Hoppy's Oil Service, Inc. v. INA, Civ. A. No. 90-12851-K.

• Court: United States District Courts. 1st Circuit. United States District Courts. 1st Circuit. District of Massachusetts
• Citation: 783 F. Supp. 1505
• Docket Number: Civ. A. No. 90-12851-K.
• Parties: HOPPY'S OIL SERVICE, INC., Plaintiff, v. INSURANCE COMPANY OF NORTH AMERICA and Greater New York Mutual Insurance Company, Defendants.
• Decision Date: 07 February 1992

783 F. Supp. 1505

HOPPY'S OIL SERVICE, INC., Plaintiff,
v.
INSURANCE COMPANY OF NORTH AMERICA and Greater New York Mutual Insurance Company, Defendants.

Civ. A. No. 90-12851-K.

United States District Court, D. Massachusetts.

February 7, 1992.

783 F. