Fireman's Fund Ins. Companies v. Ex-Cell-O Corp.
| Decision Date | 14 December 1988 |
| Docket Number | Civ. A. No. 85-71371. |
| Citation | 702 F. Supp. 1317 |
| Parties | FIREMAN'S FUND INSURANCE COMPANIES and American Insurance Company, Plaintiffs, v. EX-CELL-O CORPORATION, et al., Defendants. EX-CELL-O CORPORATION, et al., Third-Party Plaintiffs, v. AIU INSURANCE COMPANY (successor to American International Insurance Company), et al., Third-Party Defendants. |
| Court | U.S. District Court — Western District of Michigan |
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Rivkin, Radler, Dunne & Bayh by Jeffrey Silberfeld, Uniondale, N.Y., for American Ins. Co.
Hill, Lewis, Adams, Goodrich & Tait by Robert B. Webster and Richard C. Sanders, Detroit, Mich., for Ex-Cell-O, McCord Gasket Corp. and Davidson Rubber Co.; Anderson, Russell, Kill & Olick, P.C., Nicholas J. Zoogman, Eugene R. Anderson, Avraham C. Moskowitz and Steven P. Vincent, New York City, of counsel.
Jerome C. Gropman & Associates by Raymond I. Foley, Birmingham, Mich., Robins, Zelle, Larson & Kaplan by Paul L. Gingras and Thomas L. Hamlin, Minneapolis, Minn., for Wausau Ins. Co.
Gofrank & Kelman, Barry M. Kelman, Southfield, Mich., for Travelers; Dickinson, Wright, Moon, Van Dusen & Freeman, H.G. Sparrow, III, Detroit, Mich., of counsel.
Harvey, Kruse, Westen & Milan, P.C. by Paul S. Koczkur, Detroit, Mich., for Integrity Ins. Co., Mission Ins. Co. and Mission Nat.
Simon, Deitch, Tucker & Friedman by Peter B. Kupelian, Southfield, Mich., for Zurich Am. Ins. Co.
Leonard B. Schwartz, Southfield, Mich., for Royal Indem.
Buchalter, Nemer, Fields, Chrystie & Younger by Deborah A. Pitts and Robert A. Zeavin, Los Angeles, Cal., and Kerr, Russell & Weber by James R. Case, Detroit, Mich., for AIU Ins. Co. and Highland Ins. Co.
Charles C. Cheatham, Detroit, Mich., for American Employers Ins. Co.
Sullivan, Ward, Bone, Tyler, Fiott & Asher by David M. Tyler, Detroit, Mich., and Pretzel & Stouffer by Samuel B. Issacson, Chicago, Ill., for Prudential Re-Insurance Co.
Garan, Lucow, Miller, Seward, Cooper & Becker, P.C. by Thomas F. Myers, Detroit, Mich., and Lord, Bissell & Brook by Andrea Sykes Foote, Chicago, Ill., for Certain Underwriters at Lloyd's, London, and London Market Ins. Co.
Kitch, Saurbier, Drutchas, Wagner & Kenney by Stephen M. Kelley, Detroit, Mich., Adams, Duque & Hazeltine by Mitchell L. Lathrop, San Diego, Cal., for St. Paul Fire & Marine Ins. Co.
Kerr, Russell & Weber by James R. Case, Detroit, Mich., Adams, Duque & Hazeltine by Mitchell L. Lathrop, San Diego, Cal., for Federal Ins. Co.
Miller, Canfield, Paddock & Stone by Michael W. Hartmann, Detroit, Mich., and Crinker, Biddle & Reath by Timothy C. Russell, Wilson M. Brown, III, Patricia A. Gotschalk, Washington, D.C., for Am. Motorists, Am. Manu. Mut. and Lumbermen's Mut.
Cummings, McClorey, Davis & Acho by Bernard P. McClorey, Ronald G. Acho and T. Joseph Steward, Livonia, Mich., for Hartford Acc. & Indem. Ins. Co.
Pepper, Hamilton & Scheetz by Scott L. Gorland and Claudia V. Babiarz, Detroit, Mich., Siff, Newman, Rosen & Parker by Stephen Jacobs, New York City, for First State Ins. Co. and New England Reinsurance Corp.
Martin, Bacon & Martin, P.C. by James N. Martin, Thomas G. McHugh and Victor Van Kamp, Mt. Clemens, Mich., for Pacific Employers Ins. Co.
Deneberg, Tuffley, Bocan, Jamieson, Black, Hopkins & Ewald by William Jamieson and David Bocan, Southfield, Mich., for Northbrook Excess and Surplus Ins. Co. ("NESCO") n/k/a Allstate Ins. Co.
Highland & Currier, P.C. by J.R. Zanetti, Jr., Southfield, Mich., for Transport Indem. Co.
