion clause. Because the policies' pollution exclusion clause is clear and unambiguous, the court lacks authority under New York law to admit extrinsic evidence of insurance industry representations that the policies would cover intentional discharge despite inclusion of the pollution exclusion. Moreover, regulatory estoppel is unavailable for intentional disposal of pollutants. The court next holds that the owners of the clothing manufacturer qualify as insureds under one insurer's policies, and, therefore, the insurer must defend the owners from claims against them personally for activities at the Virgin Islands facility. The language of the policy plainly covers officers and directors for liability arising from acts taken while serving in their corporate role. Although the claims against the owners seek personal Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) operator liability, individuals liable under CERCLA are still entitled to insurance coverage for claims where they are a party due to their role as a corporation's officer or director. All of the claims against the owners could fit under any common and reasonable definition of an officer's duties. Similarly, the court holds that the insurer cannot escape its duty to defend the manufacturer based on the argument that an occurrence of property damage at the Virgin Islands facility did not occur during the insurance period. Although the policy allegedly covering the occurrence period is lost, an insurance broker confirmation is sufficient to determine that the insured issued the manufacturer a policy for the relevant period. Further, the contamination of the aquifer at the site is the injury-in-fact that triggers coverage under New York law, and such contamination arguably could have occurred during the policy period. The court, however, does hold that the insurer need not defend the successor trust from claims against it. The manufacturer's reorganization did not include one company's assets, which included the policy at issue. Therefore, the trust has no standing to assert rights under the policy. The court then declares that one insurer is not obligated to defend or indemnify the manufacturer in connection with the New York claims. The insurer issued some of its policies before the manufacturer acquired the New York facility and such policies do not cover activities before that date. The coverage limits of other policies have been exhausted, and the pollution exclusion clause in the remaining policies precludes coverage. Last, the court allows an insurer to amend its answer to the complaint because the insurer did not constructively waive its right to assert all defenses. [Related cases in this litigation are published at 27 ELR 21494 and 28 ELR 21296.] Counsel for Plaintiff Christopher J. Carney Counsel for Defendants Haight, J.: Employers Insurance of Wausau ("Wausau") initiated this declaratory judgment action to determine its obligation, if any, to defend and indemnify the Duplan Corporation ("Duplan"), Laga Industries, Inc. ("Laga"), Panex Industries, Inc., Panex Company ("Panex Co."), Rochester Button Company, Inc. ("Rochester Button"), Capital Plastics Company, Andreas Gal and Paul Lazare (collectively the "Duplan Defendants")1 in connection with lawsuits arising from pollution in two sites where Laga and Rochester Button, respectively, had manufacturing operations: the Tutu Wells section of St. Thomas, U.S. Virgin Islands, and Wellsville, New York. Wausau also seeks a determination of its rights vis-a-vis other insurers that issued policies to the Duplan Defendants. Wausau and several of the other insurers have filed summary judgment motions seeking declarations that they are not obligated under the terms and conditions of their policies to defend or indemnify the Duplan Defendants in connection with the pollution claims. One insurer also moves to amend its answer and to compel discovery. This Opinion resolves these motions. The factual background of this case is more thoroughly set forth in this Court's Memorandum Opinion and Order dated September 11, 1995, familiarity with which is assumed. See Employers Insurance of Wausau v. The Duplan Corp., 899 F. Supp. 1112, 1126-27 (S.D.N.Y. 1995). The facts will be recited only to the extent necessary to explain the resolution of the motions at bar. Duplan was a corporation engaged in the textile business for many decades beginning in the early part of this century. Over the years, Duplan expanded its business by acquiring companies including Laga and Rochester Button. In 1976, facing financial difficulties, Duplan filed a petition for bankruptcy. In 1981, Duplan was reorganized and recapitalized under Chapter 11 and emerged under the name Panex Industries, Inc. ("Panex"). In 1985, its financial difficulties having proved insurmountable, Panex was liquidated by its stockholders, who thereupon formed the Panex Trust (the "Trust") under Delaware Law for the purpose of holding certain assets to satisfy Panex's contingent liabilities. The Trust terminated by its terms in September of 1997. Following its termination, the Delaware Chancery Court created the "Successor" Panex Trust as a successor to the Panex Trust and to Panex. The Successor Trust, represented by separate counsel, has been substituted for Panex as a party in this action.2 From about 1970 to 1979, Laga, then a wholly-owned subsidiary of Duplan, owned and operated a textile manufacturing plant in the Tutu Wells section of St. Thomas, U.S.V.I. Gal and Lazare were the original shareholders of Laga, which they sold to Duplan in 1970.3 Laga was dissolved in 1981. In or about 1979, while Duplan was in reorganization proceedings, Laga sold its Tutu Wells site to Panex Co., the New York general partnership formed by Gal and Lazare. In 1982, Panex Co. sold the old Laga site to the government of the Virgin Islands, its current owner. Laga used perchloroethylene ("PCE") on a regular basis to dry-clean the cloth it manufactured. In 1987, water wells fed by an underground water system in the Tutu Wells region known as the Turpentine [30 ELR 20002] Run Aquifer (the "Aquifer") were discovered to be contaminated by chemicals which included PCE. The Laga site, located above ground approximately 250 feet west of a tributary of the Aquifer, was later found to be contaminated with PCE. The United States Environmental Protection Agency ("USEPA") subsequently designated Laga as one of a number of potentially responsible parties for the Aquifer's contamination. Certain property owners whose wells were contaminated brought complaints for damages against Esso Standard Oil, S.A., Texaco, Inc. and certain other defendants in Virgin Islands federal district court in 1989, and amended those complaints in 1992 to add claims against Laga and certain other Duplan Defendants. Senior District Judge Stanley S. Brotman, whose regular duty station is at Camden, New Jersey, has been presiding over that case since its inception. During all times relevant to this case, Rochester Button operated a button manufacturing plant in Wellsville, New York. Duplan acquired Cap-Roc, Inc., the sole shareholder of Rochester Button, by merger agreement dated August 21, 1969, pursuant to which Rochester Button became a division of Duplan. Rochester Button allegedly used hazardous waste materials in its manufacturing process which it disposed of at the Wellsville/Andover landfill. In or about 1983, the landfill and ground water emanating from it were found to be contaminated by hazardous chemicals including those Rochester Button used. In 1994, the State of New York brought an action against numerous defendants including Rochester Button and certain of the other Duplan Defendants seeking recovery of the costs of clean-up of the landfill and the surrounding land and groundwater. The above-described Virgin Islands and Wellsville claims, as well as third- party claims brought by other defendants in the Virgin Islands against the Duplan Defendants, have resulted in the Duplan Defendants' requests for coverage under the various insurance policies at issue here. B. Prior Decision of This Court A previous round of summary judgment motions resulted in this Court's opinion dated September 11, 1995, the sole opinion issued to date in this case (the "1995 Opinion"). In that opinion, the Court held that Wausau, Continental Casualty Company ("CNA"), Hartford Accident and Indemnity Company ("Hartford") and National Union Fire Insurance Company of Pittsburgh, PA ("National Union")4 were obligated to bear the costs of defending the Duplan Defendants against the claims arising from the Virgin Islands pollution. Employers Insurance of Wausau v. The Duplan Corp., 899 F. Supp. 1112, 1126-27 (S.D.N.Y. 1995). The Court's resolution of the duty to defend centered upon whether the claims asserted in the Virgin Islands action were barred by the pollution exclusion contained in the comprehensive general liability ("CGL") policies issued by the moving insurers. This exclusion, virtually identical in all of the subject policies, provides: This insurance does not apply . . . To bodily injury or property damage arising out of the discharge, dispersal, release or escape of . . . toxic chemicals, liquids or gases, waste materials, or other irritants, contaminants or pollutants into or upon land, the atmosphere or any water course or body of water; but this exclusion does not apply if such discharge, dispersal, release or escape is sudden and accidental. In the 1995 Opinion, the Court recognized that the underlying Virgin Islands complaints alleged systematic, long-standing pollution which fell squarely within the exclusion's prohibition. Nonetheless, the Court held that extrinsic evidence submitted by the Duplan Defendants created the reasonable possibility that any discharge by Laga of PCE could have only been "sudden and accidental," which triggered the exclusion's eponymous exception. Under New York duty to defend jurisprudence, the Court held that this extrinsic evidence and the possibility of coverage it raised required the insurers to defend. However, because issues of fact remained as to the circumstances of any PCE discharge, which the Duplan Defendants deny, the Court declined to determine the insurers' obligations to indemnify the Duplan Defendants for any Virgin Islands liability. In the years since the 1995 Opinion, all of Wausau's claims against all defendants in this declaratory judgment action related to defense and indemnification for the Virgin Islands pollution claims have been settled, along with disputes among certain of the other insurers concerning the allocation of defense costs for the Virgin Islands claims. Unfortunately, the settlements were not global. Certain of the insurers continue to vigorously contest whether they are obligated to indemnify and defend the Duplan Defendants for claims arising from both the Virgin Islands and Wellsville sites. The Duplan Defendants have settled the original underlying property damage claims in the Virgin Islands action that were filed by Four Winds Plaza Partnership, members of the Harthman family and P.I.D. Inc., which owned or leased wells that were contaminated. Since the initial Four Winds/Harthman complaints, five separate third-party complaints have been filed in that consolidated action by entities responsible for costs incurred in clean-up of the Aquifer and the Laga site. These third-party claims, which remain pending in the case before Judge Brotman, presently assert causes of action against the Successor Trust, Gal and Lazare for contribution under the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601 ("CERCLA") and for disgorgement and restitution under the common law. Counsel informs the Court that trial on the third-party claims is scheduled to commence in late 1999.5 The State of New York's CERCLA action to recover the costs of investigation and remediation of the pollution at the Wellsville/Andover landfill also remains pending. In October of 1997, Senior District Judge John T. Elfvin, who is presiding over that case in the Western District of New York, granted a motion by Gal and Lazare to dismiss the complaint as against them. The Successor Trust remains a defendant in that case. The following six motions are presently sub judice: (1) a motion by Firemen's Insurance Company of Newark, New Jersey ("Newark") for leave pursuant to Fed. R. Civ. P. 15(a) to file an amended answer and cross-claims; (2) a motion by Newark and National Union to compel the Duplan Defendants to respond to discovery requests; and (3) four separate motions for summary judgment filed by Hartford, Wausau, CNA and Newark (joined by National Union and American Home). Because the summary judgment motions are potentially dispositive of the coverage claims, this Opinion will address them first. In addition to certain insurer-specific matters, the motions present two overarching legal issues involving application of the pollution exclusion. I will consider these common issues initially. CNA, Hartford (joined by National Union) and Wausau (the "moving insurers") each seek declarations that no coverage is owed to the Duplan Defendants for claims arising from the Wellsville and Virgin Islands pollution because such coverage is barred by the pollution exclusion clause contained in each subject policy.6 The crux of their argument is that the pollution exclusion bars coverage because the allegations in the underlying complaints place the claims squarely within its boundaries, and the Duplan Defendants have not produced any extrinsic evidence putting into play its sudden and accidental exception. [30 ELR 20003] This argument is a reprise of one made by the same moving insurers and addressed by the Court in the 1995 Opinion. It has resurfaced because of a recent decision of the New York Court of Appeals which the moving insurers maintain constitutes a change in controlling precedent which now entitles them to summary judgment. See Northville Industries Corp. v. National Union Fire Ins. Co., 89 N.Y.2d 621, 657 N.Y.S.2d 564, 679 N.E.2d 1044 (1997). Because the moving insurers seek in effect to overturn a salient aspect of the 1995 Opinion, principally in reliance on Northville, a summary of those decisions will be useful. It is well-settled that "an insurer's contractual duty to defend is broader than its duty to indemnify. An insurer's duty to defend arises when a complaint against the insured alleges facts, no matter how false or groundless, which give rise to any potential liability covered by the terms ofthe policy provided by the insurer." 899 F. Supp. at 1119 (citations omitted). Adhering to these precepts, the 1995 Opinion concluded that the allegations contained in the Four Winds/Harthman complaints—that over a period of eight years Laga routinely disposed of PCE through a pipe into an open pit on the Laga site—alleged intentional and long-lasting disposal of waste which was not "sudden and accidental" under New York law. Id. at 1121-22.7 The conclusion that allegations within the four corners of the underlying complaints negated the possibility of sudden and accidental disposal did not end the inquiry. The Court held that the Duplan Defendants had presented extrinsic evidence giving rise to a "reasonable possibility" that discharge of PCE, if any, could have been sudden and accidental, thereby triggering the duty to defend. In relevant part, the Court reasoned: Based on my review of [testimony by former employees of Laga, the firm that designed Laga's facility, and the vendor of Laga's dry-cleaning system], I conclude that there is some evidence demonstrating that no drainage pipe extended from the dry-cleaning machine in which the PCE was used, and that no pit existed. The reasonable inference to be drawn from this evidence is that PCE could not have been discharged through a pipe and into a pit. As such, the evidence casts doubt, I put it no higher than that, on the viability of the pipe and pit theory relied upon in the third-party complaints . . . . Although the Duplan Defendants have not come forward with concrete evidence of a sudden and accidental event causing discharge of PCE, I do not believe that they must do so to trigger the duty to defend. After all, the Duplan Defendants contend that they did not cause any discharge of PCE, and it is the burden of the Insurers to demonstrate that no possibility of coverage exists. With these observations in mind, I conclude that in the aggregate, the evidence submitted by the Duplan Defendants gives rise to the reasonable possibility that the Duplan Defendants may be found liable for the sudden and accidental discharge of PCE. In so saying, I recognize that the facts are disputed. I do not undertake to reconcile the competing evidence or to determine the cause of the pollution, if any can be attributed to the Duplan Defendants. Instead, my obligation in determining whether a duty to defend exists is to decide whether the extrinsic facts of which the Insurers were or should have been aware demonstrate the reasonable possibility of a covered occurrence. 899 F. Supp. at 1126-27 (underscoring in original; italics added). In so holding, the Court relied upon State of New York v. Blank, 27 F.3d 783, 788-89 (2d Cir. 1994), in which the Second Circuit held that under New York law "where an exclusion [in an insurance policy] allows for an exception, the insurer bears the burden of showing that the exception to that exclusion does not apply." Accepting that it was the insurer's burden to demonstrate that the exception had no application, this Court did not require the Duplan Defendants to prove the converse—i.e., to come forward with definitive evidence of a sudden and accidental event. Rather, given Blank's allocation of the burden, the Court held the Duplan Defendants' creation of an issue of fact as to whether the alleged pipe and pit theory was viable sufficed to invoke the duty to defend. Northville, issued a year later, changes the landscape. It clarifies that the burden of proving coverage for pollution under a "sudden and accidental" exception is the antithesis of that applied in Blank. When pollution damage is at issue, Northville instructs that it falls to the insured to show that coverage is triggered by operation of the exception. 89 N.Y.2d at 634, 657 N.Y.S.2d 564, 679 N.E.2d 1044. As a preliminary matter, Northville defined the word "sudden" to contain a temporal aspect that can "only be met by the discharge, abruptly or within a short timespan, of a significant quantity of the pollutant sufficient to have some potentially damaging environmental effect. When such a discharge was unintended and unexpected [i.e., 'accidental'], the sudden and accidental exception in the pollution exclusion clause will have been satisfied." 