64 F.3d 1015 (6th Cir. 1995), 93-2309, Harrow Products, Inc. v. Liberty Mut. Ins. Co.

Docket Nº:93-2309, 94-1335.
Citation:64 F.3d 1015
Party Name:HARROW PRODUCTS, INC., a Delaware corporation; Leigh Products, Inc., a former Delaware corporation; and Universal Gerwin, a division of Harrow Products, Inc., Plaintiffs-Appellants, v. LIBERTY MUTUAL INSURANCE COMPANY; Insurance Company of North America; Continental Insurance Company; American Insurance Company; and New England Insurance Company, D
Case Date:September 12, 1995
Court:United States Courts of Appeals, Court of Appeals for the Sixth Circuit

Page 1015

64 F.3d 1015 (6th Cir. 1995)

HARROW PRODUCTS, INC., a Delaware corporation; Leigh

Products, Inc., a former Delaware corporation;

and Universal Gerwin, a division of

Harrow Products, Inc.,




North America; Continental Insurance Company;

American Insurance Company; and New

England Insurance Company,


Nos. 93-2309, 94-1335.

United States Court of Appeals, Sixth Circuit

September 12, 1995

Argued May 8, 1995.

Rehearing and Suggestion for Rehearing En Banc Denied Oct. 26, 1995.

Page 1016

[Copyrighted Material Omitted]

Page 1017

Peter Smit, Michael Frederick Kelly (argued and briefed), Varnum, Riddering, Schmidt & Howlett, Grand Rapids, MI, for plaintiffs-appellants.

Mary E. Rugala, Walter A. Stewart (argued and briefed), Manta & Welge, Philadelphia, PA, for Liberty Mutual Insurance Company defendant-appellee.

Gary L. Stec, Harvey, Kruse, Westen & Milan, Grand Rapids, MI, Paul R. Koepff, Mudge, Rose, Guthrie, Alexander & Ferdon, Parsippany, NJ, Joseph E. Boury (argued and briefed), O'Melveny & Meyers, Newark, NJ, for Insurance Company of North America defendant-appellee.

Charles W. Royer, Frances A. Rosinski, Robert E. Graziani (briefed), Timmis & Inman, Detroit, MI, for Continental Insurance Company.

Janet Callahan Barnes, Thomas D. Allen (briefed), Jennifer N. Pahre, Kohl, Secrest, Wardle, Lynch, Clark & Hampton, Farmington Hills, MI, for American Insurance Company.

Harold E. Fischer, Jr., J. Richardson Johnson, Early, Lennon, Peters & Crocker, Kalamazoo, MI, Ignatius John Melito (briefed), Amy Gallent, Siff, Rosen & Parker, New York City, for New England Insurance Company.

Laura A. Foggan (briefed), Wiley, Rein & Fielding, Washington, DC, amicus curiae Insurance Environmental Litigation Association.

R. Mark Keenan, James Hanson (briefed), Anderson, Kill, Olick & Oshinsky, New York City, amicus curiae Mid-American Legal Foundation.

Before BOGGS and NORRIS, Circuit Judges; and SPIEGEL, District Judge. [*]

BOGGS, Circuit Judge.

Plaintiffs-appellants Harrow Products, Inc., Leigh Products, Inc., and Universal Gerwin (collectively referred to as "Harrow") appeal the denial of their motions for summary judgment, and the granting of motions for summary judgment in favor of the defendants-appellees Liberty Mutual Insurance Company, Insurance Company of North America, Continental Insurance Company, American Insurance Company, and New England Insurance Company ("Appellees"). In granting Appellees' motion, the district court concluded that the Appellees did not have a duty to defend Harrow in various underlying actions. For the reasons set out below, we affirm in part and reverse in part.


The Appellees are insurance companies that provided various degrees of coverage to Harrow. Harrow owned and operated a manufacturing plant in Saranac, Michigan from the mid-1940's to 1985. The Village of Saranac, a plaintiff in an underlying action, relied on wells, apparently located near the Harrow plant, for its water supply.

In September 1982, Harrow learned that the Village found contaminants, including trichloroethylene ("TCE"), in the wells. The Michigan Department of Natural Resources ("MDNR") conducted an investigation. Harrow cooperated by permitting monitoring wells to be installed on its property. On February 27, 1985, Harrow received a letter from the MDNR stating that Harrow was the suspected source of the contamination.

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On March 1, 1985, Harrow notified its primary comprehensive liability insurer, Liberty Mutual Insurance Company, of the potential claim arising out of the MDNR administrative action. The Liberty Mutual policy provided defense and indemnification coverage for bodily injury, property damage and personal injury. The limits were $500,000 for bodily and personal injury, and $100,000 for property damage.

