Aetna Casualty & Surety Co. v. Goodyear Tire & Rubber Co.

No. 19121 (Ohio Ct. App. September 20, 2000)

ELR Digest

The court affirms in part and reverses in part a lower court's grant of summary judgment and directed verdicts in favor of numerous insurance carriers from which a tire company sought defense and indemnity coverage for environmental cleanup actions brought against it under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). The CERCLA actions, which the company settled with other potentially responsible parties and the U.S. Environmental Protection Agency, stemmed from environmental contamination caused by the company's and its subsidiaries' waste disposal practices at two disposal sites in Delaware and Michigan.

The court first holds that the lower court did not err in granting directed verdict to the excess insurance carriers. The company failed to establish that its primary coverage would be exhausted and that its excess insurance coverage would attach. The court next holds that directed verdict was properly granted to the primary insurers on all claims stemming from one of the sites because the company's notice to its insurers was untimely. The company notified an insurance broker, yet there was no evidence that any of the insurers had authorized the broker to receive notice on its behalf or that the company believed that the broker was so authorized. Moreover, the company did not notify the broker until 20 months after a state environmental agency notified the company that it would be responsible for cleanup at the site. The court, however, then holds that with respect to the second site, late notice was not a viable basis for a directed verdict for the primary insurers. The primary insurers were notified of the occurrences at the second site less than one month after the company first learned of them. Nevertheless, directed verdict was properly granted to one of the primary insurers because its policies contained "expected or intended" pollution exclusions. There was no valid basis, however, to support a directed verdict on the remaining claims related to the second disposal site. The court, therefore, remands the case with respect to those claims.

The court next holds that the company was not prejudiced by the replacement of the trial judge. The court further holds that contrary to the tire company's assignments of error, the lower court did not err in granting summary judgment to those insurers whose policies included "sudden and accidental" pollution exclusions. The company did not allege that the property damage was caused by a sudden discharge. Rather, the company alleged that the insurers were obligated to defend and indemnify against it certain "environmental actions," which were described as actions brought by private citizens or governmental authorities that allege bodily injury, personal injury, and/or property damage. These allegations do not even arguably bring the company's claims within the sudden and accidental exception to the pollution exclusion.

The full text of this decision is available from ELR (38 pp., ELR Order No. L-280).

[Counsel not available at this printing.]

[31 ELR 20166]

[OPINION OMITTED BY PUBLISHER IN ORIGINAL SOURCE]