89 N.Y.2d at 634, 657 N.Y.S.2d 564, 679 N.E.2d 1044. Next, and most significantly for present purposes, the Court of Appeals determined that contrary to the approach taken by the Second Circuit in Blank and perforce followed by this Court, it is the burden of the insured to nullify the exclusion by fitting the underlying pollution claims within the exception. As the Court of Appeals instructed: Once an insurer has satisfied its burden of establishing that the underlying complaint alleges damages attributable to the discharge or release of a pollutant into the environment, thereby satisfying the basic requirement for application of the pollution coverage exclusion provision, the burden shifts to the insured to demonstrate a reasonable interpretation of the underlying complaint potentially bringing the claims within the sudden and accidental discharge exception to exclusion of pollution coverage, or to show that extrinsic evidence exists that the discharge was in fact sudden and accidental. Shifting the burden to establish the exception conforms with an insured's general duty to establish coverage where it would otherwise not exist, provides the insured with an incentive to strive for early detection that it is releasing pollutants into the environment and appropriately places the burden of proof on the party having the better and earlier access to the actual facts and circumstances surrounding the discharge. 89 N.Y.2d at 634, 657 N.Y.S.2d 564, 679 N.E.2d 1044 (emphasis added). In Northville, the trial court had held that insurers were obligated to defend property damage claims arising from gas leaks because it could not be determined initially if the leaks occurred suddenly or not. Applying the articulated burden, the Court of Appeals affirmed the Appellate Division's reversal of this holding, reasoning that the underlying complaints lacked allegations from which a sudden discharge could be inferred and that the plaintiff's own admissions suggested continuous, and therefore non-sudden, leakage. Plaintiff had therefore failed to sustain its burden of showing that the sudden and accidental exception applied and the insurers accordingly had no duty to defend or indemnify the claims. Id. at 635, 657 N.Y.S.2d 564, 679 N.E.2d 1044. It is clear enough that Northville, the controlling law in this diversity action, applies a different burden than this Court did in its 1995 Opinion. Thus, the summary judgment motions require this Court to revisit the issue, allocating the burden as Northville requires. The Four Winds/Harthman complaints alleged that the Duplan Defendants routinely discharged PCE from the Laga facility through a pipe and into a pit. As noted, these claims have been settled, although third-party claims remain pending. Two of the third-party complaints (which are described more fully in Part II(C), infra) allege that the Duplan Defendants "used, stored and disposed of [PCE] in the Laga Facility's yard and/or waste pit." See Affidavit of Peter A. Von [30 ELR 20004] Mehren dated November 21, 1997 ("Von Mehren Aff."), Ex. 4(C) at P22. Another alleges that a means of PCE disposal at the Laga facility was "through a pipe designed to carry the PCE effluent from the process into an open pit at the outside of the facility." See Affidavit of Charles A. Booth dated June 21, 1999 ("Booth Aff."), Ex. G at P91. The remainder of the complaints paint with a broader brush, alleging generally that the Duplan Defendants "stored, used and/or disposed of hazardous wastes, which were released or otherwise came into contact with the soil and groundwaters." Id. Ex. 4(D) at P31. As for the Wellsville action, the State of New York alleges that over an unspecified period of time Rochester Button "arranged for disposal of hazardous substances" at the Wellsville/Andover landfill. See Affidavit of Neil Sambursky dated September 18, 1998 ("Sambursky Aff."), Ex. O at 12. It is not disputed that the pollution exclusion applies to these claims because they all involve the release of pollutants into the environment. Under Northville, the burden then shifts to the Duplan Defendants to plug the exclusion's hole in insurance coverage, by demonstrating that the exclusion is overridden by the "sudden and accidental" exception. They can do this by offering a reasonable interpretation of the allegations bringing them potentially within the exception, or by offering extrinsic evidence to show that the discharge was sudden and accidental. The first method is not urged on the Court, nor could it be because the underlying claims are not reasonably susceptible of any such interpretation. As the Northville court emphasized: In determining whether the underlying complaint can be read as even potentially bringing the claim within the sudden and accidental exception to the exclusion of pollution coverage, a court should not attempt to impose the duty to defend on an insurer through a strained, implausible reading of the complaint "that is linguistically conceivable but tortured and unreasonable." 89 N.Y.2d at 634-35, 657 N.Y.S.2d 564, 679 N.E.2d 1044 (quoting State of New York v. AMRO., supra, 936 F.2d at 1428). The alleged methods of disposal in both the Wellsville and Virgin Islands actions are intentional and long-lasting and therefore manifestly not sudden and accidental under New York law. See State of New York v. AMRO Realty Corp., 936 F.2d 1420, 1427-28 (2d Cir. 1991) (long-term disposal of hazardous wastes including through drains into an open ditch was not "sudden and accidental"); Borg-Warner Corp. v. Insurance Co. of North America, 174 A.D.2d 24, 577 N.Y.S.2d 953, 956 (2d Dep't 1992) (long-term intentional disposal of industrial waste at landfills not "sudden and accidental"); Redding-Hunter Inc. v. Aetna Casualty and Surety Co., 206 A.D.2d 805, 615 N.Y.S.2d 133, 135 (3d Dep't 1994) (allegations that plaintiff systematically arranged for disposal of wastes at polluted site over long period of time precluded application of the sudden and accidental exception); Powers Chemco, Inc. v. Federal Ins. Co., 74 N.Y.2d 910, 549 N.Y.S.2d 650, 548 N.E.2d 1301 (1989) (pollution exclusion prevented coverage for property damage claims arising out of disposal of pollutants consisting of burying waste-filled drums, dumping waste into pits, and discharging waste through a pipe into pits at the site); Rheem Manufacturing Co. v. Home Indemnity Co., Index No. 6349/89 (N.Y. Sup. Ct. July 20, 1998) (continuous intentional disposal of waste over four year period not "sudden and accidental"). Nothing short of completely rewriting the facts alleged could make them subject to an interpretation suggestive of abrupt and unintentional discharge. The parties' submissions focus on the second method an insured may employ to meet its burden as articulated by Northville: furnishing extrinsic evidence to demonstrate that the discharge was sudden and accidental, notwithstanding the allegations. The moving insurers argue that the Duplan Defendants have not come forward with any evidence of a sudden and accidental discharge of pollutants at the Laga site or the Wellsville/Andover landfill and have consequently failed to demonstrate the potential application of the exception. In support of their argument, the insurers point out that in the 1995 Opinion this Court recognized that "the Duplan Defendants have not come forward with concrete evidence of a sudden and accidental event causing discharge of PCE" on the Virgin Islands site. 899 F. Supp. at 1126. The Court held that this specific lack of evidence did not defeat the duty to defend because it placed the burden on the insurers to "demonstrate that no possibility of coverage exists." Id. The insurers now postulate that the Duplan Defendants' continued inability, in the face of Northville's imposition of the burden on them to prove application of the exception, to summon any affirmative evidence of a sudden and accidental event causing the discharge of PCE mandates summary judgment in favor of the insurers. The absence of evidence is underscored, in the insurers' view, by the Duplan Defendants' responses to interrogatories requesting the production of all documents supporting their contention that sudden and accidental discharges occurred. In reply to the interrogatories, the Duplan Defendants stated that no documents exist with respect to the Virgin Islands pollution beyond those that were already before the Court in connection with the 1995 Opinion, and that they are aware of no such documentation related to the Wellsville pollution. Given the Court's earlier recognition that the Duplan Defendants had come forward with no concrete evidence of a sudden and accidental event, the insurers maintain that these interrogatory responses plainly expose the Duplan Defendants' inability to demonstrate any sudden and accidental disposal on either site. The insurers further explain that additional evidence has come to light since the 1995 Opinion establishing that PCE was disposed by means of a pipe and pit at the Lage site. The new evidence is the "Remedial Investigation Report" prepared by an environmental consultant for the Tutu Environmental Investigation Committee in 1995 which explains that nearly pure PCE has been discovered within two pipes located in the floor of the former Laga facility. See Sambursky Aff., Ex. M at 5-7. The insurers contend that this evidence, in conjunction with the evidence before the Court at the time of the 1995 Opinion, conclusively establishes the pipe and pit method of disposal, which belies any possibility of sudden and accidental discharge. An equivalent dearth of evidence showing any sudden and accidental discharge prevents coverage for the Wellsville claims, according to the insurers. As recounted above, the State of New York's complaint alleges that over an unspecified period of time Rochester Button arranged for the transport and disposal of pollutants to the Wellsville landfill. While reminding their readers that it is not their burden to prove a non-sudden and non-accidental discharge, the insurers furnish evidence demonstrating that Rochester disposed of contaminants at the landfill over a period of time in the regular course of its business. This evidence consists of deposition testimony of certain former Rochester Button employees who confirmed that they routinely disposed of waste materials in sealed drums that were shipped to the Wellsville landfill. See Hartford Memorandum dated September 22, 1998 at pp. 14-15. In resisting summary judgment, Gal, Lazare and the Successor Trust8 offer no affirmative evidence of any sudden and accidental discharge on either site. Instead, they argue that the evidence which the Court concluded in the 1995 Opinion gave rise to a reasonable possibility of sudden and accidental discharge on the Lage site also serves to defeat summary judgment here. The Court described this evidence in detail in the 1995 Opinion, see 899 F. Supp. at 1126, and it will not be repeated here. Suffice it to say that it does not concretely and affirmatively demonstrate the occurrence of a sudden and accidental event. Rather, the Duplan Defendants presented evidence that the dry-cleaning system was designed to be a closed system that did not discharge PCE, and testimony by former employees stating, directly or by inference, that no pipe or pit existed. The Duplan Defendants argued then and continue to argue on the present motions that the only reasonable inference to be drawn from this evidence is that if any PCE did escape it must have done so suddenly and accidentally. This argument does not withstand scrutiny. The allegations unequivocally bring the claims within the pollution exclusion and shift the burden to the insureds to show sudden and accidental disposal, a burden that they have not satisfied. Application of Northville The issue presented by the parties' arguments is whether an insured can meet its burden of demonstrating that the sudden and accidental exception applies by merely showing that an issue of fact exists as to whether the pollution could have occurred as alleged in the underlying claims, without submitting any evidence affirmatively demonstrating the possibility of an actual sudden and accidental discharge. I conclude that it cannot. Northville made clear that where the allegations belie any possibility of a sudden and accidental event, the insured can only receive the benefit of the sudden and accidental exception if it shows that evidence of sudden and accidental discharge exists. In Northville, the Court of Appeals affirmed the decision of the Appellate Division which disavowed the trial court's conclusion that the duty to defend came into play simply because the cause of the leaks which produced the contamination was "inconclusive" and could not be determined at the outset. The Appellate Division rejected that reasoning and reversed the trial court's determination that the insurer had a duty to defend. 636 N.Y.S.2d at 367-68. The Court of Appeals affirmed. 89 N.Y.2d at 635, 657 N.Y.S.2d 564, 679 N.E.2d 1044. Given its approval of the Appellate Division's holding and its articulation of the insured's burden, Northville is reasonably construed as standing for the proposition that a metaphysical possibility of a sudden and accidental discharge is not sufficient to invoke the exception; the insured must put forth proof of a sudden and accidental event. It may be debated whether Northville requires proof of a sudden and accidental event to a certainty on a motion for summary judgment. But to survive summary judgment, Northville suggests that there must be some modicum of proof of both abrupt and unexpected discharge of a "significant quantity" of the pollutant. Id. That proof is missing here. Few reported cases have interpreted the Northville decision. But one New York case relying upon Northville suggests that merely dispelling an alleged method of pollution and thereby creating uncertainty concerning how pollution may have occurred does not allow an insured to resuscitate coverage after the pollution exclusion is triggered. In Hadco Corp. v. Fidelity & Cas. Co., No. 23420 (N.Y. Sup. Ct. May 22, 1998), slip op. at 13-16, the court held that where an insured had presented no proof of sudden and accidental discharge of pollutants and the evidence adduced in the underlying action of spillage of wastes from storage drums was "at best, inconclusive as to whether at their outsets the discharges" were sudden, the exception did not apply as a matter of law, "Mere speculation" that the spillage may have occurred suddenly and accidentally, without more, was held insufficient to meet the insured's burden under Northville, See also Rheem Manufacturing, supra, slip op. at 11 (citing Northville, court held that allegations of intentional, long-term deposit of waste onto land precluded application of sudden and accidental exclusion; insured offered no evidence of non-sudden and non-accidental discharge). The principal deficiency in the Duplan Defendants' argument is its exclusive focus on whether or not the pipe and pit theory is viable, rather than furnishing evidence of a sudden and accidental discharge of PCE. What the Duplan Defendants lose sight of is that under Northville, it is manifestly not the insurers' burden to prove the pipe and pit theory or any other intentional and long-lasting discharge. On the contrary, the court made evident that once the underlying claims allege environmental pollution, the pollution exclusion comes into play and it is nullified only if the insureds demonstrate that the sudden and accidental exception applies, either because the allegations can be reasonably interpreted to suggest a sudden and accidental event or because extrinsic evidence shows that the discharge was in fact sudden and accidental. It is irrelevant under this analysis whether or not the pipe and pit theory is tenable. The question is whether the allegations suggest sudden and accidental discharge or, if not, whether extrinsic evidence may prove it. The underlying third-party complaints in the action at bar allege environmental pollution damage. The allegations of the settled Four Winds/Harthman complaints and the third-party claims charge the Duplan Defendants with intentional, continuous disposal of PCE onto Laga's property or into a pit on the land. There is no untortured interpretation of these allegations that admits of an instantaneous and unintentional disposal. The Duplan Defendants have come forward with not a shred of evidence of any sudden and accidental discharge. In attempting to debunk the pipe and pit theory, the Duplan Defendants have sought to create an issue of fact as to a matter that is not germane to the coverage issue as framed by Northville. Refuting the precise method of disposal alleged is not the same as showing that pollution occurred in a contrary manner. This Court previously held that evidence raising a dispute of fact as to the viability of the pipe and pit theory sufficed to invoke the duty to defend. But that was when this Court, instructed by the Second Circuit in Blank, understood it to be the insurer's burden to preclude any possibility of coverage. The evidence presented by the Duplan Defendants to refute the pipe and pit theory was thin, but the previously perceived burden on the insurer tipped the balance in favor of the insured, allowing it to withstand summary judgment. The 1995 Opinion applied the Rule 56 summary judgment standards based on the then-governing law, but the governing law has changed. Northville clarifies that the burden is on the insured to prove coverage under the exception. The relevant inquiry is therefore not whether the Duplan Defendants have presented sufficient evidence rebutting the insurers' contention that the pollution was intentional and long-lasting, but whether they have presented some credible evidence that a sudden and accidental disposal actually occurred. The evidence presented by the Duplan Defendants that the dry-cleaning system that used the PCE was designed to have been a closed system that recycled rather than discharged PCE merely serves to create a specter of doubt as to how the PCE escaped if the system was closed. But it does not raise a credible, rather than a metaphysical, possibility that an abrupt unexpected event occurred to allow release of PCE from that system, because it says nothing about an actual sudden and accidental event. Under Northville, speculation and doubt as to how the discharge, if any, might have occurred is not the equivalent of affirmative evidence of a sudden and accidental event, and is not sufficient to meet the insureds' burden of demonstrating coverage. The insureds will not be required to defend or indemnify under these circumstances. As for the Wellsville litigation, Gal and Lazare have not responded to the insurers' coverage argument because they are no longer defendants in that action. But the Successor Trust, which remains a defendant, does not contest that for years Rochester Button intentionally and systematically arranged for the disposal of waste at the landfill, apparently in sealed containers. Instead, the Successor Trust argues that two natural disasters—a flood in 1972 and a fire in 1980—may have constituted "sudden and accidental" events causing the release of any such contaminants from their containers into the environment. In so arguing, the Trust urges this Court to conclude without clear precedential support that the touchstone of "sudden and accidental" discharge is the release of the waste from its intended container into the environment, not the original deposit of the containers at the landfill. This argument is misguided. A number of New York cases have recognized that the focus of the sudden and accidental inquiry is on the original disposal of the pollutant by the insured, not the ultimate damage caused by, or dispersal of, the pollutant. As the Court of Appeals explained in Northville: "The focus in determining whether the temporally sudden discharge requirement is met, for the purpose of nullifying the pollution coverage exclusion, is on the initial release of the pollutant, not . . . on the timespan of the eventual dispersal of the discharged pollutant in the environment." 