Aetna Cas. and Sur. Co. v. General Dynamics Corp.

Decision Date23 January 1991
Docket NumberNo. 88-2220C (A).,88-2220C (A).
PartiesAETNA CASUALTY AND SURETY COMPANY, Plaintiff, v. GENERAL DYNAMICS CORPORATION, Defendant.
CourtU.S. District Court — Eastern District of Missouri

COPYRIGHT MATERIAL OMITTED

Miller, Cassidy, Larroca & Lewin, James E. Rocap, III, Niki Kuckes, Washington, D.C., Kohn, Shands, Elbert, Gianoulakis & Giljum, Robert T. Haar, St. Louis, Mo., for plaintiff.

Coburn, Croft & Putzell, Thomas E. Douglass, Timothy F. Noelker, John G. Simon, Michael B. Minton, St. Louis, Mo., Spencer, Fane, Britt & Brownw, James T. Price, Terry Schackmann, Kansas City, Mo., for defendant.

MEMORANDUM AND ORDER

HARPER, District Judge.

This matter is before the Court upon the motion of plaintiff, Aetna Casualty and Surety Company, for entry of summary judgment as to all remaining claims; and upon the motion of defendant, General Dynamics Corporation, for entry of summary judgment as to its Second Counterclaim.

FACTUAL BACKGROUND

The factual background of this case may be summarized as follows:1 Plaintiff, Aetna Casualty and Surety Company, brought the underlying declaratory judgment action seeking to have the Court declare that it is not liable to defend, pay and/or indemnify defendant, General Dynamics Corporation, under several Commercial General Liability (CGL) insurance policies issued to defendant with respect to liability arising by way of federal statute, state statute and state common law for hazardous waste clean-up and damages to natural resources. Plaintiff contends that the policies do not cover certain claims, demands, notices and suits asserted or to be asserted in the future based on the hazardous waste clean-up and damages to natural resources resulting from the hazardous waste contamination of sixteen sites located in eight states.2 Plaintiff subsequently brought a motion for partial summary judgment arguing that it has no duty to defend or indemnify defendant with respect to claims for costs of the "clean-up" of certain hazardous waste sites under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), 42 U.S.C. § 9601 et seq. Prior to ruling on the motion, this Court determined that plaintiff failed to present a "controversy" within the Article III formulation for the Cordage Park site, the Sylvester site, the Maxey Flats site, the Tucson Airport site, the Quincy Shipyard site and the Norwich Iron and Metal site, the Landfills sites (duty to indemnify only) and the Gary, Indiana site (duty to defend only). This Court held that partial summary judgment was proper with respect to plaintiff's obligation to defend and/or indemnify defendant concerning response costs under CERCLA actions involving the Kansas City site and the Review Avenue site respectively involved in the litigation styled United States v. Conservation Chemical Company, et al., No. 82-0983-CV-W-5 (W.D.Mo.) and The City of New York v. United Technologies Corp., No. 85 Civ. 4665 (EW). Aetna Casualty and Surety Company v. General Dynamics Corp., No. 88-2220C (A) (E.D.Mo. Dec. 12, 1989) (Order granting partial summary judgment). In addition, the Court entered summary judgment for plaintiff concerning its duty to indemnify defendant for CERCLA settlement costs covering the Gary, Indiana site, the Cannons Engineering sites3 basing such decision on the Eighth Circuit's recent ruling in Continental Ins. Co. v. Northeastern Pharmaceutical & Chemical Co., 842 F.2d 977 (8th Cir.), cert. denied, 488 U.S. 821, 109 S.Ct. 66, 102 L.Ed.2d 43 (1988) (hereinafter referred to as NEPCCO). This Court also denied plaintiff's motion regarding its duty to defend defendant in the pending action entitled The City of New York v. Exxon Corp., No. 85 Civ. 1939 (EW), that involved alleged unlawful hazardous waste disposal in the New York City Landfills sites ("Landfills Sites"). Plaintiff later moved for summary judgment on defendant's First Counterclaim which alternatively sought recovery on the basis that plaintiff was obligated to pay defendant's settlement costs involving the Conservation Chemical litigation pursuant to the parties oral settlement agreement allegedly entered into in 1986, and alternatively, on plaintiff's duty to defend defendant under the CGL policy and Interim Defense Agreement entered into by plaintiff and Insurance Company of North America ("INA", a co-insurer of defendant). By our August 24, 1990 Order, plaintiff's motion for summary judgment on defendant's First Counterclaim was granted.

