Arco v. Travelers Ins. Co., K-88-380 CA4.

• Court: United States District Courts. 6th Circuit. United States District Court (Western District Michigan)
• Citation: 730 F. Supp. 59
• Docket Number: No. K-88-380 CA4.,K-88-380 CA4.
• Parties: ARCO INDUSTRIES CORP., Plaintiff, v. The TRAVELERS INS. CO.; the Travelers Indemnity Co.; Kemper Insurance Co.; (American Motorists Ins. Co.); Consolidated American Ins.; Commercial Union Assurance; (Commercial Union Ins. Co.); the Home Indemnity Co.; Argonaut-Midwest Ins. Co.; Indiana Ins. Co.; CNA Ins. Co.; (American Casualty Co. of Reading, Pa. and Continental Casualty Co.); and ABC Ins. Companies, Defendants.
• Decision Date: 15 August 1989

730 F. Supp. 59

ARCO INDUSTRIES CORP., Plaintiff,
v.
The TRAVELERS INS. CO.; the Travelers Indemnity Co.; Kemper Insurance Co.; (American Motorists Ins. Co.); Consolidated American Ins.; Commercial Union Assurance; (Commercial Union Ins. Co.); the Home Indemnity Co.; Argonaut-Midwest Ins. Co.; Indiana Ins. Co.; CNA Ins. Co.; (American Casualty Co. of Reading, Pa. and Continental Casualty Co.); and ABC Ins. Companies, Defendants.

No. K-88-380 CA4.

United States District Court, W.D. Michigan, S.D.

June 26, 1989.

On Motion for Relief from Judgment August 15, 1989.

730 F. Supp. 60

COPYRIGHT MATERIAL OMITTED

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James Brown, Lansing, Mich., for Arco Industries Corp

Roberts, Betz & Bloss by David Bloss, Grand Rapids, Mich., for Home Indem. Co.

Dickinson, Wright, Moon, Vandusen & Freeman by John M. Lichtenberg, Lansing, Mich., for Travelers Ins. Co.

Miller, Canfield, Paddock & Stone by Michael B. Ortega, Kalamazoo, Mich., for Kemper Ins. Co.

Kitch, Saurbier, Drutchas, Wagner & Kenney by Stephen Kelley, Detroit, Mich., for Indiana Ins. Co.

Kitch, Saurbier, Drutchas, Wagner & Kenney by Stephen Kelley, Detroit, Mich., Thomas Hamilton, Katherine Dedrick, Ronald Ohren, Chicago, Ill., for Argonaut-Midwest Ins. Co.

Schureman, Frakes, Glass & Wulfmeier by Steven Hickey, Detroit, Mich., for Commercial Union Ins. Co.

Drinker, Biddle & Reath by Timothy Russell, Washington, D.C., for American Motorists.

Oosterbaan, York, Cooper & Peterson by John N. Cooper, II, Kalamazoo, Mich., for Consolidated American Ins. Co.

Straub, Seaman & Allen by Drew F. Seaman, St. Joseph, Mich., for CNA Ins. Co.

Drinker, Biddle & Reath by Michael Kubacki, Thomas Schaufelberger, Philadelphia, Pa., for American Motorists Ins. Co.

Hinshaw, Culbertson, Moelmann, Hoban & Fuller by Thomas Hamilton, Katherine Dedrick, Ronald Ohren, Chicago, Ill., for Argonaut-Midwest.

Miller, Canfield, Paddock & Stone by Michael Ortega, Kalamazoo, Mich., for American Motorists Ins. Co.

OPINION

ENSLEN, District Judge.

This matter is before the Court on each defendant's motion to dismiss or for summary judgment. For the reasons stated below, the Court will grant those motions. Because I find that oral argument is unnecessary to resolve the issues presented, plaintiff's motion to consolidate the motions for hearing is denied as moot.

Facts

The plaintiff, Arco Industries Corporation ("Arco") manufactures automotive parts and uses trichloroethylene (TCE) in its manufacturing process. On two occasions in 1976, Arco contracted with Thomas Solvent Corporation to remove used TCE from Arco's facility at Schoolcraft, Michigan. It appears that the chemicals were ultimately stored at the Thermo Chem facility in Muskegon, Michigan. The United States Environmental Protection Agency ("EPA") has discovered a massive level of hazardous waste contamination at the Thermo Chem facility. Pursuant to its authority under the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C. § 9601 et seq., the EPA has begun the process of identifying those responsible for the pollution and of remedying it. On April 3, 1987, the EPA notified Arco that it had been identified as a potentially responsible party

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for the Thermo Chem contamination. The letter, known as a "PRP letter," informed Arco of the extent of its potential liability under CERCLA, and requested that Arco participate in the EPA's remedial investigation and feasibility study. The EPA has also required Arco to provide it with extensive information concerning Arco's dealings with Thomas Solvent and Thermo Chem. No other action has been taken against Arco by the EPA

Arco notified its insurers of the EPA's letter, and requested that they indemnify it for its costs in responding to the EPA's demands. Each insurer declined to provide Arco with a defense. On December 23, 1988, Arco filed this action seeking a declaratory judgment that the insurers are obligated to provide it with a defense in its dealings with the EPA, and that they are obligated to "indemnify" Arco for its costs and attorney fees incurred in responding to the EPA's request for information.