89 N.Y.2d at 633, 657 N.Y.S.2d 564, 679 N.E.2d 1044. See Rheem, supra, slip op. at 11 (rejecting insured's argument that fire and floods caused consequential dispersal of pollutants from site of intentional disposal bringing the action within the sudden and accidental exception); Borg-Warner Corp., 577 N.Y.S.2d at 957 (plaintiff's intentional disposal of waste at landfills was not sudden and accidental despite plaintiff's contention that it did not expect the alleged pollution; "it is simply irrelevant whether plaintiff knew or intended that its waste would damage the environment"); Redding-Hunter, 615 N.Y.S.2d at 135 ("the focus of the exclusion and its exception is the initial placement of wastes into the land and not the subsequent migration"); cf. Technicon, 74 N.Y.2d at 75, 544 N.Y.S.2d 531, 542 N.E.2d 1048 (the pollution exclusion [30 ELR 20006] clause "excludes from coverage liability based on all intentional discharges of waste whether consequential damages were intended or unintended"); cf. Ogden Corp. v. Travelers Indemnity Co., 924 F.2d 39, 42 [21 ELR 20862] (2d Cir. 1991) (pollution cannot be accidental when activity resulting in it was intentional); but see Avondale Ins, Ind., Inc. v. The Travelers Indem. Co., 894 F.2d 498, 500 (2d Cir. 1990) (per curiam) (allegations that insureds transported and disposed of wastes did not preclude coverage under pollution exclusion as they did not negate possibility that insureds may have intentionally buried properly sealed drums containing wastes followed by a sudden and accidental event causing subsequent discharge from drums). Analysis of these cases leads me to conclude that the argument that a flood and fire occurred at the landfill is unavailing because it shifts the focus to the subsequent dispersal of the contaminants rather than the actions of the insured in depositing them. For the reasons discussed, I hold that the Duplan Defendants have not adequately demonstrated the application of the sudden and accidental exception and that the moving insurers are not required to defend or indemnify the Duplan Defendants for any liability arising from the Virgin Islands or Wellsville claims.9 As a second line of attack against the pollution exclusion's bar, Gal, Lazare and the Successor Trust urge the Court to apply the theory of "regulatory estoppel" adopted by the New Jersey Supreme Court in the seminal case of Morton Int'l, Inc. v. General Acc. Ins. Co. of America, 134 N.J. 1, 629 A.2d 831 (S. Ct. N.J. 1993). Pursuant to this theory, explained below, they maintain that the moving insurers are estopped from narrowly construing the sudden and accidental exception so as to deny coverage here because the insurance industry represented decades ago that coverage would continue under the exclusion for intentional discharge resulting in unintended pollution, as the Duplan Defendants argue is at issue here. In general terms, occurrence-based policies such as the subject CGL policies cover accidents, including exposure to conditions, that result in injury or property damage during the policy period. According to the Duplan Defendants, prior to the advent of the pollution exclusion which was mandated in New York state from 1971 to 1982, see 899 F. Supp. at 1119, the focus of occurrence-based insurance coverage was the intentional or accidental nature of the injury, not its cause. Based on this interpretation, the Duplan Defendants posit that occurrence-based policies prior to the pollution exclusion covered property damage resulting from intentional and gradual discharge if the property damage itself was not expected or intended. See, e.g., New Castle County v. Hartford Acc. and Indem. Co., 933 F.2d 1162, 1197 [21 ELR 21153] (3d Cir. 1991) ("The standard, occurrence-based policy thus covered property damage resulting from gradual pollution. So long as the ultimate loss was neither expected nor intended, courts generally extended coverage to all pollution-related damage, even if it arose from the intentional discharge of pollutants."). The Duplan Defendants contrast this broader coverage with the occurrence-based policies containing the pollution exclusion which have been construed literally to preclude coverage for unexpected damage resulting from intentional or gradual discharge of pollutants. The Duplan Defendants contend that when New York state regulators originally approved the pollution exclusion clause in 1971, they did so based on insurance industry representations that the exclusion would not change the existing scope of coverage for pollution but merely served to clarify that intentional pollution damage was not covered. To support this assertion, the Duplan Defendants submit a May 20, 1970 circular from the New York Insurance Rating Board addressed to "New York Service Purchasers" explaining the proposed pollution exclusion clause as follows: Coverage for pollution or contamination is not provided in most cases under present policies because the damages can be said to be expected or intended and are thus excluded by the definition of occurrence. The [pollution] exclusion clarifies this situation so as to avoid any question of intent. Coverage is continued for pollution or contamination caused injuries when the pollution or contamination results from an accident . . . . Lopeman Aff., Ex. G. The Duplan Defendants interpret this statement as an insurance industry representation confirming that intentional or gradual discharge with unintended pollution consequences, such as that alleged here, would continue to be covered. They postulate that having taken this position, the insurers cannot now contend that the exclusion bars coverage for unexpected damage resulting from intentional and gradual disposal of contaminants, even though this is precisely how the New York Court of Appeals has interpreted it. For this argument the Duplan Defendants place heavy reliance on the decision of the New Jersey Supreme Court in Morton. In that case, construing a substantially identical circular from the New Jersey Insurance Rating Board, the court held that applying the literal meaning of the terms "sudden" and "accidental" would work a significant reduction in the previously available coverage for pollution damage. Id. at 872. The court concluded that because the insurers had induced approval of the pollution exclusion by misrepresenting that the clause merely clarified, but did not diminish, the scope of the then-existing coverage, it would refuse to construe CGL policies containing the pollution-exclusion clause in a manner consistent with the clause's literal language, ignoring the industry's misleading presentation to state regulators over twenty years ago, and overlooking the apparent unfairness that such an interpretation would impose on policyholders who were charged rates that did not reflect the radical diminution in coverage contemplated by the insurance industry. Concluding that application of the doctrine of estoppel in the regulatory context was appropriate, the court held that: Notwithstanding the literal terms of the standard pollution-exclusion clause, that clause will be construed to provide coverage identical with that provided under the prior occurrence-based policy, except that the clause will be interpreted to preclude coverage in cases in which the insured intentionally discharges a known pollutant, irrespective of whether the resulting property damage was intended or expected. In only one other state have courts determined that the pollution exclusion clause should not be interpreted in accordance with the literal meaning of its terms because of prior contrary representations of the insurance industry. In Joy Technologies, Inc. v. Liberty Mutual Ins. Co., 187 W. Va. 742, 421 S.E.2d 493 (S. Ct. W. Va. 1992), the West Virginia Supreme Court held that, in light of representations by the insurance industry to state regulators that the pollution exclusion clause did not alter prior occurrence-based coverage which had covered unintended pollution, the pollution exclusion clause "covered pollution damage, even if it resulted over a period of time and was gradual, so long as it was not expected or intended." Id. at 500. The insurers counter that this argument should be rejected for several reasons, the most compelling of which is that it relies on extrinsic evidence which courts may not consider to interpret the terms of a contract provision that is clear and unambiguous, see, e.g., Namad v. Salomon, Inc., 74 N.Y.2d 751, 753, 545 N.Y.S.2d 79, 543 N.E.2d 722 (1989), such as the pollution exclusion at bar. See Northville, 89 N.Y.2d at 631, 657 N.Y.S.2d 564, 679 N.E.2d 1044. Assuming arguendo that this Court were inclined to consider the argument, the insurers also dispute the factual premise which lies at the heart of it: that the insurance industry misrepresented the meaning of the provision. The insurers have furnished evidence that shows that, contrary to the Duplan Defendants' interpretation of the insurance circular, New York insurance regulators fully understood from the insurance industry's filings that the pollution exclusion clause did not cover gradual discharge of pollution, whether or not the resulting property damage [30 ELR 20007] was expected. See National Union's undated Reply Memorandum at pp. 16-19. Having considered the parties' arguments, I decline to adopt regulatory estoppel as a basis for nullifying operation of the literal terms of the pollution exclusion. Preliminarily, I recognize that the theory, as espoused by the Morton court, has received almost universal disapproval. It has been consistently rejected by federal and state authorities across the country and has never been adopted by any New York court. Indeed, at least two New York courts have flatly rejected the theory. See Gold Fields American Corp. v. Aetna Casualty & Sur. Co., Index No. 19879/89 (N.Y. Sup. Ct. Mar. 28, 1996), slip op. at 20 n.14 (refusing to consider extrinsic evidence of the drafting history of the unambiguous pollution exclusion; "the case that is at the font of the notion of regulatory estoppel, [Morton], has been subjected to a barrage of unfavorable judicial attention"); Papock v. American Home Assurance Co., Index No. 924/95, slip op. at 8 n.7 (N.Y. Sup. Ct. Aug. 16, 1996) (rejecting regulatory estoppel argument because extrinsic evidence related to the drafting history of the clause held not admissible to interpret its clear and unambiguous terms); see generally Northville Industries Corp. v. National Union Fire Ins. Co., 218 A.D.2d 19, 636 N.Y.S.2d 359, 368 (2d Dep't 1995) (declining to consider Morton regulatory estoppel argument as not properly before the court on appeal), aff'd on other grounds 89 N.Y.2d 621, 657 N.Y.S.2d 564, 679 N.E.2d 1044 (1997). I am aware of only one New York court that has suggested that the doctrine might be viable. But in that case, construing a different policy provision, the court held that there were no unequivocal representations about the meaning of the provision to warrant application of the theory. See Tozzi v. Long Island R.R. Co., 170 Misc. 2d 606, 651 N.Y.S.2d 270, 275 (N.Y. Sup. Ct. 1996). As the insurers correctly note, the overwhelming majority of state and federal courts outside of New York to have considered the issue have unequivocally rejected Morton and the regulatory estoppel argument, primarily on the basis that extrinsic evidence is not permitted to vary the terms of a clear and unambiguous pollution exclusion provision. See Transamerica Ins. Co. v. Duro Bag Manuf. Co., 50 F.3d 370, 373 [25 ELR 20695] (6th Cir. 1995) (declining to examine drafting history of unambiguous pollution exclusion clause in connection with estoppel argument); Cincinnati Ins. Co. v. Flanders Elec. Motor Service, Inc., 40 F.3d 146, 153 (7th Cir. 1994) ("Although several courts have considered the public record from the development and regulatory approval of the pollution exclusion, see, e.g., [Morton], we will not look beyond the unambiguous policy language."); Federated Mutual Ins. Co. v. Botkin Grain Co., 64 F.3d 537, 541 (10th Cir. 1995) (rejecting estoppel argument because extrinsic evidence is not permitted to determine meaning of unambiguous pollution exclusion language); Anderson v. Minnesota Ins. Guar. Assoc., 534 N.W.2d 706, 709 (S. Ct. Minn. 1995) (rejecting estoppel argument because any reliance on explanations contrary to the unambiguous meaning of the pollution exclusion clause is unreasonable as a matter of law); Snydergeneral Corp. v. Great American Ins. Co., 928 F. Supp. 674, 682-83 (N.D. Tex. 1996) (recognizing that the "regulatory estoppel argument has been rejected by virtually every other state and federal court to address the issue . . . the doctrine has not been accepted in any jurisdiction that has held the pollution exclusion unambiguous"), aff'd 133 F.3d 373 (5th Cir. 1998); EDO Corp. v. Newark Ins. Co., 878 F. Supp. 366, 374 (D. Conn. 1995) (refusing to consider drafting history of the pollution exclusion because sudden and accidental exception is unambiguous); Wysong and Miles Co. v. Employers of Wausau, 4 F. Supp. 2d 421, 427 (M.D.N.C. 1998) (recognizing that most courts have rejected regulatory estoppel argument; citing cases); Sinclair Oil Corp. v. Republic Insur. Co., 967 F. Supp. 462, 469 (D. Wyo. 1997) (same); Charter Oil Co. v. American Employers' Ins. Co., 69 F.3d 1160, 1168 (D.C. Cir. 1995) (rejecting estoppel theory on ground that plaintiff failed to submit evidence demonstrating any material inconsistency between the representations made and the interpretation of the clause urged by the insurers). New York authorities have held that the pollution exclusion clause is clear and unambiguous. See Northville, 89 N.Y.2d at 631, 657 N.Y.S.2d 564, 679 N.E.2d 1044. Accordingly, just as courts in other jurisdictions have held, I lack the authority to admit extrinsic evidence to vary the terms of the exclusion as applying regulatory estoppel would require. The Duplan Defendants have provided no convincing foundation or persuasive authority that compels this Court to reject the clear consensus of authority and embrace the universally denounced regulatory estoppel rationale. Even if I were to consider the insurance circular proffered by the Duplan Defendants, it is not clear that it must be interpreted in the way they urge. The circular explains that coverage under the pollution will continue for injuries caused by pollution or contamination when the "pollution or contamination results from an accident." That language suggests that pollution damage resulting from an unintentional occurrence will continue to be covered. But it says nothing about whether unexpected pollution damage resulting from intentional or gradual discharge will be covered. It therefore does not constitute unequivocal evidence of misleading representations in conflict with an interpretation of the exclusion as precluding unintentional damage from intentional and longlasting disposal. Morton itself recognized this in construing identical language from the New Jersey Insurance Rating Board: At most, the IRB's statement that the exclusion "clarifies this situation so as to avoid any question of intent" could have been understood to characterize the exclusion as denying coverage for the knowing discharge of pollutants, irrespective of whether damage had been expected or intended. The cited passage illustrates that even if the Court were persuaded by the Duplan Defendants' argument to follow Morton, coverage would be denied here. The Duplan Defendants argue that the insurers should be estopped from arguing that the exclusion bars coverage for intentional and gradual discharges which result in unintended pollution, as the pre-existing coverage assertedly provided. But that was not the ultimate result in Morton. Even though the Court adopted the estoppel theory and refused to construe the pollution exclusion in accordance with its literal meaning. Morton held that coverage was nonetheless unavailable for the intentional discharge of a known pollutant, regardless of the lack of intent to cause property damage. 