Plaintiff insurers, Fireman's Fund Insurance Companies and American Insurance Company, brought this action for declaratory judgment against their insureds Ex-Cell-O Corporation, McCord Gasket Corporation, and Davidson Rubber Company (collectively "Policyholders"), and two other insurers of Policyholders, Travelers Insurance Company and Employers Insurance of Wausau. Policyholders, in turn, filed a third-party complaint seeking declaratory judgment against Travelers, Wausau, and additional insurers.1
The parties seek a declaration of their respective rights and obligations under comprehensive general liability and excess liability insurance policies because of the manner in which Policyholders disposed of hazardous and toxic wastes. I have jurisdiction based upon diversity of citizenship and the Declaratory Judgment Act. 28 U.S.C. §§ 1332 & 2201(b).2
Ex-Cell-O is a Michigan corporation with its principal place of business in Troy, Michigan. It acquired McCord as a wholly-owned subsidiary in 1978. McCord is a Michigan corporation with its principal place of business in Detroit, Michigan. Davidson, a wholly-owned subsidiary of McCord, is a Delaware corporation with its principal place of business in New Hampshire. Policyholders manufacture a diverse range of products such as aerospace components, automotive parts, machine tools, ordnance equipment, packaging systems, and precision industrial products.
There are a variety of environmental claims against Policyholders, ranging from notices of their potential responsibility for environmental contamination to actions for reimbursement for the costs of cleanup of contaminated sites.
Policyholders have received notices from the United States Environmental Protection Agency (EPA) and state agencies that they may be potentially responsible for environmental contamination at a number of sites (so-called "potentially responsible party" or PRP letters), pursuant to the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), 42 U.S.C. §§ 9601-57, and state statutes.
Policyholders have also received notices of claims for reimbursement for costs incurred in cleaning up environmental contamination. The EPA has notified Policyholders of an immediate removal action at one site for which they are potentially responsible, pursuant to § 104(a)(1) of CERCLA, 42 U.S.C. § 9604(a)(1). One state agency has filed an action seeking reimbursement for its costs of cleaning up a contaminated site.
Policyholders, in turn, notified their insurers of these claims and of their contention that their insurers are liable under the comprehensive general liability policies. Policyholders' insurers denied liability. Fireman's Fund and American initiated the present action.
Policyholders moved for partial summary judgment July 1987, contending that their insurers had a duty to defend them against the claims. Insurers argued that they had no duty to defend until Policyholders became defendants in a traditional lawsuit for money damages. I held that the duty to defend was not so restricted, but extended to actual or threatened use of legal process to coerce payment, and to claims for cleanup of environmental contamination. 662 F.Supp. 71, 75 (E.D.Mich.1987).
Insurers also argued that they had no duty to defend because of a clause in some policies excluding coverage for pollution ("pollution exclusion"). I found that this determination required additional facts and I did not reach the issue. I held that the insurers had a duty to defend Policyholders against potential liability for their alleged environmental contamination. 662 F.Supp. at 76. I did not address the issue of coverage. I dealt only with the insurers' duty to defend.
The issue of coverage is not before me. I deal solely with the interpretation of the policies. The question of coverage awaits the application of this interpretation to the facts of this case.
The present motions for partial summary judgment arise from Policyholders' motion to compel discovery. Policyholders seek to compel discovery of a broad range of extrinsic evidence in the control of the insurers and a trade organization regarding the interpretation of the pollution exclusion. Insurers move for protective orders.
At hearing June 20, 1988, I held that the "parol evidence" rule precluded discovery of evidence of antecedent negotiation and interpretation unless I found the policies ambiguous. Goodwin, Inc. v. Orson E. Coe Pontiac, Inc., 392 Mich. 195, 204-11, 220 N.W.2d 664, 668-71 (1974). Policyholders and Wausau move for partial summary judgment on various issues. It is these motions I now address.3
Policyholders notified their insurers of their potential responsibility for environmental contamination damage at twenty-three sites in nine states. These sites ranged from Davidson's own plant, to waste disposal or recycling companies, to municipal and private landfills. The twenty-three sites are:4 Alburn Incinerator (Chicago, Illinois), Canons Engineering Corp.—Bridgewater (Bridgewater, Massachusetts), Canons Engineering Corp. — Plymouth (Plymouth, Massachusetts), Cardinal Landfill (Farmington, New Hampshire), Charles George Land Reclamation Trust Landfill (Tyngsboro, Massachusetts), City Chemical (Orlando, Florida), Clare Municipal Water Supply (Clare, Michigan), Conservation Chemical Company (Gary, Indiana), Conservation Chemical Company (Kansas City, Missouri), Davidson Rubber Company plant (Farmington, New Hampshire), Dover Municipal Landfill (Dover, New Hampshire), Enviro-Chem (Zionsville, Indiana), Keefe Environmental Services (Epping, New Hampshire), Liquid Disposal, Inc. (Shelby Township, Michigan), Ottati & Goss (Kingston Steel Drum) (Kingston, New Hampshire), Pagel's Landfill (Rockford, Illinois), QuVoe Industries, Inc., Refinery Products Facility (Schiller Park, Illinois), Re-Solve, Inc. (Dartmouth, Massachusetts), Silresim Chemical Co. (Lowell, Massachusetts), Springfield Municipal Landfill (Springfield, Vermont), Tinkham Garage (Londonderry, New Hampshire), Union Chemical Co. (Union, Maine), and Wayne Reclamation & Recycling, Inc. (Columbia City, Indiana).
Policyholders have negotiated a settlement with some of their insurers,5 leaving only third-party defendant...
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