Martin Marietta Corp. v. Insurance Co. of North America, B084709

Citation40 Cal.App.4th 1113,47 Cal.Rptr.2d 670
Decision Date05 December 1995
Docket NumberNo. B084709,B084709
CourtCalifornia Court of Appeals
Parties, 64 USLW 2432, 95 Cal. Daily Op. Serv. 9270, 95 Daily Journal D.A.R. 16,097 MARTIN MARIETTA CORPORATION et al., Plaintiffs and Appellants, v. INSURANCE COMPANY OF NORTH AMERICA, Defendant and Respondent.

Hill Wynne Troop & Meisinger, Kirk A. Pasich, Martin D. Katz, and Linda D. Kornfeld, Los Angeles, for Plaintiffs and Appellants.

O'Melveny & Myers, W. Mark Wood, Martin S. Checov, and H. Douglas Galt, Los Angeles, for Defendant and Respondent.

ARMSTRONG, Associate Justice.

This appeal raises an issue regarding the scope of personal injury coverage in a policy of insurance issued to appellants Martin Marietta Corporation, Martin Marietta Carbon, Inc., and Martin Marietta Aluminum ("Martin Marietta") by respondent Insurance Company of North America ("INA"). Specifically, we are asked to determine whether policy language insuring Martin Marietta's liability for "wrongful entry or eviction, or other invasion of the right of private occupancy" provides coverage for specified actions, brought by a variety of governmental entities, which require, or seek to require, Martin Marietta to remediate groundwater and other contamination emanating from landfill and other sites. The trial court granted summary adjudication and judgment in favor of INA, after determining that under the policy there was no potential for coverage for the claims at issue, and that INA had no duty to defend or indemnify Martin Marietta. We reverse the judgment.

Factual and Procedural Summary 1

In this action, Martin Marietta claimed insurance coverage from INA and many other of its liability insurers for actions brought against it by federal and state governmental entities under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. sections 9601 et seq. ("CERCLA"), the Resource, Conservation and Recovery Act, 42 U.S.C. sections 6901 et seq. ("RCRA") and similar statutes and theories. The actions related to the remediation of groundwater and other contamination emanating from a number of landfill and other sites. As to INA, Martin Marietta tendered claims regarding cleanup orders and actions at seven sites: the Dalles, Oregon site; the Goldendale, Washington site; the Green River Disposal site; the Operating Industries, Inc. site; the Seymour Recycling site; the Commercial Oil Services, Inc. site; and the Stringfellow site.

The INA policy at issue covers the period from May 6, 1968 to November 6, 1972, and includes only automobile coverage and the personal injury coverage at issue here. The personal injury coverage provides that "INA will pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay as damages 2 because of personal injury to which this insurance applies...."

Personal injury is defined as "(1) bodily injury, disability, shock, mental anguish and mental injury; (2) false arrest, detention or imprisonment, or malicious prosecution; (3) the publication or utterance of a libel or slander or of other defamatory material, including disparaging statements concerning the condition, value, quality or use of real or personal property, or a publication or utterance in violation of an individual's right of privacy, except when any of this foregoing part (3) arises out of the Named Insured's advertising activities; (4) wrongful entry or eviction, or other invasion of the right of private occupancy; (5) racial or religious discrimination, unless insurance therefor is prohibited by law, not committed by or at the direction of the Named Insured." (Emphasis added.)

INA moved for summary adjudication on the ground that the claims were not "because of personal injury," and that it thus had no duty to defend or indemnify Martin Marietta. Martin Marietta argued that there was a potential for coverage because "personal injury" is defined in the policy to include "wrongful entry or eviction, or other invasion of the right of private occupancy," and that there was thus a duty to defend. Martin Marietta argued, and argues, that under the quoted portion of definition the policy provides coverage for actions based on common law theories of trespass and nuisance, that the governmental actions are based at least in part on those theories, and that the governmental actions include allegations of wrongful entry and of invasions of the right of private occupancy.

With its motion, INA proposed undisputed facts. Martin Marietta did not dispute those facts, but offered additional facts regarding each claim, which were in large part undisputed by INA. We summarize these undisputed facts.