Liberty Mutual initially defended Harrow before the MDNR. On January 21, 1987, the MDNR sent Harrow a letter declaring that Harrow's plant was the source of contamination and alleging that Harrow had violated the Water Resources Commission Act, M.S.A. Sec. 3.521 et seq. The MDNR requested a remediation plan. While Liberty Mutual initially continued its defense of Harrow, on March 23, 1989, Liberty Mutual denied further coverage based on the policy's "pollution exclusion." This exclusion reads:

This policy does not apply:


(f) to bodily injury or property damage arising out of the discharge, dispersal, release or escape of smoke, vapors, soot, fumes, acids, alkalis, 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 ....

(emphasis added).

Harrow also notified New England Insurance Company, Continental Insurance Company, American Insurance Company, and Insurance Company of North America, its excess liability insurance carriers, of its troubles in December 1988 and January 1989. 1

On October 19, 1989, the Village of Saranac sued Harrow in the United States District Court for the Western District of Michigan, seeking damages and recovery of response costs under CERCLA and the Michigan Environmental Protection Act ("MEPA"). Liberty Mutual and the excess carriers again refused to assume Harrow's defense. On September 13, 1990, Harrow brought two separate suits alleging that the Appellees had the duty to defend and indemnify Harrow in both a civil suit and a state administrative action. Harrow sought defense and indemnification under the "property damage" and "personal injury" coverage provided by Liberty Mutual and the other insurance companies for both the civil suit and administrative action. The district court consolidated the two cases on April 8, 1991. On January 21, 1991, the Village of Saranac dismissed its claims in the underlying action after the parties settled for $475,000.

Harrow and the Appellees subsequently filed cross-motions for summary judgment. On August 30, 1993, the district court issued its opinion and judgment. Harrow Products, Inc. v. Liberty Mut. Ins. Co., 833 F.Supp. 1239 (W.D.Mich.1993). The court denied Harrow's motion for partial summary judgment on the duty to indemnify stemming from the property damage clauses and granted Appellees' corresponding motion in light of the pollution exclusion. However, the court did hold that Liberty Mutual had a limited duty to defend Harrow under the property damage coverage in the civil suit, unless Liberty Mutual was prejudiced by Harrow's purported untimely notice. The district court set this issue for trial.

The district court also denied Harrow's motion for summary judgment regarding the duty to defend and the duty to indemnify under the personal injury clauses. The court granted Appellees' corresponding motion. Finally, the court also concluded that there was no coverage in the administrative action because it did not constitute a "suit" as required by the insurance policies. Harrow filed a notice of appeal September 28, 1993 (No. 93-2309).

Harrow and Liberty Mutual settled the portion of the case related to the untimely notice. The district court entered its final order February 28, 1994. Harrow filed another notice of appeal on March 23, 1994 (No.

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94-1335). This court consolidated the two appeals on April 8, 1994.

Harrow raises various claims in its appeal of the district court's grant of summary judgment. As to the property damage clauses, Harrow maintains that the TCE discharge was "sudden and accidental" and that this was a question of fact that was inappropriate for the district court to dispose of through summary judgment. Harrow also claims that certain missing policies entitle it to coverage because they did not contain pollution exclusions. In an attempt to evade the pollution exclusion, Harrow argues that it does not apply to the "personal injury endorsement," and that the personal injury clause covers the claims alleged here. Finally, Harrow maintains that the state administrative action did constitute a "suit" as required for coverage under the policies.


This court reviews de novo the district court's grant of Appellees' motion for summary judgment. Baggs v. Eagle-Picher Indus., Inc., 957 F.2d 268, 271 (6th Cir.), cert. denied, --- U.S. ----, 113 S.Ct. 466, 121 L.Ed.2d 374 (1992). This court must affirm the district court only if it determines that the pleadings, affidavits, and other submissions show "that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). When evaluating this appeal, this court must view the evidence in the light most favorable to the non-moving party. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986).

The moving party need not support its motion with evidence disproving the nonmoving party's claim, but must only " 'show[ ]'--that is, point[ ] out to the district court--that there is an absence of evidence to support the nonmoving party's case." Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 2554, 91 L.Ed.2d 265 (1986). The pivotal question is whether the party bearing the burden of proof has presented a jury question as to each element of its case. Celotex, 477 U.S. at 322, 106 S.Ct. at 2552. The plaintiff must present more than a mere scintilla of evidence in support of his position; the plaintiff must present "evidence on which the jury could reasonably find for the plaintiff." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 2512, 91 L.Ed.2d 202 (1986). "The 'mere possibility' of a factual dispute is not enough." Mitchell v. Toledo Hosp., 964...

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