CURRENT MOTIONS FOR SUMMARY JUDGMENT

The parties currently move for summary judgment on all remaining issues: whether plaintiff is obligated to pay expenses incurred by defendant in defending and paying as settlement amounts for state statutory clean-up costs for the New York City Landfills sites, Review Avenue site and the Cannons sites; whether plaintiff is obligated to pay expenses incurred by defendant in defending the action involving the Landfills Sites concerning the CERCLA counts; whether plaintiff is obligated to pay expenses incurred by defendant in defending and paying settlement payments pertaining to state common law actions for the Landfills Sites, the Review Avenue sites and the Cannons Engineering Corp. sites ("Cannons sites"); and, whether plaintiff is obligated to pay expenses incurred by defendant in defending and paying settlement amounts pertaining to state and CERCLA actions for damages to natural resources for the Landfills Sites, the Review Avenue sites and the Cannons sites.

A. SUMMARY JUDGMENT STANDARDS

Under Rule 56 of the Federal Rules of Civil Procedure, a movant is entitled to summary judgment if it can, "show that there is no genuine issue of material fact and that it is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c); see also Poller v. Columbia Broadcasting Sys., Inc., 368 U.S. 464, 82 S.Ct. 486, 7 L.Ed.2d 458 (1962).

The parties have stipulated that there exists no genuine issue of material fact remaining in the instant action. The parties submitted to the Court documentary evidence and a joint stipulation of fact concerning the actions involving the Landfills Sites and the Review Avenue, as well as the Cannons sites. It was only during the briefing of the current cross motions for summary judgment that the Court was informed that the Landfills Sites litigation was settled. In light of such settlement, the Court may now consider the merits of the parties claims that concern the Landfills Sites litigation.4

B. LANDFILLS SITES — CERCLA CLAIMS

As a preliminary matter and in light of our past Orders granting partial summary judgment in favor of plaintiff and holding that NEPCCO controls all decisions with respect to claims for indemnity for response costs incurred and defense costs concerning claims premised on CERCLA, (Memorandums and Orders December 12, 1989 and April 9, 1990), this Court will grant plaintiff's motion for summary judgment concerning its obligation to indemnify and/or pay defendant's defense costs incurred in defense of the Landfills Sites actions concerning CERCLA counts seeking payment of response costs. NEPCCO, 842 F.2d 977 (8th Cir.1988).

C. REMAINING SITES — STATE COMMON LAW AND STATUTORY CLAIMS

Turning to the remaining issues: plaintiff's obligation to pay defense costs and settlement expenses for state statutory and common law claims premised on nuisance, abatement of nuisance, negligence, ultrahazardous activity and statutory nuisance concerning the Landfills Sites, the Review Avenue site, and the Cannons sites.5 In the Landfills Sites action, The City of New York v. Exxon Corp., No. 85 Civ.1939 (EW), defendant was sued by the defendants/third party plaintiffs named in the action by The City of New York ("City"). The third party plaintiffs sought damages premised upon the following relevant causes of action: damages resulting from the continuation of a public nuisance (Count II); damages resulting from the continuation of a statutory nuisance (Count III); damages resulting from activities labeled as ultrahazardous or abnormally dangerous (Count IV); that defendant is obligated to pay damages arising from a finding in the original action that third party plaintiff owed a duty to abate the public nuisance and that the City is entitled to restitution from the third party plaintiff (Count V); damages arising from third party defendant's breach of their duty to exercise reasonable care in generating, transporting and disposing of wastes (Count VI). In the Review Avenue action, The City of New York v. United Technologies Corp., No. 85 Civ. 4665 (EW), defendant was sued by the defendants/third party plaintiffs named in the action by the City. The third party plaintiffs sought damages premised upon the following relevant causes of action: damages resulting from the creation and continuation of a public nuisance (Count IV); damages resulting from the creation a statutory nuisance, § 564.15.0 N.Y.Admin.Code (Count VI); damages resulting from creating an ultrahazardous or abnormally dangerous condition (Count VIII); damages arising from abatement of a public nuisance if the court, in the original action, finds that the third party plaintiffs owe the City the duty to abate and that the City is entitled to restitution (Count X). Defendant was notified, by way of Potentially Responsible Party letters ("PRP letters")6, of its potential liability to the states of Massachusetts and New Hampshire with respect to hazardous waste generation and disposal at the Cannons Sites. The states based this potential liability upon the following authority: Mass. Oil and Hazardous Material Release Prevention and Response Act, M.G.L. c. 21E, § 1 et seq.; Mass. Clean Water Act, M.G.L. c. 21; M.G.L. c. 12, § 11D; and, state common law concerning clean-up costs on the Cannons Engineering Corp.'s Hazardous Materials sites in Bridgewater and Plymouth, Mass.; New Hampshire statutes R.S.A. Chs. 147-A and 147-B (authority to expend state money to clean up...

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