629 A.2d at 875; see Snydergeneral, 928 F. Supp. at 682 n.7 (recognizing that Morton held that the intentional discharge of known pollutants over an extended period was not an "occurrence" under the prior occurrence-based policy). As discussed supra, the claims in the Wellsville and Virgin Island actions aver that the Duplan Defendants caused pollution damage through the intentional disposal of known pollutants over a long period of time. Accordingly, adhering to the rationale espoused by Morton would lead to precisely the opposite result sought by the Duplan Defendants: exclusion of the claims. C. Coverage of Gal, Lazare and the Successor Trust Under the Newark Policy 1. Gal and Lazare as "Insureds" CNA and Newark (joined by National Union and American Home10) also pray for a determination that Gal and Lazare do not qualify as insureds under the policies they issued to Duplan, Panex and Laga which also cover their directors, officers and shareholders while acting within the scope of their duties. Because I have held that the claims against CNA and National Union must be dismissed as barred by the pollution coverage exclusions, I decline to consider the separate arguments advanced by those insurers in support of dismissal. Newark's arguments for dismissal will be considered, however, because Newark remains in the action, given the absence of any pollution exclusion in its policy. Gal and Lazare seek coverage for the amended third-party claims asserted against them under a policy Newark issued Laga.11 Because Gal and Lazare are not named as insureds, their claims for coverage [30 ELR 20008] necessarily arise from the policy's definition of the term "insured" to include the named insured Laga, as well as an "executive officer, director or stockholder thereof while acting within the scope of his duties as such." Von Mehren Aff., at Ex. 1. Newark seeks a declaration that the remaining underlying claims are not covered by the Laga policy because they are not asserted against Gal and Lazare in any covered capacity; to wit, as officers, directors or shareholders of Laga while acting within the scope of their duties as such.12 Central to Newark's argument are certain decisions of Judge Brotman in the Virgin Islands action and of the Third Circuit ruling on an appeal in that action. A summary of these opinions is therefore crucial to an understanding of the argument and its resolution. In 1993, Judge Brotman dismissed all of the common law claims asserted against Panex and Duplan, holding that under Delaware law (the state of incorporation of those entities) no suit could be maintained against Panex and Duplan because they had been dissolved. Judge Brotman also dismissed the claims against Gal and Lazare in their capacities as former directors, officers or shareholders of Panex and Duplan. In doing so, Judge Brotman noted that a prerequisite to suit against a corporation's officers, directors or shareholders under Delaware law is an unsatisfied judgment against the corporation. Because there is no possibility of securing a judgment over a the dissolved corporations which are incapable of being sued, Judge Brotman held that the prerequisite could not be met for any suit against Gal and Lazare in their corporate capacities and therefore dismissed the claims against them. See In re Tutu Wells Contamination Litigation, 846 F. Supp. 1243, 1279 (D. Vi. 1993). In that same opinion, Judge Brotman refused to dismiss the claims asserted against Laga, and against Gal and Lazare in their capacities as former officers or directors of Laga, because it was not clear that Laga had in fact been dissolved. Judge Brotman also declined to dismiss the CERCLA claims asserted against any of the corporations or their officers, concluding that CERCLA preempted the Delaware statute that precludes suits against dissolved corporations. On appeal of an order not relevant here, the Third Circuit affirmed Judge Brotman's dismissal of the common law claims against Duplan and Panex, and against Gal and Lazare as officers or directors thereof, but held that Laga should have also been dismissed under the Virgin Islands counterpart to the Delaware dissolution law because evidence conclusively established in that it had in fact been dissolved in 1981. The Third Circuit also reversed Judge Brotman's ruling that CERCLA preempted the state dissolution statutes, holding that the CERCLA claims against the dissolved corporations and their officers, directors or shareholders sued in such capacities should have been dismissed. In re: Tutu Wells Contamination Litigation, No. 95-7280, slip op. at 9-11, 15 (3d Cir. Dec. 21, 1995) (unpublished opinion). Following the Third Circuit's decision, Judge Brotman dismissed the common law claims against Laga, the CERCLA claims against Duplan, Panex and Laga and the remaining claims against Gal and Lazare. In the wake of these dismissals, the third-party plaintiffs amended their complaints to assert common law and CERCLA claims against Gal and Lazare, purportedly, although not explicitly, in their personal capacities. Gal and Lazare moved to dismiss these amended claims, contending that they arose from their status as former directors, officers and/or shareholders of the dissolved entities and therefore ran contrary to the Third Circuit's decision requiring dismissal of the claims against them in their corporate capacities. In an opinion dated February 18, 1998, Judge Brotman rejected this motion. Judge Brotman recognized that Gal and Lazare may be held personally liable as "operators" or "arrangers" under CERCLA for their own conduct if they are proved to have asserted legally sufficient control over the activities of Laga and that this direct, personal liability is distinct from derivative liability for corporate violations which was not alleged in the third-party complaints. See In re Tutu Wells Contamination Litigation, 994 F. Supp. 638, 664-66 (D. Vi. 1998), citing, inter alia, Witco Corp. v. Beekhuis, 38 F.3d 682, 692 (3d Cir. 1994), in which the court held that allegations that former director and officer of polluting company personally designed the manufacturing and disposal processes and directed construction of drainage ditch into which chemicals were disposed sustained personal "operator" liability under CERCLA. In light of the Third Circuit's silence about whether Gal and Lazare could be sued as individuals, and because personal liability not contingent on one's corporate status is possible under CERCLA. Judge Brotman held that the amended claims against them were not precluded. In so holding, Judge Brotman expressed the view that the amended claims against Gal and Lazare are not based on their status as former officers, directors or shareholders of the dissolved corporations, but exist "separate and apart from their capacities as officers and directors." 994 F. Supp. at 665. Thus, the court sustained the claims under which "third-party plaintiffs seek to hold Gal and Lazare personally liable under" CERCLA. Id. at 666 n.36. Armed with these opinions, Newark argues that the claims of Gal and Lazare for insurance coverage under the policy must be dismissed because the opinions make clear that they cannot be, and are not, sued in the "insured" capacity. Gal and Lazare vigorously oppose this motion, marshaling a litany of arguments in response. Their principal argument is that the claims remaining against them in the Virgin Islands action, although purportedly asserted against them in their personal capacity, are inextricably intertwined with and based upon their status as former shareholders, directors or officers of Laga, Panex and/or Duplan. In their view, the distinction between individual and corporate capacity is artificial and meaningless. Although the substance of the dismissed claims has not materially changed, the third-party plaintiffs have characterized their amended claims as claims for "personal" liability. Gal and Lazare argue that such a characterization is a fallacy: the substance of the claims implicates acts taken in connection with their corporate ties to Laga, Panex and/or Duplan and should therefore be covered. Newark's motion must fail. I reject its attempt to make the decisions of Judge Brotman and the Third Circuit determinative of the "insured" issue here. Newark's reliance on those decisions boils down to an argument that the inability to bring suit against Gal and Lazare in their corporate capacities under Virgin Islands law precludes any possibility of coverage for the pending claims arising from their corporate status. But this argument ignores the fundamental precept of insurance law which holds that the touchstone of the duty to defend is the insurance contract itself, not an unrelated corporate statute.13 See Fitzpatrick v. Ameican Honda Motor Co., Inc., 78 N.Y.2d 61, 68, 571 N.Y.S.2d 672, 575 N.E.2d 90 (1991) ("the duty to defend derives, in the first instance . . . from the insurer's own contract with the insured . . . the contract itself must always remain a primary point of reference.") (citations omitted). As noted, the insurer's duty to defend comes into play "whenever the allegations in a complaint state a cause of action that gives rise to the reasonable possibility of recovery under the policy." Fitzpatrick, 78 N.Y.2d at 65, 571 N.Y.S.2d 672, 575 N.E.2d 90. Mindful of these precepts, the Court will take instruction from the policy itself. The insured clause of the policy purports to cover officers and directors of Laga "while acting within the scope of their duties as such." Unlike the Virgin Islands statute discussed by the Third Circuit, the Newark policy does not require as a prerequisite to coverage of officers and directors a successful suit against Laga. Nor does it provide that officer and director coverage may be invoked only for an unrecovered corporate debt. Instead, the language of the policy plainly covers officers and directors for liability arising from acts taken while serving in their corporate role. The issue at bar is therefore whether the allegations of the third-party complaints implicate actions that Gal and Lazare may have taken within the scope of their duties as officers or directors of Laga, thereby triggering their covered status and the insurer's duty to defend. This issue was not addressed in, and is not dictated by, the opinions in the underlying. Virgin Islands action. The determination of whether suit may be maintained against Gal and Lazare under the Virgin Islands statute requires an inquiry distinct from that involved in determining whether the allegations against Gal and Lazare can be reasonably construed as involving actions taken within the scope of their corporate duties. If Gal and Lazare are exposed to personal liability for acts taken while serving as officers or directors of Laga, logic and the policy language dictate that they should be potentially subject to coverage, notwithstanding that Laga's dissolution bars any suit against them for recovery of a "corporate debt" under Virgin Islands law. Newark argues that because the acts Gal and Lazare are alleged to have taken give rise to "personal" operator or arranger CERCLA liability they are demonstrably not sued in any "corporate capacity" but rather purely as uncovered individuals. I disagree. The Court is guided in this regard by a case cited by Gal and Lazare for their argument that personal liability of an officer under CERCLA does not preclude a separate finding that such liability arose from his corporate position. In Witco, supra, 38 F.3d 682, the Third Circuit held that a former officer and director of the plaintiff corporation was required to contribute to the corporation's costs of environmental clean-up of a site it previously owned because allegations concerning actions taken by the individual gave rise to personal CERCLA "operator" liability. The court proceeded to hold that the claim for "operator" liability against the individual nonetheless "arose by virtue of his former status as an officer and director of [the corporation]." 38 F.3d at 692-93. As a result, the Third Circuit held that even though the former officer was personally liable as an operator under CERCLA, he was entitled to indemnification from the corporation for this liability under a Delaware statute that mandates indemnification for claims as to which an individual is a party by reason of the fact that he was an officer or director of the corporation. Id. Witco teaches that an individual with personal liability under CERCLA stemming from acts taken as an officer or director of a corporation may nonetheless be regarded as having been sued by reason of his corporate position. In Witco, the court made clear that a claim alleging that a former director was personally, not derivatively, liable under CERCLA was closely enough tied to his corporate status to require indemnification under the Delaware statute at issue. There is no principled basis for conflating the personal CERCLA liability inquiry and the "insured" inquiry. The two inquiries should be just as separate as the CERCLA liability inquiry was from statutory indemnification in Witco. Just as Witco undertook the indemnification analysis free from any formalistic characterization of liability as personal, the duty to defend should not be governed in the instant case by the conclusions of the Third Circuit and Judge Brotman that Gal and Lazare may not be, and are not, sued in their individual "capacities." The only significant inquiry for purposes of the duty to defend is whether there is a reasonable possibility that Gal and Lazare are liable for acts taken within the scope of their corporate duties. To determine whether Newark is obligated to defend them for the Virgin Islands claims, one must consider whether the allegations in the third-party complaints state claims that are potentially subject to coverage. I conclude that they do. Five third-party complaints have been filed. Four of them were initially filed several years ago by ESSO, L'Henri, Inc., the Virgin Islands Department of Education, and Texaco. See Von Mehren Aff. at Ex. 4(C)-(F). The allegations contained in the complaints of ESSO and L'Henri are substantially identical, id. at Ex. 4(C), (D), while the complaints of the Department of Education (Ex. 4(E)) and Texaco (Ex. 4(F)) mirror each other. The fifth complaint was filed only recently by the Virgin Islands Department of Planning and Natural Resources ("DPNR"). See Booth Aff. at Ex. G. Its allegations do not parallel any of the others. All five complaints state causes of action under CERCLA and the Resource Conservation and Recovery Act of 1976 ("RCRA"), 42 U.S.C. § 6901 et seq., and under additional common law theories. Each complaint alleges that Gal and Lazare were officers, directors and/or shareholders of Laga, Duplan and/or Panex. See Von Mehren Aff. at Ex. 4(C) PP12, 13; (D) PP12, 13; (E) PP20, 21; (F) PP18, 19; Booth Aff. at PP34, 35, 85. Newark does not dispute that Gal and Lazare were officers of Laga during the periods of coverage. The L'Henri and ESSO complaints contain detailed allegations of actions taken by Gal and Lazare in connection with the alleged use and disposal of PCE at the Laga facility. The following allegations taken from the L'Henri complaint are representative: During the time in which [PCE] was release [sic] from the Laga facility, Gal and Lazare had the authority to exercise, and did exercise, substantial control over the operations of the Laga facility, including day-to-day activities, and they exercised pervasive, actual high-level control over management and decision making with respect to the operations of the Laga facility. Gal and Lazare chose the location for the Laga facility; assisted in, financed and directed the design and construction of the facility; determined what product(s) the Laga facility would manufacture; . . . . During the time in which [PCE] was released from the Laga facility, Gal and Lazare acted to ensure that the facility retained an adequate labor force, or had the authority to do so; participated in the management and supervision of the labor force, or had the authority to do so; hired, directed, supervised and set responsibilities for the facility's employees with day-to-day operational responsibilities . . . . Von Mehren Aff., Ex. 4(D) at PP23-25. The DPNR complaint offers similar details of the actions and responsibilities of Gal and Lazare in connection with the disposal of PCE: Throughout the history of operations at the Laga Facility, Gal and Lazare, as individuals and as shareholders, partners, directors or officers of Laga, Duplan, Panex and Panex Co., managed, directed and conducted operations specifically related to the disposal and release of PCE from the Laga Facility . . . . Gal and Lazare, in their capacities noted above, made all decisions regarding compliancewith regulations concerning environmental protection. . . . Specifically, Gal and Lazare were involved in decisions regarding the construction of the Laga Facility, including informing the facility's architects of how many and what types of machines the facility must accommodate . . . . Booth Aff., Ex. G at PP94-95 (emphasis added). The Department of Education and Texaco complaints lack detailed descriptions of the roles played by Gal and Lazare, but allege generally that: Gal and Lazare had, and did exercise authority and substantial control over the operations of the Laga Facility, including its day-to-day activities, and they exercised pervasive, actual high-level control, management and decision making with respect to the operations of the Laga Facility. Von Mehren Aff., Ex. 4(E) at P53. The inescapable conclusion from these allegations is that Gal and Lazare took actions, giving rise to liability, at least potentially within the scope of their duties as officers or directors of Laga. The actions alleged here are arguably those that a corporate officer might take on behalf of his corporation. To be sure, the policy does not delineate the sorts of actions that fit within the scope of the referenced duties, and research has yielded no New York case law construing the policy language which has any useful application here. Case law in other jurisdictions is equally sparse. However, in determining whether a duty to defend exists, I am constrained to resolve any doubt about whether the allegations state a claim within the terms of the policy against the insurer. [30 ELR 20010] See, e.g., United States Fidelity & Guaranty Co. v. Executive Ins. Co., 893 F.2d 517, 519 (2d Cir. 1990). In the absence of clear guidance to the contrary, and resolving all doubts against Newark, it is not difficult to conclude that these allegations of high-level managerial actions could fit under any common and reasonable definition of an officer's or director's duties. I do not presume at this stage to make a finding one way or another about whether the actions, if taken, were within the scope of Gal's and Lazare's corporate duties. But faithful to my duty to resolve doubts against Newark, I conclude that the allegations sufficiently state a claim for which Gal and Lazare could potentially be covered under the Newark policy, thereby triggering Newark's duty to defend. Zavota v. Ocean Acc. & Guar. Corp., 408 F.2d 940, 942-43 (1st Cir. 1969), cited by Newark, does not require a contrary conclusion. In construing an insured definition substantially similar to the one at bar, the First Circuit held that an officer is covered if the officer's conduct giving rise to individual liability would also impose liability on the corporation. The court broadly announced that: "If his act imposed liability on the corporation, the officer has the insurer's protection; otherwise not." Id. Relying on this rationale, Newark argues that because the acts of Gal and Lazare in operating Laga or arranging for the disposal of PCE may impose personal liability upon them but would not make the corporation derivatively liable under CERCLA, the suits are a fortiori not based on their corporate status and therefore cannot be said to fall within the scope of the policy coverage. This argument is unavailing. As a preliminary matter, whatever principle Zavota espouses is of no precedential value in the instant case. It is a decision of the First Circuit and does not interpret the laws of New York or even the Virgin Islands. Moreover, I do not read Zavota as necessarily precluding coverage in this case. At its core, Zavota addresses whether coverage of an officer is determined by the nature of the work which gave subjected the officer to liability. In Zavota, a corporate officer was sued in tort for injuries that occurred when the officer was operating a crane, which is not a traditionally executive duty. Consistent with the rule that policies must be construed against the insurer, the court rejected the insurer's argument that the officer's apparently non-corporate function was determinative of coverage. Instead, the court held that the purpose of the insured clause "is to protect the officer against suits wherever his conduct is such, in relation to the corporation, that the corporation would be liable." 