EnergyNorth Natural Gas, Inc. v. Continental Insurance Co.

No. 98-735 (N.H. March 21, 2001)

ELR Digest

The court holds that a manufactured gas plant operator was not entitled to coverage for cleanup costs it incurred in connection with a contaminated area near the Merrimack River in New Hampshire because the contamination caused by the operator was not accidental as required by its insurance policies. New Hampshire case law defines "accident" to exclude inherently injurious acts, notwithstanding what the insured may have subjectively intended or known about the consequences of those acts. Thus, the court first holds that the trial court did not err in applying the inherently injurious analysis to the conduct at issue even though the operator's conduct, at the time it took place, was both lawful and conformed to widely accepted industry standards and practices. The court next holds that courts must focus on two inquiries in determining whether the act is not an accident under the inherently injurious standard. The first inquiry, which was not at issue in this case, is subjective and asks whether the insured actually intended to cause the resulting injury. The second inquiry asks whether the intentional act was so inherently injurious that it cannot be performed without a certainty that some injury will result. In making this second inquiry, the test is objective and should be conducted from the standpoint of a reasonable person in the position of the insured. Therefore, the court further holds that the trial court did not err in conducting the inherently injurious analysis from the perspective of a reasonable company rather than from the perspective of the insured. The court then holds that the trial court did not err in finding the operator's conduct to be inherently injurious. A reasonable company in the operator's position would have known that its intentional discharge of toxic waste into a body of water was certain to contaminate that water.

The full text of this decision is available from ELR (7 pp., ELR Order No. L-349).

Counsel for Plaintiff
Bruce W. Felmly
McLane, Graf, Raulerson & Middleton
City Hall Plaza
900 Elm St., Manchester NH 03105
(603) 625-6464

Counsel for Defendant
Michael F. Aylward
Morrison, Mahoney & Miller
250 Summer St., Boston MA 02210
(617) 439-7500

[31 ELR 20503]

[OPINION OMITTED BY PUBLISHER IN ORIGINAL SOURCE]