Chemical Applications Co. v. Home Indemnity Co., Civ. A. No. 73-248-G.
Decision Date | 27 January 1977 |
Docket Number | Civ. A. No. 73-248-G. |
Citation | 425 F. Supp. 777 |
Parties | CHEMICAL APPLICATIONS COMPANY, INC., Plaintiff, v. The HOME INDEMNITY COMPANY, Defendant. |
Court | U.S. District Court — District of Massachusetts |
Richard A. Dempsey, Glynn & Dempsey, Boston, Mass., for plaintiff.
Robert W. Cornell, Cornell & Gollub, Boston, Mass., for defendant.
The facts were stipulated,2 and so, apparently, is the correctness of plaintiff's contention that such loss constitutes "property damage" within the terms of the policy. There is no contrary contention in defendant's brief, and I so find, given the general purpose of the policy and the basic rule that terms are to be construed in favor of the insured. Transamerica Ins. Co. v. Norfolk & Dedham Mut. Fire Ins. Co., 1972, 361 Mass. 144, 147, 279 N.E.2d 686. The statutory liability is in no real sense a penalty, but is precisely measured in terms of the damage caused by the spill.
The only asserted defense is defendant's complaint that plaintiff, who was qualified to do so, did oil removal and cleanup work itself instead of permitting the government to have it done by others and bring suit. Plaintiff's costs, $31,619, which are just within the policy limit, are stipulated. It is further agreed that this figure includes nothing for overhead or profit, and that it was apparent at all times that, if others did the work, the charges against plaintiff would have substantially exceeded the policy limit.
In terms, and concept, this imposes a duty on plaintiff to take steps to prevent further injury — to correct the fault — not to repair or restore what has already occurred. If the insured had to repair at its own expense the damage that had already occurred, the policy would be meaningless.
More complicated, but I hold equally meritless on the facts in this case, is defendant's invocation of two other policy provisions.
Strictly, this last is where the case begins. Plaintiff did notify defendant of the emergency. It also asked defendant to advance funds for it to do the work itself, which, because of the magnitude and its own limited resources, it would not be able to complete without financial help. Defendant made no response. In light of heavy government and public pressure to attack the spill promptly, plaintiff went to work as fast as its resources permitted. Defendant continued to make no response. Not until a month after the accident did it state its position — that not only would it refuse to advance funds (a matter plaintiff does not now press), but that, because of the aforesaid policy provisions, it would deny all liability for any work that plaintiff did itself. By that time plaintiff's resources were sufficiently drained that it could not proceed with the work fast enough to satisfy the government, and, although plaintiff continued to do some of the work, the government employed third parties to do the balance. The cost of the latter is not involved in this action.
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