408 F.2d at 942. Thus, because the acts of the officer would have also caused the corporation to be liable, the officer was covered, notwithstanding that he was not performing a purely executive function. I do not construe Zavota as precluding coverage for acts of an officer that impose personal liability unless the same acts impose derivative liability on the corporation, as Newark seems to argue. Zavota clearly espouses a protective inclination in favor of the insured. It would be to ignore this protective aim to narrowly construe Zavota as requiring derivative liability before permitting coverage. This is particularly true here since, unlike operating a crane, the functions alleged to have been performed were arguably classically executive although the precise theory of personal liability might not extend to the corporation. Under CERCLA, as Newark correctly points out, officers of a corporation may be held individually liable for operator or arranger liability, which is not a form of derivative liability. CERCLA attempts to reach as many potentially responsible parties as possible to ensure adequate pollution clean-up and deterrence. In the case of a corporate polluter, CERCLA does not limit the liability to the corporation but extends it to the corporation's officers and directors to the extent they had a certain level of control or responsibility for disposal of pollutants, and if three predicates are met: disposal of pollutants at a facility, release of those substances at the facility, and expenditure of clean-up costs. See In re Tutu Wells, 994 F. Supp. at 666. It seems fully consistent with the logic and spirit of Zavota that coverage may be found where the acts of the officer might have also given rise to corporate liability albeit under a distinct legal or statutory basis. For example, some of the actions which allegedly cause Gal and Lazare to be personally liable under CERCLA could also satisfy one of the predicates of CERCLA owner liability for Laga, assuming it were not dissolved. Thus, if Gal and Lazare arranged for the disposal of PCE on behalf of Laga they may be liable individually, and their acts of disposal could cause Laga to be liable as an owner of the facility where pollution occurred. Under the circumstances presented here, the particular concern expressed by the Zavota court, that to allow coverage when the act of the officer does not impose liability on the corporation would turn the corporate policy into an individual liability policy, does not fairly arise. I conclude that the allegations in the underlying third-party complaints give rise to a reasonable possibility that Gal and Lazare may be found liable for actions taken within the scope of their corporate duties, bringing the claims potentially within the purchased protection. Newark accordingly has a duty to defend. I do not reach the question whether a duty to indemnify exists at this stage, given the many unresolved questions involving the activities of Gal and Lazare and the precise delineation of their duties. 2. "Occurrence" During Policy Period Having concluded that the claims of Gal and Lazare may stand, I must turn to Newark's alternative basis for dismissal: that there is no possibility of that covered property damage occurred during the effective period of the policy. The policy Newark issued Laga covered liability for bodily injury or property damage "caused by an occurrence." Von Mehren Aff., Ex. 1. "Occurrence," in turn, is defined as: an accident, including injurious exposure to conditions, which results, during the policy period, in bodily injury or property damage neither expected nor intended from the standpoint of the insured. See Newark Reply Brief (undated), at 17.14 Newark contends that there is no possibility of any covered "occurrence" during the policy period because the evidence demonstrates that PCE could not have been released from the Laga site until at least 1971, and the PCE could not have migrated to, and contaminated, the Aquifer until 1974 at the earliest. Because this argument necessarily depends upon the effective dates of the policy, a disputed issue, I must determine as a threshold matter the policy's temporal boundaries. As noted, Newark does not seriously dispute that it issued a CGL policy15 to Laga for the initial period of July 3, 1969 to July 3, 1970, which was renewed for one year, from July 3, 1970 to July 3, 1971. At this point, however, the parties' contentions diverge. Newark maintains that no reliable evidence has been produced to demonstrate that coverage extended beyond that date. The Duplan Defendants counter that coverage was renewed to at least July 3, 1973, submitting in support a one-page "Confirmation" dated January 16, 1973 issued by Frenkel & Co., Inc., a New York insurance broker and addressed to "The Duplan Corporation." This document, which makes reference to a North River Insurance Company umbrella liability policy, states in pertinent part: Warrant the following policies for coverage in the Virgin Islands—Comprehensive General Liability Firemens Ins of Newark Term 7/3/72 to 7/3/73 . . . . The document also indicates that the bodily injury coverage limit for the referenced Newark policy is "100/300,000" and the property damage limit is "100,000." See Lopeman Affidavit dated October 30, 1996, at Ex. G. I conclude that this evidence, while not abundant, suffices to create an issue of fact as to whether the Newark coverage extended to at least July 3, 1973. Under New York law, a would-be insured who wishes to invoke coverage under a lost or missing insurance policy must establish the existence and contents of that policy. See Gold Fields American Corp. v. Aetna Casualty and Sur. Co., 173 Misc. 2d 901, 661 N.Y.S.2d 948, 950 (N.Y. Sup. Ct. 1997) ("the problem of lost policies is of course one for the plaintiff, which all parties agree has the burden of proof on the issue of the existence of the policies and their terms"); see also [30 ELR 20011] Abex Corp. v. Maryland Casualty Co., 790 F.2d 119, 129-3-(D.C. Cir. 1986) ("Under New York law Abex has the burden of establishing the existence of [the asserted] policy."); Boyce Thompson Inst. For Plant Research v. INA, 751 F. Supp. 1137, 1140-41 (S.D.N.Y. 1990) ("party seeking to recover upon a lost instrument must prove its former existence, execution, delivery and contents"). The only reported New York case to have considered the standard of proof on this issue has held that the proponent of a lost policy must prove its existence and terms by a preponderance of the evidence. Gold Fields, 661 N.Y.S.2d at 951. In its careful analysis, the Gold Fields court rejected the use of the clear and convincing evidence standard in Boyce Thompson, 751 F. Supp. at 1140, upon which Newark relies, as an incorrect interpretation of New York law. Contrary to Newark's assertion, therefore, under New York law the Duplan Defendants need only present proof showing that it is more likely than not that the policy existed. To meet this burden, the Duplan Defendants need not offer the policy itself but may properly submit secondary evidence such as the broker document described above. See Gold Fields, 661 N.Y.S.2d at 949; Colonial Tanning Corp. v. Home Indemnity Co., 780 F. Supp. 906, 922 (N.D.N.Y. 1991). The question before the Court is whether the broker confirmation is sufficient to establish a dispute of fact precluding summary judgment on the issue of whether the policy was renewed. I think that it is, viewed in conjunction with the uncontested evidence that Newark issued a CGL policy to Laga from July 3, 1969 to July 3, 1971. Newark argues that the confirmation alone cannot demonstrate coverage because it is uncorroborated and because it fails to identify Laga as the named insured. I disagree. The information provided in the confirmation is consistent with uncontested provisions of the Newark policy. For example, the confirmation references a Newark policy that provided "coverage in the Virgin Islands," for the period of July 3, 1972 to July 3, 1973. The identified location strongly suggests a policy issued to Laga, which only did business in the Virgin Islands. The beginning and end dates of the referenced policy, July 3 to July 3, also echo the temporal demarcation of the initial Newark policy. In addition, the monetary limits of liability also mirror those contained in the Laga policy in effect from July 3, 1970 to July 3, 1971. On the basis of this document, I believe that a reasonable trier of fact could conclude that the policy was renewed to July 3, 1973.16 Newark argues that a single broker document is insufficient to satisfy the Duplan Defendants' burden of proof. For this argument, Newark relies on two cases in which an arguably greater magnitude of evidence than that presented here was held inadequate to establish the existence of a lost policy or its terms. See Boyce Thompson, 751 F. Supp. at 1140; Keene Corp. v. Ins. Co. of North America, No. 78-1011, 1981 WL 1753, *2 (D.D.C. Jan. 20, 1981) (applying Pennsylvania law). These cases do not require a contrary result. As an initial matter, neither case announces any general rule concerning the amount or type of evidence that is necessary to establish the existence of coverage. Logic dictates that the evidence adduced in every case is unique and its substance and weight must be evaluated independently. Moreover, because both Keene and Boyce Thompson required clear and convincing proof, it is impossible to draw any conclusions about whether the evidence proffered in those cases might have satisfied the insured's burden under the lower preponderance standard applicable here. For the reasons discussed, I conclude that the Duplan Defendants have demonstrated a triable issue of fact as to whether the Newark policy was renewed to July 3, 1973. Newark contends that the coverage claims against it must be dismissed because the Duplan Defendants cannot possibly show that a defined occurrence took place before the expiration of the policy in 1971, or 1973 assuming arguendo that the policy was extended. Newark's position is that because the underlying claims primarily seek contribution for clean-up of the Aquifer, the relevant damage under the "occurrence" definition is the Aquifer's contamination. The PCE, if any, discharged by Laga could not have reached the Aquifer immediately upon release. By all accounts, it would have taken at least some time for the PCE to migrate through the Laga property and reach the groundwater. Because of this Newark argues that it is the PCE's contact with the groundwater, not the initial discharge, that constitutes the relevant damage and invokes the policy's coverage. It further argues that scientific reports demonstrate that the PCE could not have possibly reached the groundwater until 1974 at the earliest. Given these circumstances, Newark concludes that no covered "occurrence" could have taken place until after expiration of the Newark policy. Resolution of this argument requires threshold consideration of the appropriate trigger for coverage under Newark's occurrence-based policy. In general terms, the policy covers injury or property damage caused by an "occurrence," which is defined essentially as an accident resulting in property damage during the policy period. The question prompted by this definition is whether an insurer is on the risk when the accident occurs, when the resulting damage occurs, when the damage is discovered, or at some other point. That questionhas been settled for policies governed by New York law. Under New York law, coverage under policies containing a definition of occurrence substantially similar to the one at bar is triggered when an "injury-in-fact"—that is, an actual injury—takes place during the policy period. This holds true regardless of when the cause of the injury happened or when the injury was discovered. See American Home Products Corp. v. Liberty Mutual Ins. Co., 748 F.2d 760, 766 (2d Cir. 1984) ("a real but undiscovered injury, proved in retrospect to have existed at the relevant time, would establish coverage, irrespective of the time the injury became [diagnosable]") (alteration in original; internal quotation marks omitted); see also Stonewall Ins. Co. v. Asbestos Claims Mgmt. Corp., 73 F.3d 1178, 1195 (2d Cir. 1995) (acknowledging that the Second Circuit's "interpretation of the CGL policy provisions applies the 'injury-in-fact' approach"), modified on denial of reh'g, 85 F.3d 49 (2d Cir. 1996); cf. Continental Casualty Co. v. Rapid-American Corp., 80 N.Y.2d 640, 651, 593 N.Y.S.2d 966, 609 N.E.2d 506 (1993) (applying injury-in-fact trigger as proposed by both parties and recognizing that "Federal courts have concluded that the 'injury-in-fact' rule is most consistent with New York law."). In the property damage context, this approach has translated into a "damage-in-fact" trigger, meaning that coverage will be invoked if it is shown that damage to property actually occurred during the period for which the insurer was on the risk. See Maryland Casualty Co. v. W.R. Grace and Co., 23 F.3d 617, 626-27 [24 ELR 20968] (2d Cir. 1994) (applying damage-in-fact meant that coverage was triggered for insurer on the risk when asbestos was installed because actual damage to property occurred upon installation); see also Cortlandt Pump & Equipment Inc. v. Firemen's Ins. Co. of Newark, 194 A.D.2d 117, 604 N.Y.S.2d 633, 636 (3d Dep't 1993) (adopting date of injury-in-fact, as opposed to date of discovery of damage, as trigger for occurrence-based property damage coverage); State of New York v. AMRO Realty Corp., 697 F. Supp. 99, 102 n.5 (N.D.N.Y. 1988) (coverage for pollution damage to property triggered upon damage-in-fact, rather than when damage was discovered), aff'd in part rev'd in part on other grounds, 936 F.2d 1420 (2d Cir. 1991); Hoechst Celanese Corp. v. Certain Underwriters at Lloyd's London, 673 A.2d 164, 167 (S. Ct. Del. 1996) ("the trigger of coverage under New York law is 'injury in fact'"; under this rule, "covered property damage must, in fact, result during the policy period to trigger the policy in effect at that time"). Application of this seemingly straightforward rule has met with some complications, particularly in the context of slowly developing injuries or property damage. In Maryland Casualty, the Second Circuit recognized that the key date for purposes of determining coverage under the injury-in-fact trigger may differ depending on the type of damage. In this regard, the court distinguished the one-time installation of asbestos from other "types of property damage—such as the gradual contamination of earth and groundwater by leaking land-fills—[which] may be analogous to the slow progression of diseases such asbestosis and cancer . . . . These different circumstances must be carefully considered in attempting to determine when damage-in-fact occurs." 23 F.3d at 627 (citation omitted). In a later case, the Second Circuit construed this passage to mean that "there can be triggering at more than one point in time when a claimant asserts injury-in-fact due [30 ELR 20012] to asbestosis or cancer." Stonewall, 73 F.3d at 1195. In the latter circumstances, courts applying New York law have concluded that injury-in-fact takes place during the entire gradual injury trajectory from inception of the disease to its manifestation, triggering all policies on the risk during the period. See, e.g., Stonewall, 73 F.3d at 1195 (with respect to progressive diseases, injury-in-fact rule "permits triggering at various points when evidence shows injury to have occurred."). The parties at bar do not dispute that injury-in-fact is the appropriate test. Instead, they are at odds over when the actual property damage can be said to have occurred under that test in the bulk of the underlying claims asserted against the Duplan Defendants. It seems relatively uncontested that coverage for any claims stemming from damage to and clean-up of the Laga site itself is triggered under the policy upon the disposal or release of PCE at the site. See Newark Memorandum in Reply to Successor Trust's Response at pp. 16-17. Indeed, Newark does not urge dismissal on the "occurrence" basis of the claim interposed by the current owner of the site which appears to be the only claim seeking recovery of costs related to damage to the Laga site itself. The core of the occurrence dispute between the parties instead involves the claims for clean-up of the Aquifer which was allegedly polluted by migration of the PCE from the Laga site. In Newark's view, the damage-in-fact trigger is not satisfied until the PCE actually reached the Aquifer, and based on various scientific reports generated in the underlying action Newark argues that it would have taken at least 3 1/2 years for any PCE discharged onto land at the Laga site to have reached and contaminated the Aquifer. Because construction of the Laga plant was assertedly not completed before 1970, Newark contends that the PCE contamination for which Laga is potentially responsible could not have occurred before 1974—after Newark was off the risk. The Duplan Defendants argue, by contrast, that the trigger for all the underlying claims, including the claims arising from damage to the Aquifer, is the release of the contaminants onto the Laga site. Taking this approach, the Duplan Defendants argue that an occurrence clearly could have taken place during the policy term because the Laga plant was built and began operations utilizing the PCE in 1970 or 1971 and therefore a discharge could have occurred while Newark's policy was in effect. Few courts have had occasion to consider when damage occurs in the context of property damage caused by pollution. Those that have hold that coverage is triggered at the time of contamination. See Unimax Corp. v. Lumbermens Mutual Casualty Co., 908 F. Supp. 148, 155 (S.D.N.Y. 1995) (recognizing that "an 'occurrence' takes place at the time contamination happens," court held that allegations of disposal of waste onto site during policy period were sufficient to trigger duty to defend in suit seeking costs of clean-up of property); Endicott Johnson Corp. v. Liberty Mutual Ins. Co., 928 F. Supp. 176, 180 (N.D.N.Y. 1996) (in case seeking insurance coverage for clean-up of landfill and groundwater, court noted that in a prior unpublished decision it had held that "each act of dumping caused property damage on contact" thereby constituting an "occurrence" under the policy). Pursuant to the "actual damage" trigger adopted by Maryland Casualty and the other cited cases, one can easily conclude that when liability results from the destruction and clean-up of contaminated land upon which pollutants were disposed, the key damage occurs upon contact of the contaminants with the land. In that case, the land obviously suffers damage when it incorporates the contaminants, and it incorporates the contaminants upon, or very shortly after, disposal. As noted, there does not appear to be any controversy over this aspect of the trigger analysis, to the extent damage to the Laga site itself is involved. No case cited by the parties squarely addresses the situation presented by the remainder of the Virgin Islands claims here: when third-party property is alleged to have been contaminated through the gradual seepage of pollutants emanating from an insured's property. The question here becomes whether coverage for the Aquifer damage claims is triggered at the time of the initial release of the pollutants onto the Laga site; at the time a "significant quantity of the pollutant sufficient to have some potentially damaging effect," Northville, 89 N.Y.2d at 634, 657 N.Y.S.2d 564, 679 N.E.2d 1044, reached the groundwater; or some other time. This appears to be an issue of first impression under New York law. To resolve it, I begin with the Second Circuit's observation in American Home Products, that under the standard "occurrence" definition, "injury cannot be read as the equivalent of exposure, because the policy contemplates injury caused by exposure; since a cause normally precedes its effect, it is plain that an injury could occur during the policy period although the exposure that caused it preceded that period." 748 F.2d at 764. As one New York court has observed, "the policy does not include mere exposure to 'conditions' existent during the policy period, but rather focuses on the 'result' in 'bodily injury' during the policy period." Van Wyck Assoc. v. St. Paul Fire & Marine Ins. Co., 115 Misc. 2d 447, 454 N.Y.S.2d 266, 269 (N.Y. Sup. Ct. 1982), aff'd, 95 A.D.2d 989, 464 N.Y.S.2d 617 (2d Dep't 1983). In certain cases, the cause and damage may be temporally close, as in the case of installation of asbestos, or disposal of pollution directly onto land or water. But the fact that "coverage is predicated not on the act which might give rise to ultimate liability, but upon the result," American Motorists Ins. Co. v. E. R. Squibb & Sons, Inc., 95 Misc. 2d 222, 406 N.Y.S.2d 658, 659 (N.Y. Sup. Ct. 1978), means that coverage is not triggered by the release of contaminants alone. Since actual property damage must occur during the policy period as the authorities instruct, mere discharge cannot trigger coverage when the damage allegedly caused thereby did not commence until the pollutants reached, and contaminated, the subject property. Unlike the Laga property itself therefore, it is not possible to equate "damage" with "discharge" with respect to contamination of the Aquifer, since it indisputably would have taken some appreciable amount of time for any PCE released onto the Laga site to reach the underground water supply. This is precisely the conclusion drawn by the Fourth Circuit in a case applying an analogous injury-in-fact trigger under South Carolina law. In Spartan Petroleum Co., Inc. v. Federated Mutual Ins. Co., 162 F.3d 805 [29 ELR 20393] (4th Cir. 1998), the owner of an underground gas storage system sought coverage for a claim asserted against it for damage to adjoining property caused by gas leakage. The insurer provided insurance from January 19, 1985 to January 19, 1987. The leak was discovered in January of 1986. Adjoining property owners brought suit in 1994 for contamination discovered in March of 1990. Spartan argued that the relevant injury-in-fact that triggered coverage for all damages resulting from the gas leakage was the injury to its own property which occurred when the insurer was on the risk. In Spartan's view, the date when the gas migrated to the adjacent property was "irrelevant." 162 F.3d at 807. The Third Circuit took a contrary view. It held that the subject policy was triggered not when the gas leak occurred, but when the gas migrated to the adjoining property: "The determinative date under an injury-in-fact trigger such as South Carolina's is when the claimant's property was damaged." Id. at 809. Put another way, the court held that: the injury-in-fact trigger requires an insured to demonstrate that during the policy period an injury, caused by the underlying "occurrence," occurred to the property that is the subject of the underlying third-party action. Id. at 810 (emphasis added). The insured was therefore required to prove that contamination reached the claimant's property prior to the expiration of the policy. Id. at 811. This reasoning is consistent with New York's injury-in-fact approach. It would be antithetical to a rule that requires "actual" damage to allow coverage to be triggered at some point before the property that is the subject of the claim is harmed. The injury-in-fact rule requires actual contamination of the property alleged to have been damaged, which in the case of the Aquifer dictates that coverage is not triggered until the PCE actually reached the groundwater that comprises it. In consonance with Spartan, I conclude that the date the of contamination to the Aquifer controls, not some earlier date when PCE may have been released onto the Laga site. The Duplan Defendants rely on Cortland Pump & Equip. Inc., supra. 194 A.D.2d 117, 604 N.Y.S.2d 633, as authority for the proposition that release of the PCE onto the Laga property is sufficient to satisfy the injury-in-fact standard and invoke coverage of the policy regardless of whether the PCE actually migrated to the Aquifer during that period. This reliance is misplaced. Cortland did not directly address [30 ELR 20013] whether coverage is triggered by the mere release of contaminants during the policy period even if the contaminants did not reach the allegedly damaged property until after expiration of the policy term. In Cortland, the insurer was held obligated to defend a repair service in a contribution claim asserted by a gas station sued for pollution damage to adjacent properties. The damage allegedly stemmed from leakage of gasoline from a gas pump's elbow joint broken when a motorist drove away with the nozzle still in the gas tank. Id. at 635. The damaged tank was repaired by the insured repair service which negligently failed to identify the crack. The accident occurred on July 1, 1989, thirty days before expiration of the repair service's insurance policy. The lower court granted the insurer's motion for a declaration that it had no duty to defend the contribution claim because the damage to the adjacent properties was not discovered until March of 1990, well after the policy expired. The Appellate Division reversed. It held that injury-in-fact, not discovery of the injury, was the appropriate trigger for the occurrence-based policy. The court concluded that the underlying complaints adequately alleged such damage—which the court defined as "a continuous occurrence resulting from [the repair shop's] alleged negligence"—during the policy period. 604 N.Y.S.2d at 635. I do not regard Cortland as making any definitive statement as to whether the release of pollutants satisfies the injury-in-fact trigger in the case of migration. Unlike Spartan, the court was not confronted with and forced to choose between two competing dates for determining coverage under the injury-in-fact trigger; i.e., the date of discharge or actual migration. Instead, the court focused on the quite separate issue of "whether the date of discovery or the date of injury-in-fact triggers insurance coverage" with respect to property damage caused by contamination from hazardous materials. Id. at 636. The court chose injury-in-fact. Then, without explaining precisely what constituted the actual damage or what the allegations were in the underlying complaints, the court held that the underlying complaints did not exclude the possibility that damage occurred during the policy period. Id. One might speculate, as the Duplan Defendants apparently do, that because the policy expired only 30 days after the gas pump accident, the court must have regarded the "damage" for occurrence trigger purposes as the leakage itself. But this reading is troubling because it would improperly equate "accident" with the resulting "damage," and is unwarranted because the court was not called upon to decide whether the leak alone, rather than the migration, constituted the injury-in-fact. Cortland is a shaky foundation for such a proposition. Having determined when coverage is triggered in theory for gradual contamination, the question at bar becomes whether the allegations in the underlying claims present the possibility that such contamination occurred during the Newark policy period. To reiterate, the duty to defend arises whenever the underlying allegations "arguably or potentially bring the action within the protection purchased." Avondale Ins. Indus., Inc. v. The Travelers Indem. Co., 887 F.2d 1200, 1204 [20 ELR 20255] (2d Cir. 1989), reh'g denied, 894 F.2d 498 (1990). Under this principle, "where the underlying complaint does not preclude the possibility that the injury-in-fact occurred during the subject policy period, the policy is triggered." American Empire Ins. Co. v. PSM Insur. Cos., 687 N.Y.S.2d 32, 33 (1st Dep't 1999); see also Greater New York Mutual Ins. Co. v. Royal Ins. Co., 238 A.D.2d 261, 657 N.Y.S.2d 326, 326 (1st Dep't 1997) ("plaintiffs are entitled to judgment since the underlying complaint does not exclude the possibility that injury-in-fact occurred during appellant's policy period"); Cortlandt, 604 N.Y.S.2d at 636 (same). This holds true even "where the complaint does not state facts with sufficient definiteness to clearly bring the case within or without the coverage of the policy." Munzer v. St. Paul Fire and Marine Ins. Co., 145 A.D.2d 193, 538 N.Y.S.2d 633, 636 (3d Dep't 1989) (internal quotation marks and citation omitted). In the instant case, Newark has failed to persuade that the claims are uncovered. The underlying third-party allegations raise the clear potential that the damage to the Laga site and to the Aquifer occurred during the period. This is particularly true if I assume, as I must on this motion, that the insurance coverage extended to July 3, 1973. The third-party complaints allege that from 1970 through 1979, the Duplan Defendants operated a textile manufacturing plant at the Laga site, and through its dry-cleaning operations used, stored and disposed of PCE which was "released to the soil and groundwaters in and around the Laga facility and site." See, e.g., Von Mehren Aff., Ex. 4(D) at P31. There can be no doubt that these claims allege disposal onto the site and into the groundwater and, therefore, injury-in-fact during the policy period. See Stone & Webster Management Consultants, Inc. v. The Travelers Indemnity Co., No. 94 Civ. 6619, 1996 WL 180025 (S.D.N.Y. Apr. 16, 1996) (allegations that hazardous substances had been disposed of on insured's site and into river and were carried by groundwater into river over continuous, unspecified period alleged damage potentially occurring during policy period); Spartan Petroleum, 162 F.3d at 808 n.2 (under South Carolina duty to defend principles substantially similar to those of New York, insurer was required to defend allegations that insured released contaminants from 1978 to 1986 because allegations allowed a possibility that contaminants migrated to the damaged adjacent property in 1986, thereby causing requisite damage during policy period); Unimax, 908 F. Supp. at 156 (allegations that insured disposed of hazardous wastes on site over unspecified period suggested reasonable possibility of covered occurrence during policy period); cf. American Empire Ins. Co., 687 N.Y.S.2d at 33 (insurer held obligated to defend because complaint did not preclude the possibility that alleged injury, ingestion of lead poisoning, occurred during policy period). Notwithstanding the allegations which plainly admit of the possibility of an injury-in-fact during the policy period (whether it expired in 1971 or 1973), Newark argues that scientific reports demonstrate that it would have taken any PCE released from the Laga site a minimum of 3 1/2 years to reach the Aquifer 30 feet below the property. Newark also submits evidence which it claims establishes that the Laga facility did not even begin to use PCE until at least 1971. Armed with this evidence, Newark argues that no PCE could have migrated to, and therefore "damaged," the Aquifer until 1974 at the earliest. "An insurer seeking to avoid its duty to defend bears a heavy burden." Avondale, 887 F.2d at 1204. It must show "as a matter of law that there is no possible basis in law or fact upon which the insurer might be held to indemnify [the insured]." Id. The insurer cannot free itself from an establishedduty to defend even if extrinsic facts "indicate that the claim may be meritless or not covered." Fitzpatrick v. American Honda Motor Co., 78 N.Y.2d at 63, 571 N.Y.S.2d 672, 575 N.E.2d 90. Thus, although the ultimate burden rests with the insured to prove the "cause of the occurrence, the result, and that the result occurred during the policy period," Maryland Casualty, 23 F.3d at 628, only where the insurer can show "to a certainty" through extrinsic evidence that coverage is not possible, can the insurer be relieved of its duty to defend. Avondale Ins. Indus., Inc. v. The Travelers Indem. Co., 774 F. Supp. 1416, 1424 (S.D.N.Y. 1991). See Munzer, 538 N.Y.S.2d at 636 ("an insurer denying a duty to defend has the burden to establish as a matter of law on a summary judgment motion that the injury complained of falls outside the coverage of the policy or that claims against the insured are unambiguously exempted from coverage"); see also Downtown Bar & Grill, Inc. v. Sphere Drake Ins. Co., No. 96 Civ. 6510, 1997 WL 188139, *2 n.1 (S.D.N.Y. Apr. 17, 1997) ("some cases have indicated that, in 'exceptional circumstances,' resort to extrinsic evidence to evaluate the claim is permissible, and that where a court can determine conclusively that there is no genuine dispute as to an extrinsic fact which when applied to the underlying allegations limits them to a claim not covered by the policy, the insurer no longer need defend.") (quoting Avondale, 774 F. Supp. at 1424). Newark fails to meet this exacting burden. The extrinsic evidence upon which it relies, which is disputed by the Duplan Defendants, does not unequivocally establish that no PCE could have possibly been used and disposed of by Laga before 1971, or that no PCE could have possibly reached the Aquifer until 3 1/2 years after its release onto the Laga site. On the record before the Court, it cannot be ascertained as a matter of law precisely when Laga began operations, when its use of PCE first commenced, or how long it may have taken for any released PCE to migrate to the Aquifer. Newark has therefore failed to establish on the present motion that the claims, even those arising from contamination of the Aquifer, fall outside the coverage period. Cf. Petr-All Petroleum Corp. v. Fireman's Insurance Co. of Newark, New Jersey, 188 A.D.2d 139, 593 N.Y.S.2d 693, 695-96 (4th Dep't 1993) (insurer required to defend based on allegations in underlying complaint that for over two decades insured gas station had disposed [30 ELR 20014] of pollutants that migrated into adjoining property; held lower court improperly considered extrinsic evidence showing that leaks may have occurred as a result of accident after expiration of policy where complaint did not allege leak as result of a specific identified occurrence or at any particular time); Avondale, 774 F. Supp. at 1434 (evidence did not "demonstrate to a certainty" that insurer would be absolved from indemnification and therefore insurer had duty to defend); Unimax, 908 F. Supp. at 155 (addressing argument that no contamination had occurred during policy period, court held that "the issue of when contamination occurred is a material question of fact that precludes summary judgment"); Montrose Chemical Corp. of California v. Admiral Ins. Co., 10 Cal. 4th 645, 42 Cal. Rptr. 2d 324, 913 P.2d 878, 907(S. Ct. Calif. 1995) (en banc) ("Whether the damages and injuries alleged were in fact 'continuous' is itself a matter for final determination by the trier of fact."). As this discussion makes evident, the allegations in the underlying third-party complaints demonstrate the potential for coverage, and the evidence submitted by Newark fails to conclusively refute it. Newark's motion for a declaration that it has no duty to defend is denied. Issues of fact concerning, inter alia, when Laga's operations and its use of PCE commenced and the date of migration of any released PCE to the Aquifer, preclude summary judgment on the duty to indemnify. 3. Dismissal of Successor Trust's Claims Newark also seeks dismissal of the coverage claims asserted by the Successor Trust under the Laga policy. Because the Successor Trust is not arguably a named insured on the policy, it must establish that it otherwise has a right to coverage. See Preferred Mut. Ins. Co. v. Ryan, 175 A.D.2d 375, 572 N.Y.S.2d 447, 449 (3d Dep't 1991) (a party asserting that someone other than a named insured is an insured under a policy bears the initial burden of submitting proof of its covered status). Courts have permitted entities that are not named insureds to invoke rights under an insurance policy in certain narrow circumstances, such as when the party seeking coverage (1) is the surviving corporation in a merger with the insured; (2) is legally regarded as the corporate successor of the insured through purchase or transfer of the insured's assets; or (3) has been assigned the insured's rights in the policy. See generally EM Indus. Inc. v. Birmingham Fire Ins. Co., 141 A.D.2d 494, 529 N.Y.S.2d 121, 123 (2d Dep't 1988) (plaintiff failed to establish entitlement to coverage through insured's assignment of policy, through acquisition of corporate assets or, since there was no merger with insured, under "successor-enterprise liability theory"), appeal denied, 73 N.Y.2d 704, 537 N.Y.S.2d 492, 534 N.E.2d 330 (1989); Total Waste Management Corp. v. Commercial Union Ins. Co., 857 F. Supp. 140, 150-52 (D.N.H. 1994) (issue of fact existed as to whether company was corporate successor to insured through purchase of insured's assets); cf. General Refractories Co. v. Travelers Ins. Co., Nos. 88-2167, 88-2250, 1995 WL 634451, *5-7(E.D. Pa. Oct. 27, 1995) (discussing theories of securing rights under insurance policy and citing cases), rev'd without published opinion, 107 F.3d 7 (3d Cir. 1996). The Successor Trust has not demonstrated any permissible basis for coverage under the Laga policy. It should go without saying that neither the initial Trust nor the Successor Trust purchased Laga's assets, nor does anyone suggest that Laga assigned them the policy. The only conceivable basis for the Successor Trust's legal interest in the Laga policy must necessarily arise from its succession to the assets of Panex, the reorganized Duplan. But Newark has shown without contradiction that the assets and liabilities of Laga were not among the assets and liabilities of Panex to which the initial Panex Trust, and in turn the Successor Trust, succeeded. The Successor Trust was established September 30, 1997 by order of the Delaware Chancery Court to be "the successor entity to the Panex Trust and Panex, Inc. and will succeed to and accept the assets, liabilities, rights, interests, and standing of the Panex Trust and Panex, Inc." See Affidavit of R. Karl Hill dated May 21, 1998 ("Hill Aff."), Ex. C. at pp. 3-4. The original Panex Trust, in turn, was established pursuant to a Trust Agreement executed September 12, 1985 "for the sole purpose of holding the Assets transferred to it by Panex." Hill Aff., Ex. C. at Article 3.1. It will be remembered that Panex was the reorganized and recapitalized entity that Duplan became in 1981 after it emerged from Chapter 11 bankruptcy proceedings. The approved Duplan Plan of Reorganization provided that as of the confirmation date, the assets of Duplan "shall substantially consist of the capital stock of Kickaway, Kitchener, Wundies and Fabrics and the assets of the Rochester Button Division. Effective as of the Confirmation Date, Lady Suzanne and Laga shall be dissolved." See Affidavit of Joseph Zuckerman dated July 5, 1994, at Ex. A., attached to Letter to the Court dated July 2, 1998 from Peter Von Mehren (emphasis added). See also In re The Duplan Corporation, 9 Bankr. 