The Dalles, Oregon site

This site is owned by Martin Marietta. In a consent decree, Martin Marietta agreed to take remedial measures proposed by the federal Environmental Protection Agency ("EPA") to clean up groundwater contamination. The EPA and the State of Oregon alleged liability under CERCLA, including allegations that the actions required by the consent decree were necessary to protect the public health and welfare, that businesses and one residence depended on the contaminated groundwater for drinking, and that 14,000 people were served by the groundwater. The consent decree required Martin Marietta to obtain consent of property owners where cleanup work was to be performed. Under the consent decree, the EPA and the State of Oregon agreed to forego claims under CERCLA, the RCRA, and the common law, including common law nuisance.

The Goldendale, Washington site

This site, too, is owned by Martin Marietta. The State of Washington's Department of Ecology discovered groundwater contamination at the facility and ordered Martin Marietta to implement a cleanup plan. The order alleged violation of a state environmental statute designed in part to protect the public health.

The Green River Disposal site

This is a landfill site, regarding which Martin Marietta is subject to an EPA order alleging CERCLA liability and ordering remediation of contamination of a creek and of groundwater, in part to protect the public from endangerment. The EPA order referred to migration of contaminants and to the presence of arsenic in a near-by well, and alleged that 2,600 people lived within a three mile radius of the site and that there was a significant threat of individual contact with contaminants. Martin Marietta was ordered to conduct a well survey which would include the landowner's identity and the landowner's comments regarding water taste and odor, to supply an acceptable alternate supply of drinking water to all adversely impacted parties, and to obtain site access agreements from the owners of land subject to cleanup.

The Operating Industries, Inc. site

This site is also a landfill. Under a consent decree with the EPA, Martin Marietta and others agreed to construct and maintain a leachate treatment system on this site. The EPA alleged that the actions required of Martin Marietta were necessary to protect the public welfare. The EPA also alleged the off-site migration of contaminants, that the release of hazardous substances from the site posed a threat to human health; that there were several residences adjacent to the site, 53,000 residences within a three-mile radius of the site, and several businesses on or near the site; and that methane levels exceeded the lower exposure limit in nearby residential areas. Martin Marietta was ordered to use good faith efforts to obtain access agreements from persons who had control over the property where work was to be performed.

The Seymour Recycling site

Regarding this site, the EPA filed a complaint alleging imminent and substantial endangerment to human health and welfare due to groundwater contamination. Martin Marietta agreed to be bound by a consent decree requiring it to seal and abandon wells, including approximately 100 residential and business wells, to impose deed restrictions and other enforceable instruments restricting private residential or commercial use of property on or surrounding the site, to conduct a survey of residences and businesses in the site area to determine if the owners wished to have a well on the property sealed, and to seal all wells for which it had the owner's permission. In return, the United States and the state government agreed not to sue under CERCLA, the RCRA, or common law theories.

The Commercial Oil Services, Inc. site

The EPA notified Martin Marietta that it might be liable for cleanup of this site, alleging liability under CERCLA. The EPA alleged that three lagoons at the site were contaminated with PCBs, oil, and sludge, so that rainfall could result in those contaminants spilling into a nearby creek and into Lake Erie.

The Stringfellow site

In the action regarding this site, the EPA and the State of California sued under CERCLA, the RCRA, common law protections of the public health, safety, and welfare and of the state's natural resources, and a number of California statutes. Those statutes included Health and Safety Code section 205, which authorizes the Department of Health Services to, inter alia, commence and maintain actions to abate nuisance, and Civil Code sections 3479--3496, concerning actions for nuisance. The Montrose Chemical Corporation, sued in the action, brought a third party complaint against Martin Marietta, incorporating by reference the government's claims and seeking contribution and indemnity.

As to this site, Martin Marietta also proposed as an undisputed fact that an individual and an organization called Concerned Neighbors in Action filed a complaint in intervention alleging nuisance and seeking relief under CERCLA, the RCRA, and common law theories. 3 INA disputed the fact, citing in support the order granting Concerned Neighbors leave to intervene, which INA contends allowed intervention "only for the purpose of...

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