Figgie Intern., Inc. v. Bailey
| Decision Date | 29 June 1994 |
| Docket Number | No. 93-4845,93-4845 |
| Citation | 25 F.3d 1267 |
| Parties | , 29 Fed.R.Serv.3d 718, 24 Envtl. L. Rep. 21,329 FIGGIE INTERNATIONAL, INC., Plaintiff-Appellant, v. Fred W. BAILEY, James Upfield, Travelers Ins. Co., and Insurance Co. of North America, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Sidney L. Shushan, Guste, Barnett & Shushan, New Orleans, LA, for appellant.
James Robertson, Dennis M. Flannery, John R. Read, Warren O. Asher, Juanita A. Crowley, Wilmer, Cutler & Pickering, Washington, DC, Richard C. Stanley, Laurie B. Halpern, Stone, Pigman, Walther, Wittmann & Hutchinson, New Orleans, LA, for Ins. Co. of North America.
G. Dennis Sullivan, Allison A. Jones, William O. Holston, Jr., Sullivan, Ave & Holston, Dallas, TX, for Bailey & Upfield.
Ralph S. Hubbard, III, Gordon P. Wilson, Lugenbuhl, Burke, Wheaton, Peck & Rankin, L.C., New Orleans, LA, for Travelers Ins. Co.
Appeals from the United States District Court for the Western District of Louisiana.
Before POLITZ, Chief Judge, DAVIS and WIENER, Circuit Judges.
Plaintiff-Appellant Figgie International, Inc. ("Figgie") appeals the summary judgment dismissal of Defendants-Appellees Travelers Insurance Company ("Travelers") and Insurance Company of North America ("INA")--collectively, "the insurers"--from an action brought to recover the costs of a remedial action undertaken on property that Figgie formerly owned. Figgie also appeals the summary judgment dismissal of the claims it asserted against Defendants-Appellees Fred W. Bailey and James Upfield purportedly grounded in the Louisiana Environmental Quality Act ("LEQA"). 1 Concluding for the reasons hereinafter explained that the district court's dismissals were proper, we affirm.
In October 1965, Baifield Industries, Inc. ("Baifield") acquired property in Caddo Parish, Louisiana (hereafter, "the Figgie property") upon which it built two manufacturing facilities--a bomb-fin plant and a shell-casing plant. In June 1967, Baifield sold the property to Figgie which continued to operate the plants until 1969. In September 1969, Figgie sold the property to Norris Industries ("Norris"), agreeing as part of the sales contract to indemnify Norris for "all damages arising out of the prior conduct of [Figgie's] business." 2 During the period that it owned the property, Figgie was covered by a number of comprehensive general liability ("CGL") policies issued by the insurers.
As a byproduct of Baifield and Figgie's manufacturing activities, liquid wastes containing hazardous substances were generated. Following chemical treatment, these liquid wastes were discharged into two sedimentation ponds located on the Figgie property. In the mid-1980s, the Louisiana Department of Environmental Quality ("LDEQ") determined that hazardous substances had been discharged or disposed of on the Figgie property. In 1986, pursuant to its authority under the LEQA, the LDEQ made written demand on Norris to undertake remedial action on the Figgie property. Norris promptly notified Figgie of the LDEQ's remediation demand, but initially undertook the remedial action on its own.
The remedial action proceeded in two stages. During the first stage, soil and sediment was removed from a concrete trench that had been used to convey the liquid waste from the manufacturing facilities to the chemical-treatment area. In addition, soil was excavated from the area around an inactive incinerator where chemicals had been stored. 3 In the second stage, the chemical-treatment area, an additional portion of the concrete trench, and the two sedimentation ponds were subjected to remediation. That remedial action consisted of draining the ponds and excavating the mixture of soil and sludge that had accumulated on the bottom. This soil/sludge mixture was determined to be contaminated with cadmium, a hazardous substance, and then was transported to a disposal facility. Neither Norris nor the LDEQ conducted any groundwater testing in connection with the remedial action.
Following completion of the first stage, and in response to a request by Norris, the LDEQ made written demand on Figgie to undertake remedial action on the Figgie property. Figgie promptly notified the insurers of the LDEQ's remediation demand. Figgie then collaborated with Norris in the second stage of the remedial action, agreeing to share the costs. In October 1989, following completion of the remedial action, Norris brought suit against Figgie, seeking reimbursement for its full remediation costs. Figgie notified the insurers of Norris' lawsuit and requested that the insurers assume its defense. Both insurers declined, asserting that Norris' claims were not covered by their respective policies. Eventually, Figgie and Norris settled, with Figgie agreeing to reimburse Norris for its full remediation costs and promising to pay for future remediation of the Figgie property.
In August 1990, Figgie made written demand on Bailey and Upfield--who were shareholders, officers, and directors of Baifield at the time that it owned the property--for reimbursement of the money that Figgie had paid to Norris. Three days later, Figgie filed the instant suit against Bailey, Upfield, and the insurers. Figgie alleged causes of action against Bailey and Upfield pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA") 4 and the LEQA. In addition, Figgie alleged that the insurers were obligated under their CGL policies to indemnify Figgie for the remediation costs it incurred.