921, 923 (S.D.N.Y. 1980) (approving the Duplan Plan of Reorganization and recognizing that "of the thirteen original operating entities that comprised Duplan a decade ago, only four remain: Wundies, Kickaway, Kitchener and Rochester Button."). Buttressing that observation is a provision in a document dated April 30, 1979 submitted by the Duplan bankruptcy trustee to Judge Kevin T. Duffy of this district explaining that the trustee had determined "that Laga could not be included in any plan of reorganization and that it was in the best interests of debtor estates if Laga's operations were ceased and its assets disposed of, to the extent possible, in the ordinary course of business." See Supplemental Affidavit of Peter A. Von Mehren dated Feb. 11, 1998, at Ex. 1. To this end, it is apparently not disputed that certain of Laga's assets, including the Tutu Wells property, were sold to Panex Co. sometime prior to 1982. All this constitutes convincing support for a conclusion that none of Laga's assets were included in the bankruptcy estate. It follows from that fact that Laga's assets, including the Newark insurance policy, were never transferred to the reorganized Panex, and that in consequence neither the Panex Trust nor the Successor Trust could ever have been invested with rights to the Laga insurance policy. Further support for this proposition is contained in the Delaware Chancery Court order establishing the Successor Trust which describes the assets of the Panex Trust (to which the Successor Trust succeeded) as including, inter alia, "all right, title and interest in the insurance policies of Panex, Inc., Duplan Corporation, and the Panex Trust." See Hill Aff., at Ex. C, P12(b). Laga's insurance policies are absent from this list. The Successor Trust does not offer any evidence to rebut Newark's factual contentions or to otherwise demonstrate its legal right to the Newark insurance policy. Instead it implores the Court to excuse it from responding to Newark's argument on the theory that if it were to argue in this action that it succeeded to the Newark policy that position would severely undercut its potential defense in the Virgin Islands that the chain of successor liability has been broken. In addition, without offering any facts contradicting those asserted by Newark, it tersely argues that the motion should be denied because issues of corporate successorship and the transfer of assets constitute issues of fact not to be determined on summary judgment. In effect, the Successor Trust would have the Court reject Newark's motion out of hand and ignore the Rule 56 standards to position it favorably in another litigation. The Court cannot accept this unprecedented invitation. The Successor Trust has failed to refute Newark's supported contention that Laga's assets were never transferred to the Successor Trust. Thus even if questions of corporate successorship often involve disputed factual issues that preclude summary judgment, the Successor Trust has offered no evidence to create such a dispute in this case. Moreover, the Successor Trust presents no legal authority for its argument that this Court should not force it to take a position in this action that might be contrary to a potential defense in the Virgin Islands action. To the extent its only argument to establish its entitlement to coverage under the Laga policy is that it has succeeded to Laga's assets, then logic dictates that it must assert the argument or lose the motion, even if it doing so would detrimentally affect its ability to make the contrary argument in the Virgin Islands action. To the extent the Successor Trust has another argument that would allow it to withstand summary judgment, it certainly has not disclosed what it is. In the end, we are faced with uncontested evidence that Laga's assets, including the Newark policies, were not included in the assets of the reorganized Panex. Since the assets and rights of the Successor Trust derive from Panex and since Newark has made an unrebutted showing that Panex did not include the assets of Laga, it follows that the Successor Trust did not succeed to Laga's assets, including its insurance policies. As a stranger to the Newark policy, the Successor Trust has no standing to assert Laga's rights under it, and Newark's motion to dismiss the Successor Trust's claims against it is therefore granted. 4. Dismissal of Wellsville Claims It is undisputed that the Newark policy named only Laga and that Laga maintained facilities and operations only in the Virgin Islands. For these reasons, without opposition by the Duplan Defendants, Newark requests dismissal of all claims for coverage arising from the Wellsville pollution. There being no opposition, I grant the request. Newark is free from liability under the Laga policy for damages arising from the Wellsville pollution. D. Wausau's Motion for Summary Judgment Having settled the Duplan Defendants' coverage claims arising from the Virgin Islands pollution, Wausau now moves a determination that it is not obliged to defend or indemnify the Duplan Defendants in connection with the Wellsville pollution. Wausau issued Duplan a succession of CGL policies from 1959 to 1977. According to Wausau, none of these policies provide coverage for liability resulting from the operations of Rochester Button for three reasons: (1) those policies issued prior to April 1, 1970 pre-date Duplan's acquisition of Cap-Roc, Inc., Rochester Button's parent, and therefore do not cover activities of Rochester Button before that date; (2) the coverage limits of those issued between April 1, 1969 and April 1, 1972, have been exhausted by settlement payments; and (3) those issued after April 1, 1971 contain pollution exclusions which bar coverage for the pollution alleged. Each of these temporal categorieswill be addressed in turn. Cap-Roc, Inc. was merged into Duplan as of August 21, 1969 with Duplan as the surviving corporation. See Merger Agreement dated August 21, 1969, and Certificate of Merger dated August 29, 1969, affidavit of John Barker dated November 6, 1998, at Ex. 16, 17. The Wausau policies issued to Duplan prior to April 1, 1970 did not name Cap-Roc, Inc. or Rochester Button as additional insureds, even though other subsidiaries were specifically named in some of them. Prior to 1970, the policies' "insured" definition did not include Duplan's subsidiaries or affiliates and the only New York state premises listed are located in New York City. The first Wausau policy to name Rochester as an additional insured and to cover property in Wellsville was the first policy effective after the merger, from April 1, 1970 to April 1, 1971. These undisputed facts strongly suggest that the activities of Rochester were not covered under the Wausau policies prior to April 1, 1970. The Successor Trust does not dispute any of these material facts.17 Instead, it offers the somewhat puzzling theory that coverage for Rochester Button commenced before 1969 because Cap-Roc and Duplan merged de facto at least as of October, 1968. It draws this conclusion exclusively from the fact that at that time Duplan owned 52% of Cap-Roc's stock and intended to make a tender offer for Cap-Roc. This argument does not withstand scrutiny. Putting aside the fact that this de facto merger theory is unsupported by legal precedent, it is belied by the very document the Successor Trust urges supports it. A letter dated October 24, 1968 from Duplan's then-president to Cap-Roc shareholders explains that a planned merger of the two companies was not consummated, and that although Duplan desired to pursue a merger it "has no present plans as to the accomplishment of such objective." See Affidavit of R. Karl Hill dated January 21, 1999, at Ex. K. The absence in the record of any evidence that the merger of the two companies was effected before August 21, 1969 causes the bottom to drop out of the Successor Trust's argument that insurance covered Rochester Button prior to that date. In any event, the Successor Trust has not explained why the date Wausau's coverage for Rochester Button's liabilities began is determined by the date of the merger, rather than the date the insurance contract first clearly acknowledged that Wausau took on the risks associated with Rochester Button. The Successor Trust does not dispute that Rochester Button was not named in its own right or as a subsidiary of Duplan until the 1970 policy, the same policy on which the Wellsville premises were first listed. Rather, it attempts to withstand dismissal by citing cases as authority for the proposition that a surviving corporation in a merger may assert rights under insurance policies issued to the third-party with which it merged. This attempt fails because the cases address an entirely inapposite situation. The cited authorities uniformly hold that a surviving corporation may assert claims under insurance policies issued to an acquired company for pre-merger liabilities of the acquired company, even though the survivor was not named on the policy. See, e.g., Northern Ins. Co. of New York v. Allied Mutual Ins. Co., 955 F.2d 1353, 1357-58 (9th Cir. 1992). In this case by contrast, the subject policies did not name Cap-Roc, which was merged into the named insured, Duplan. Courts have held that insurance policies issued to a surviving named insured such as Duplan do not cover pre-merger liabilities of a third-party that merged into or was acquired by the survivor. See, e.g., Textron, Inc. v. Aetna Cas. & Surety Co., 638 A.2d 537, 540-43 (S. Ct. R.I. 1994).18 As for the second temporal category, Wausau argues that the coverage limits of the three policies effective from April 1, 1969 to April 1, 1972 have been exhausted by settlement payments made for the Virgin Islands claims and another environmental litigation not at issue in the present action. The Successor Trust does not dispute that the limits of the first two policies and all but $ 3,000 of the third have been exhausted. It does argue that $ 3,000 of coverage under the 1971-1972 policy remains available because the Successor Trust itself never received that $ 3,000 payment. This contention is without merit. Wausau has submitted evidence that it paid $ 7,500 in settlement of claims asserted against certain Panex defendants, corporate predecessors of the Successor Trust, which exhausted the $ 3,000 remaining under that policy. See Keyser Aff. at Ex. A. No evidence has been offered to refute that fact. Nor has the Successor Trust furnished the Court any principled reason to hold that a payment made to an entity covered under a Wausau policy does not count against that policy's coverage simply because it was not made to the Successor Trust itself. Such a contention is without legal or factual support on this record. In any event, even if $ 3,000 of coverage does remain under the 1971-1972 policy, the Successor Trust may not recover under that policy for claims arising from the Wellsville pollution because it contains the pollution exclusion described in Part II(A), supra. Because I have held that the exclusion precludes coverage for the claims asserted in the Wellsville action, I grant Wausau's motion for a declaration that it is not required to defend or indemnify the Successor Trust for claims resulting from the Wellsville pollution under the policies in effect from April 1, 1971 to September 16, 1976 which contain that exclusion. E. Newark's Motion to Amend Its Answer On July 11, 1994, Newark responded to Wausau's declaratory judgment complaint by filing an answer that contained nine paragraphs of denials and admissions and a section captioned "Affirmative Defenses, Counterclaims and Cross-Claims." This title is some-what of a misnomer since the section asserts four "Defenses" and no explicit cross-claim or counter-claim. The first two affirmative defenses are not relevant for present purposes. The third avers that Newark is not obligated to defendor indemnify the Duplan Defendants based upon grounds asserted in thirty-eight sub-paragraphs invoking legal and equitable doctrines, and provisions of the standard Newark CGL policy. Significantly, one of the grounds avers generally that coverage "is barred, in whole or in part, by the provisions, terms, exclusions, conditions and limitations which are a part of any Firemen's policy(ies)." Newark Answer, at P12(ee). Reference to the standard Newark policy terms was necessary because the Duplan Defendants had not yet provided Newark with a copy of the insurance policy Newark had allegedly issued. The fourth and last defense preserves the ability of Newark (referred to as "Firemen's" in the answer) to assert possible future defenses: Firemen's does not possess sufficient information at this time to enable it to determine all of its defenses, including defenses based upon the terms, conditions or exclusions of any alleged Firemen's policy(ies), or of any other applicable policy. Firemen's, therefore, reserves its right to assert all defenses that may be pertinent to plaintiff's and all of The Duplan Defendants' request for coverage with [30 ELR 20016] respect to the Purported Underlying Claims once a specific policy is alleged and proven and the precise nature of any claim is ascertained. In addition, Firemen's is entitled to the benefit of all defenses to coverage available to all underlying insurers which have been or may be raised, and such defenses are incorporated herein by reference; Newark neglected to serve a copy of this answer on counsel for the Duplan Defendants, although it was properly filed with the Court and served upon Wausau and the other defendants then in the case. This omission was apparently inadvertent. See Affidavit of Sydney Rosen dated November 18, 1996 at PP3-4, attached as Ex. 1 to Newark's Memorandum in Reply. On August 5, 1994, shortly after filing its answer, Newark moved to dismiss claims for coverage in a parallel declaratory judgment action the Duplan Defendants initiated in the Virgin Islands. That action was subsequently stayed by the Virgin Islands court under the "first-filed" rule because it was duplicative of this earlier-filed action. In that motion, which was not decided before the action was stayed, Newark sought to dismiss the Duplan Defendants' coverage claim on lost policy grounds, arguing that the Duplan Defendants had failed to prove the existence of a valid policy issued by Newark.19 The Duplan Defendants had not at that time come forward with evidence definitively establishing coverage, and had alleged, incorrectly as it turns out, that Newark provided excess coverage. On March 1, 1995, the Duplan Defendants for the first time furnished Newark a copy of the alleged policy (albeit incomplete) which indicated that Newark provided coverage to Laga on a primary basis. More than a year later, Newark, represented by new counsel, filed the present motion to amend its answer to the declaratory judgment complaint. The stated reasons for the amendment are: (1) to address claims for coverage arising out of new or newly amended third-party complaints in the Virgin Islands action; (2) to "conform the language of the Newark answer to the style that Newark's present counsel uses generally in insurance coverage actions," and (3) to address the particular provisions of the newly-produced policy. See Memorandum of Law in Support of Newark's Motion to Amend, at p. 3. Newark's proposed amended answer is presented in a format and style substantially different from its original answer and the two are consequently difficult to compare. It contains thirty-nine paragraphs of admissions and denials and thirty-six affirmative defenses. It also asserts a cross-claim against the Duplan Defendants and the other insurers in which it denies any obligation to defend or indemnify for the underlying claims. The Duplan Defendants oppose the amendment, arguing primarily that under the doctrine of constructive waiver Newark has irrevocably waived its right to assert all defenses which it failed to assert in its motion to dismiss the Virgin Islands declaratory judgment action. The constructive waiver doctrine holds that an insurer is deemed to have waived any affirmative defenses that it fails to assert the first time it denies coverage for a particular claim. See, e.g., State of New York v. AMRO, 936 F.2d at 1429-33. The Duplan Defendants contend that the motion to dismiss constituted Newark's first denial of coverage because Newark's earlier answer in this case was not served on them and was not formally directed at them. Having said this, the Duplan Defendants wisely do not oppose any aspects of the proposed amendment that address the "new" third-party pleadings in the Virgin Islands because, as new claims, they obviously could not have been addressed in an earlier disclaimer. See Memorandum in Opposition dated October 30, 1996 ("Oct. 30, 1996 Mem.") at p. 7. Nor do they take issue with aspects of the amended answer that address the existence or nonexistence of coverage such as exclusions or the insuring clause, because under settled law such matters cannot be waived. See New York University v. Continental Ins. Co., 87 N.Y.2d 308, 310, 639 N.Y.S.2d 283, 662 N.E.2d 763 (1995) ("Coverage is the net total of policy inclusions minus exclusions, and the failure to disclaim based on an exclusion will not give rise to coverage that does not exist."). Their principal objection is instead directed at aspects of the amended pleading that apparently withdraw admissions made in the original answer, recast the pleading and asserts additional affirmative defenses that do not relate to the new third-party claims or to the existence of coverage. Rule 15(a) directs that leave to amend should be "freely given." The Second Circuit has emphasized that a Rule 15(a) motion should be denied only under limited circumstances: "for such reasons as undue delay, bad faith, futility of the amendment, and perhaps most important, the resulting prejudice to the opposing party." Richardson Greenshields Securities, Inc. v. Lau, 825 F.2d 647, 653 n.6 (2d Cir. 1987); see also Foman v. Davis, 371 U.S. 178, 182, 83 S. Ct. 227, 9 L. Ed. 2d 222 (1962) ("In the absence of any apparent or declared reason—such as undue delay, bad faith, or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendment previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, etc.