The pending motions raise three issues. First, two defendants argue that they have no liability to defend Arco because their policies lapsed before Arco made the shipments to Thermo Chem. Second, the insurers claim that Arco is collaterally estopped from re-litigating the duty to defend issues presented because a prior action in state court resolved a similar argument against Arco. Finally, the insurers argue that the PRP letter does not trigger their duty to defend because they are only obligated to defend Arco against "suits" and the PRP letter is not a suit.

Standard

In considering a motion for summary judgment, the narrow questions presented to this Court are whether there is "no genuine issue as to any material fact and whether the moving party is entitled to judgment as a matter of law." F.R.Civ. Proc. 56(c). The Court cannot try issues of fact on a Rule 56 motion, but is empowered to determine only whether there are issues to be tried. Gutierrez v. Lynch, 826 F.2d 1534, 1536 (6th Cir.1987); In re Atlas Concrete Pipe Inc., 668 F.2d 905, 908 (6th Cir.1982); In re Atlas Concrete Pipe, Inc., 668 F.2d 905, 908 (6th Cir.1982).

The moving party has a right to summary judgment where that party is able to demonstrate, prior to trial, that the claims of the plaintiff have no factual basis. Celotex Corporation v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). As the Supreme Court held in Celotex, "... the plain language of Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Id. at 322, 106 S.Ct. at 2552, 91 L.Ed.2d at 273. Moreover, the Court must read the allegations of the complaint in the light most favorable to the non-moving party. Windsor v. The Tennessean, 719 F.2d 155, 158 (6th Cir. 1983).

Where, as here, the moving defendants have supported their motion with affidavits and other documents, the plaintiff may not rest on the mere allegations or denials of the pleadings, but "must set forth specific facts showing that there is a genuine issue for trial." F.R.Civ.P. 56(e), Davis v. Robbs, 794 F.2d 1129, 1130 (6th Cir.1986).

The standard for granting a motion for summary judgment is essentially the same as that for granting a motion for a directed verdict. "The judge's inquiry, therefore, unavoidably asks whether reasonable jurors could find by a preponderance of the evidence that the plaintiff is entitled to a verdict...." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The moving party is not entitled to summary judgment where there is sufficient evidence to allow a reasonable jury to return a verdict for the non-moving party. Id. at 246, 106 S.Ct. at 2508, 91 L.Ed.2d at 211-12. "The evidence of the nonmovant is to be believed, and all justifiable inferences are to be drawn in his favor." Id. at 2556, 106 S.Ct. at 2513, 91 L.Ed.2d at 216. With this standard

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in mind, the Court will review the arguments presented by the parties

Discussion

1. American Motorists Insurance Co. ("AMICO"). AMICO contends that Arco has not alleged that any property damage occurred during the AMICO policy terms. Since AMICO's duty to defend is limited to property damage occurring during the policy periods, AMICO contends that it is entitled to summary judgment. Arco contends that AMICO must provide it with a defense because AMICO cannot prove that Arco did not ship TCE to the Thermo Chem site during the relevant period. Because I find that Arco, rather than AMICO, has the burden to establish an occurrence within the policy periods, and because Arco has not met that burden, I will grant AMICO's motion.

The EPA's letter did not identify any specific conduct by Arco that led to Arco's identification as a PRP. Arco has determined that it contracted with Thomas Solvent to remove hazardous wastes from Arco's Schoolcraft, Michigan plant on at least two occasions, March 26, 1976 and June 7, 1976. See Complaint ¶ 9, Exhibits A, B. Arco alleges that, as a result of these shipments, it must participate in the investigation and remediation of the released contaminants. The complaint also alleges that, "Arco understands Thomas Solvent then took waste products from its facility in Schoolcraft, Kalamazoo County, Michigan, to Thermo Chem for processing. Other shipments of waste products (in addition to those identified in Exhibit B ...) may have been picked up from Arco's ... facility and processed by Thermo Chem." Complaint, ¶ 20.

Arco's potential liability allegedly arises from these two 1976 shipments to the Thermo Chem facility. While the complaint alleges that other shipments may have occurred, Arco has produced no evidence indicating that other shipments occurred or that they occurred before 1976. The AMICO policies were in effect from January 1, 1968 to July 1, 1974. These policies provide coverage only for an "occurrence," which they define as "an accident ... which results, during the policy period, in bodily injury or property damage...." See Plaintiff's Exhibit C. Whether one defines an occurrence by the date of shipment, the date of damage to the environment, or the date the damage is discovered, it is obvious that an occurrence cannot happen before the earliest of these dates — the date Arco shipped its TCE to Thermo Chem. The only shipment dates identified by Arco are outside the AMICO policy periods. Arco has failed to provide any evidence that it shipped hazardous waste to the Thermo Chem site during the AMICO policy periods. Arco bears the burden of proof on this issue, and has not carried that burden. American...