Highest State Court in Wisconsin Upholds Asbestos Exclusion

In this matter, plaintiffs purchased a building from seller-defendants who failed to disclose the building’s heating ducts likely contained asbestos.  The plaintiffs eventually lost the building in foreclosure after evacuating the entire building and being unable to finance the building.

The preceding court held that the insurer had no duty to defend or indemnify the seller-defendants because the matter fell squarely within the asbestos exclusion.  Stating that the policy required “a causal relationship between the loss and the asbestos” in order for the exclusion to …

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Environmental Testing Costs Not Part Of Indemnity Agreement

This environmental action involves the interpretation of the scope of an indemnity agreement involving the costs of environmental testing on property contaminated with percholorethylene (PCE) in a real property transaction.

Cadlerocks entered into a loan in the principal amount of $1,925,000.  The note was secured by a mortgage, along with a separate Environmental Indemnity Agreement.  Cadlerocks failed to make the payment on the balloon balance due on the note and defaulted on the note causing the Trust to commence foreclosure proceedings.

The original lender conducted …

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Court Intervenes To Stay Arbitration Before Final Award

This arbitration/reinsurance action arises from the plaintiff’s request for injunctive relief to enjoin further arbitration proceedings as a result of questions concerning the potential breach of a provision in the reinsurance contract between the parties that required that disputes be submitted to three arbitrators who are not under the control of any party to the agreement.

Specifically, plaintiffs contended that this provision was breached when defendant counsel participated in prohibited ex parte communications with a member of the arbitration panel. The plaintiffs also maintained this …

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No Coverage Available For Lead Paint Related Injuries

This coverage action arises from a dispute regarding the applicability of a total pollution exclusion contained in a commercial general liability policy.  The insurer, Cumberland, relied on the exclusion in denying coverage for a suit involving alleged negligent removal of lead paint from a residence causing injury to a child.  The plaintiff asserted that the subject total pollution exclusion does not apply to lead-based injuries that are not traditional environmental contamination.

Cumberland denied coverage for the underlying suit based on the total pollution exclusion advising …

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Insurer’s Environmental Subrogation Claims Under CERCLA §107(a) Dismissed

Chartis Specialty Ins. Co. v. United States Of America
(U.S.D.C. Northern District of California, July 19, 2013)

This environmental coverage action arises from a dispute as to whether an insurer can maintain an action under CERCLA’s subrogation provisions against the United States government where it is alleged the government is responsible for environmental contamination at a site in which the plaintiffs have been paying clean-up costs.  Specifically, the plaintiffs, Whittaker Corporation, and its insurer, Chartis, brought claims under §107(a) of CERCLA seeking to recover all …

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Injury-In-Fact Trigger Applied In Alabama Manufactured Gas Contamination Suit

Alabama Gas Corp. v. Travelers Cas. & Surety Co.
(U.S.D.C. Northern District of Alabama, July 16, 2013)

This environmental coverage action arises from a dispute as to whether the insurer’s multiple policies provided indemnity for past environmental contamination at a former manufactured gas plant prior to being redeveloped as low income housing.

Specifically, the Huntsville Gas Light Company, which incorporated in 1856, provided manufactured gas from various sources to customers until 1946.  In 1946, the Huntsville facility was converted to a propane air system …

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Pollution Policy’s Late Notice Requirement In Buy-Back Provision Upheld Regardless Of Prejudice

Starr Indemnity & Liability Co. v. SGS Petroleum Service Corp.
(5th Cir., June 18, 2013)

This environmental coverage action arises from a dispute on as to the notice provision involving a pollution occurrence and whether the policyholder was required to show prejudice before denying coverage as required by a pollution buy-back provision in the policy.

Specifically, Starr’s excess coverage policy contained an absolute pollution exclusion clause.  However, the parties negotiated a buy-back provision which deleted the original pollution exclusion and replaced it with a …

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Transfer of PCB-Laden Oil From Tanker To Holding Tank Does Not Trigger A “Pollution Condition” Under The Policy

Colonial Oil Industries, Inc. v. Indian Harbor Ins. Co.
(Second Cir., June 25, 2013)

This environmental coverage action arises from an alleged breach of a duty to defend and indemnify the policyholder resulting from costs associated with the transfer of contaminated fuel oil.

Specifically, the policyholder is a company whose business involves the transportation, storage and sale of fuel oil.  In the course of its business, Colonial received a large delivery of oil from a third-party distributor that unknowingly contained polychlorinated biphenyl (PCB’s) and that …

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Fourth Circuit Finds Arsenic and Lead Contamination Subject to Absolute Pollution Exclusion

Ross Development Corporation v. Fireman’s Fund Insurance Company, et al. (Index No. 12-2059) (June 6, 2013)

On appeal from the U.S. District of South Carolina, the Fourth Circuit affirmed the court’s ruling that the insurer’s had no duty to defend or indemnify a CERCLA action brought against the insured due to the absolute pollution exclusion in the policies.

Specifically, the parties debated whether, and how quickly, arsenic and lead leached into surrounding soils and when this contamination migrated to and damaged surrounding properties.  The policies …

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Air Pollution at Louisiana Big Cajun II Facility Prompts Duty to Defend

Louisiana Generating LLC v. Illinois Union Ins. Co.
United States Court of Appeals for the Fifth Circuit, May 15, 2013

Louisiana Generating LLC (LAGen) sought defense coverage from Illinois Union Ins. Co. (Illinois) in a suit brought against it by the EPA and the Louisiana Department of Environmental Quality for Clean Air Act and state environmental law violations. LAGen owns a coal-fired electric steam generating plant known as the Big Cajun II in Louisiana. In 2009, NRG, LAGen’s parent company, purchased a custom Premises Pollution …

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