—the leave sought should, as the rules require, be 'freely given.'"). The principle underlying Rule 15(a) is to "facilitate decision on the merits, rather than on the pleadings or technicalities." United States v. Webb, 655 F.2d 977, 979 (9th Cir. 1981). Thus, "the rule in this Circuit has been to allow a party to amend its pleadings in the absence of a showing by the nonmovant of prejudice or bad faith." Block, 988 F.2d at 350. Invoking futility, the Duplan Defendants argue the amendment should not be permitted because most of the new affirmative defenses must be deemed constructively waived. As mentioned, under the New York constructive waiver doctrine, an insurer may be deemed to have waived any defenses not articulated in its first disclaimer of coverage. "Waiver of a defense is proven by evidence that the insurer intended to abandon that defense." Commercial Union Ins. Co. v. International Flavors & Fragrances, Inc., 822 F.2d 267, 274 (2d Cir. 1987). An insurer's disclaimer of coverage "on certain grounds but not others is deemed conclusive evidence of the insurer's intent to waive the unasserted grounds." State of N.Y. v. AMRO, 936 F.2d at 1432; see also Lugo v. AIG Life Ins. Co., 852 F. Supp. 187, 192 (S.D.N.Y. 1994) ("The New York line of cases states that an insurer is deemed to waive a defense to coverage where other defenses are asserted, and where the insurer possesses sufficient knowledge of the circumstances regarding the unasserted defense."). The Duplan Defendants have not established constructive waiver under these principles. The crux of their argument is that Newark's first disclaimer of coverage constituted its motion to dismiss on lost policy grounds, not the earlier answer in this case which put forward numerous affirmative defenses and contained a reservation of rights. The Duplan Defendants argue that the first filed answer is a nullity for disclaimer purposes because Newark failed to serve them with a copy of it and because it is nominally addressed to Wausau, not the insureds. This argument is ill-founded. There can be no serious dispute that Newark clearly and affirmatively denied coverage in its answer to the complaint. See Answer at P12 ("[Newark] is not obligated to defend or indemnify The Duplan Defendants in connection with the Purported Underlying Claims"). Although Newark failed inadvertently to serve the answer upon the Duplan Defendants, it was nonetheless filed publicly with the court and served on all other defendants. Despite the absence of service, the answer with its concomitant disclaimer of coverage was by no means hidden from the Duplan Defendants. Indeed, it is telling that the Duplan Defendants nowhere represent that they were not aware of its contents soon after it was filed. I am not persuaded that Newark's answer was not a valid disclaimer of coverage anteceding the motion to dismiss. It is no less a disclaimer because the Duplan Defendants were not personally served with it or were not the parties to which the answer was formally directed.20 The Newark answer makes manifest its intention to preserve—not abandon—any defense not included therein. Paragraph 12(ee) avers broadly that coverage is barred "by the provisions, terms, exclusions, conditions and limitations which are a part of any [Newark] policy(ies)." In addition, paragraph 13 explicitly reserves Newark's right to assert in the future all pertinent defenses "once a specific policy is alleged and proven and the precise nature of any claim is ascertained." Together, these provisions belie any suggestion that Newark intended to abandon any defense based on the provisions of the policy or the nature of the underlying claims. Accordingly, it has not been shown that under New York law Newark waived any of the new affirmative defenses in its proposed amended answer. Apart from urging that amendment would be futile because Newark has waived many of its new defenses, an argument that I have rejected, the Duplan Defendants provide no compelling reason to deny leave to amend. To be sure, the Duplan Defendants state in conclusory fashion that in addition to futility "it appears that 'undue delay, bad faith or dilatory motive on the part of the movant [and] undue prejudice' may all be present." See Oct. 30, 1996 Mem. at p. 9. But they do not develop this sweeping statement or offer any foundation for it. Nor does the Court perceive any of the factors that traditionally warrant denial of a motion to amend. Nothing in the record suggests that Newark has acted in a dilatory fashion. Newark sought to amend the answer a little over a year (not a lengthy interval relative to the pace of this case) after it received a partial copy of the policy at issue, the first indication that it provided primary instead of excess coverage, and only months after new amended third-party pleadings were filed in the Virgin Islands action. I accept as reasonable Newark's explanation that once it had the policy at hand and could evaluate the new third-party claims, it desired to tailor its defenses to the new allegations and to the terms and conditions of the actual policy, rather than relying upon its standard policy provisions. The circumstances indicate that Newark sought amendment in response to those new developments in good faith and without undue delay. The fact that Newark may have been partially motivated by a desire to conform the style and format of its answer to that of newly retained counsel does not undercut that conclusion. As noted, there were other valid motivating factors, and the Duplan Defendants have not adequately shown that furthering that purpose constitutes an improper tactic. Even more importantly perhaps, in all their submissions the Duplan Defendants have not explained what specific prejudice, if any, they will suffer if the proposed amendment is allowed. Nor can I perceive any. Since the Duplan Defendants have not made the required showing of prejudice, bad faith or undue delay, the interests of justice in this case favor honoring the purpose behind Rule 15 of fostering decision on the merits. I will allow Newark to file and serve its proposed amended answer, within thirty (30) days of the date of this Opinion. Newark and National Union seek to compel the Duplan Defendants to provide complete responses to interrogatories and requests for admissions. The insurers additionally request a finding that the Duplan Defendants have waived their attorney/client privilege with respect to documents they have withheld as privileged without providing a privilege log or, alternatively, an order directing them to produce a privilege log or the purportedly privileged documents themselves. Since I have dismissed the claims asserted against National Union, its motion is moot. Newark remains a defendant, however, and by separate order I will refer its discovery motion to Magistrate Judge Katz who has been indispensable in assisting the Court in this case. For the reasons discussed above, the disposition of the various motions is as follows: (1) The summary judgment motions of CNA, Hartford and National Union seeking declarations that they are not obligated to defend or indemnify the Duplan Defendants for claims arising from the Wellsville and Virgin Islands pollution are granted because coverage for those claims is barred by the pollution exclusion contained in the subject policies. (2) Wausau's motion for a declaration that it is not obligated to defend or indemnify the Duplan Defendants for claims arising from the Wellsville pollution is granted. (3) Newark's summary judgment motion is denied to the extent it seeks a declaration that it is not obligated to defend or indemnify Gal and Lazare on the basis that they do not qualify as insureds under the policy it issued Laga, and on the basis that there is no possibility of a covered "occurrence" during the effective period of the policy. That aspect of Newark's motion that seeks dismissal of the Successor Trust's claim for coverage under the Laga policy is granted. (4) American Home's motion to dismiss claims asserted against it is granted as unopposed. (5) Newark's motion to amend its answer to the declaratory judgment complaint is granted. (6) Newark's discovery motion will be referred to Magistrate Judge Katz for a Report and Recommendation. All claims asserted against Wausau, CNA, Hartford and National Union are hereby dismissed. 1. In this Opinion, I will use the term "Duplan Defendants" to refer to any person or entity among those listed claiming rights under the insurance policies at issue. 2. The original Panex Trust was never named a party in this case. 3. Norman Halper and Oliver Lazare, as co-executors of Paul Lazare's estate, were it cently substituted as parties for the Paul Lazare. 4. The New York pollution was not at issue in the motions. In an aspect of the 1995 Opinion not relevant to the present motions, the Court granted the motion of Federal Insurance Company to dismiss the Duplan Defendants' cross-claims for defense and indemnity under director and officer policies issued to Panex and the Panex Trust. 899 F. Supp. at 1128-29. 5. Gal and Lazare have also been named by the U.S.E.P.A. as potentially responsible parties under CERCLA in an administrative proceeding that has not progressed significantly to date. 6. In light of its settlement of the Virgin Island claims, Wausau seeks summary judgment only with respect to Wellsville pollution claims. 7. Under New York law it is settled that "accidental" under the pollution exclusion means "unexpected and unintended," and that the focus of the phrase "sudden and accidental" is on the discharge, not on the resulting harm. 899 F. Supp. at 1120-21. In addition, the pollution must be both sudden and accidental to qualify under the exception. See Technicon Elec. Corp. v. American Home Assur., Co., 74 N.Y.2d 66, 75, 544 N.Y.S.2d 531, 542 N.E.2d 1048 [20 ELR 20380] (1989). At the time the 1995 Opinion was issued. New York's highest court had not determined the meaning of the term "sudden." However, this Court followed the majority of courts applying New York law in holding that "sudden" has a temporal focus and that a discharge cannot be "sudden" unless it is instantaneous or short-lasting. Id. The Court of Appeals subsequently adopted that definition in Northville. 8. Except for Panex Co., which is concededly not covered by any of the subject policies, Gal. Lazare and the Successor Trust are the only Duplan Defendants effectively remaining in the actions as the result of the dissolution of all the other corporate entities comprising the Duplan Defendants. 9. Although its brief is some what unclear on this point, the Successor Trust appears to suggest that summary judgment on the duty to indemnify would be inappropriate at this stage because Northville addressed only the duty to defend. See Successor Trust Memorandum dated November 19, 1998 in Opposition to Hartford's Motion for Summary Judgment, at pp. 6-9. To the extent the Successor Trust intends to make such an argument, it is unsupported. Northville addressed coverage under the pollution exclusion in the context of both the duty to defend and the narrower duty to indemnify. The Court of Appeals ultimately determined that based on the allegations in the underlying complaints and the facts in the record, the insurers had no duty to defend or indemnify. 89 N.Y.2d at 634, 657 N.Y.S.2d 564, 679 N.E.2d 1044. Under Northville, the Court may permissibly determine whether the pollution exclusion precludes the duty to indemnify on this motion. 10. Gal and Lazare do not offer any argument in opposition to the motion of American Home, conceding that they have not asserted any coverage claim against it. Accordingly, American Home's motion seeking dismissal to the extent of any coverage claims asserted against it is granted. 11. A complete copy of the policy has not been located. However, the Duplan Defendants have submitted documents establishing that Newark issued a CGL policy naming Laga as the insured effective from July 3, 1969 to July 3, 1970, and extended to July 3, 1971. This fact does not appear to be strenuously disputed. See Newark's undated Memorandum in Support of its Motion to Dismiss at p. 12; Newark's undated Reply Memorandum in Support of its Motion for Summary Judgment at p. 17. Newark does, however, take issue with any assertion that coverage was extended thereafter. See Part II(C)(2), infra. 12. Newark focuses exclusively on the Virgin Islands action in seeking dismissal of the coverage claims of Gal and Lazare. There are two reasons for this. First, itis undisputed that Newark's insurance policy named only Laga, which operated no facility in New York. The Newark policy therefore does not cover the Wellsville pollution. Second, the claims of derivative liability asserted by the State of New York against Gal and Lazare as former shareholders of Panex were recently dismissed by Judge Elfvin. Judge Elfvin held that the claims, which were founded upon the "trust fund" doctrine that allows creditors of an insolvent corporation to pursue distributees of its assets, were barred by the Delaware dissolution statute. State of New York v. Panex Industries, Inc., No. 94 Cv 0400E(H), 1997 WL 805419 (W.D.N.Y. Oct. 6, 1997), *3. Accordingly, no claim presently exists against Gal and Lazare in the Wellsville action. 13. I am halfheartedly urged by the Duplan Defendants to apply Virgin Islands law to interpretation of the Newark policy because that policy covered only Virgin Islands risks for a Virgin Islands corporation and was allegedly procured through a Virgin Islands broker. Based on these facts, the Duplan Defendants argue that New York choice of law principles require application of Virgin Islands law. In the 1995 Opinion, the Court held that New York law applies to the interpretation of the policies then at issue, but Newark's policy was not among them. The Court has not yet had occasion to determine which jurisdiction's law applies to the Newark policy. But the Duplan Defendants have not identified, and this Court's independent research has not discovered, any material difference between the substantive law of the Virgin Islands and that of New York with respect to any of the salient issues sub judice. In the absence of a conflict, I will continue to apply the law of the forum state. See 1995 Opinion, 899 F Supp. at 1118 (holding that even if Virgin Islands had most significant contacts with the dispute. New York law would govern because no conflict existed between Virgin Islands and New York law on the operation of the pollution exclusion); see also Commercial Union Ins Co v. Flagship Marine Services, Inc., 1999 WL 639170 (2d Cir. Aug. 24, 1999) (finding it unnecessary to determine which state's law would apply since outcome would be the same under either New York or Florida law). 14. Although the portion of the policy containing the definition of the term "occurrence" has not been located, it appears undisputed that the policy contained this standard definition. 15. At certain points in its papers Newark appears to dispute the Duplan Defendants' present contention that Newark issued primary insurance. The basis for this contention, if it is prevsed, is not apparent and will therefore be disregarded. 16. The confirmation is silent about whether coverage existed during the gap from July 3, 1971 to July 3, 1972. The Duplan Defendants do not submit any evidence referencing coverage for that time period. However, I believe that a reasonable trier of fact that accepts that the policy was in effect from 1969 to 1971, and finds that it was renewed from 1972 to 1973 on the basis of the confirmation, could also permissibly infer that it must have been renewed for the interim period from 1971 to 1972. 17. The Successor Trust alone opposes this motion because as the Court observed above. Gal and Lazare have been dismissed from the New York action. 18. The Successor Trust also opposes this prong of Wausau's motion on the basis that Wausau warved its right to assert this argument as a defense by failing to raise it in its initial disclaimer of coverage. I disagree. Wausau reserved its rights and defenses in connection with any policies it may have issued to Cap-Roc "or any related entity" in a letter to counsel for Duplan dated May 28, 1998, prior to its disclaimer of coverage of the Wellsville claims. See Affidavit of Paul T. Keyser dated May 27, 1999, Ex. B ("Keyser Aff."). 19. It also presented jurisdictional grounds for dismissal that are not relevant here. 20. I am also not persuaded that the motion to dismiss on lost policy grounds constitutes a disclaimer of coverage which has the effect of precluding all defenses not asserted in it under the waiver doctrine. The Duplan Defendants offer no authority for their contention which boils down to this: that by initially denying coverage only on the basis of the insured's failure to prove the existence of a policy, an insurer thereby waives all other defenses if the policy is subsequently produced or otherwise proven. Asdiscussed supra. It is the insured's burden to prove the existence of coverage under a lost policy. The insurer is not presumed to know whether it issued a policy to an insured or, if it did, the terms and conditions of the policy. It strikes me as manifestly unfair to hold that an insurer abandons all other defenses to a policy when it first challenges a coverage claim only on the ground that no policy has been produced. Newark's motion to dismiss asserted that the Duplan Defendants had failed to prove the existence of coverage because they had not yet produced a copy of the purported policy. It did not undertake to assert certain defenses but not others. Under the circumstances, I am not convinced that Newark legally "abandoned" its other defenses by failing to interpose them, somewhat clairvoyantly, in that motion. 30 ELR 20001 | Environmental Law Reporter | copyright © 1999 | All rights reserved |