Bailey and Upfield moved for partial summary judgment, seeking dismissal of the LEQA claims on the ground that the LEQA did not authorize a private action against them. The insurers also moved for summary judgment, seeking dismissal of Figgie's claims against them on the ground that their policies excluded coverage of Figgie's remediation costs. The district court referred the summary judgment motions to a magistrate judge who set September 1991 as the deadline for summary judgment briefing. Following expiration of the deadline, the magistrate judge exercised his discretion and admitted numerous additional affidavits and memoranda. After reviewing all the summary judgment submissions, the magistrate judge recommended that summary judgments be granted, dismissing the LEQA claims against Bailey and Upfield, and dismissing all claims against the insurers.
Figgie timely objected to the magistrate judge's report and recommendations. In addition, Figgie sought leave of the district judge to file an additional affidavit in opposition to summary judgment, but the district judge declined to admit the additional affidavit. Adopting the magistrate judge's report and recommendations, the district judge granted summary judgment in favor of the insurers and dismissed the LEQA claims against Bailey and Upfield. As other claims against Bailey and Upfield remained pending, final judgment was entered pursuant to Fed.R.Civ.P. 54(b), and Figgie timely appealed.
The grant of a motion for summary judgment is reviewed de novo, using the same criteria employed by the district court. 5 Summary judgment is proper if "there is no genuine issue as to any material fact" and the movant "is entitled to judgment as a matter of law." 6 When a properly supported motion for summary judgment is made, the adverse party may not rest upon the mere allegations or denials of its pleadings, but must set forth specific facts showing that there is a genuine issue for trial to avoid the granting of the motion for summary judgment. 7
Figgie's LEQA claims were dismissed by the district court when it concluded that the LEQA did not provide a cause of action against Upfield and Bailey. We agree with that conclusion. The LEQA provides that when a determination is made that "a discharge or disposal of a hazardous substance has occurred or is about to occur which may present an imminent and substantial endangerment to health or the environment," the LDEQ secretary shall make written demand on all responsible persons to undertake remedial action in accordance with a plan approved by the LDEQ secretary. 8 Further, if making written demand upon all the responsible persons is not feasible, the LDEQ secretary "may limit his demand to those persons he deems most responsible." 9 At the time that Figgie filed suit, the LEQA provided that parties who had complied with the LDEQ secretary's written demand, i.e., the "participating parties," 10 could bring suit against "any other nonparticipating party who shall be liable for twice their portion of the remedial costs." 11 The LEQA defines a "nonparticipating party" as "a person who refuses to comply with the demand of the secretary, or fails to respond to the demand, or against whom a suit has been filed by the secretary." 12 By the plain terms of the statute, then, the LEQA authorizes a suit by one responsible party against another responsible party only if the LDEQ secretary has made written demand upon the latter party to undertake remedial action or if the LDEQ secretary has filed suit against that party. As it is undisputed that the LDEQ secretary neither made written demand on Bailey or Upfield, nor filed suit against them, summary dismissal of Figgie's LEQA claims was appropriate. 13
At issue in this appeal is the extent of coverage, if any, of the cost of Figgie's remediation actions provided under the CGL policies issued by Travelers or INA. With minor variations, these CGL policies provide coverage for all sums Figgie becomes "legally obligated to pay as damages because of ... property damage to which [the] insurance applies." 14 All of the policies include "owned-property" exclusions which provide, with minor variations, that the policies do not apply "to property damage to ... property owned ... by the insured." Complementing those...
To continue reading
Request your trial
-
Reliance Ins. Co. v. Armstrong World Industries, Inc.
...use" doctrine it "is not a matter of legal title," and therefore could not be "owned" by the insured); Figgie Int'l, Inc. v. Bailey, 25 F.3d 1267, 1271 (5th Cir.1994) (based on the insured's failure, in connection with a coverage action, to establish actual contamination of groundwater unde......
-
Aetna Ins. Co. v. Aaron
...v. Quinn Constr. Co., 713 F.Supp. 35, 39-41 (D.Mass.1989). The results are by no means uniform or consistent. Figgie Int'l, Inc. v. Bailey, 25 F.3d 1267, 1273-74 (5th Cir.1994). See New Jersey v. Signo Trading Int'l, Inc., 130 N.J. 51, 612 A.2d 932 (1992). Compare Continental Ins. Cos. v. N......
-
Norfolk Southern Corporation v. California Union Insurance Company
...damage to the insured's property were not covered. Intel Corp., 952 F.2d at 1566; Figgie International, Inc. v. Bailey, 25 F.3d 1267, 1273-1274 (5th Cir. 6/29/94).52 Other courts, however, have determined that the owned property exclusion does operate to preclude recovery for costs expended......
-
American States Ins. Co. v. Hanson Industries
...in most modern commercial liability insurance policies and have been the subject of considerable litigation. See Figgie Int'l, Inc. v. Bailey, 25 F.3d 1267, 1270 (5th Cir.1994); Reliance Ins. Co. v. Povia-Ballantine Corp., 738 F.Supp. 523, 525 (S.D.Ga.1990); Taylor-Morley-Simon, Inc. v. Mic......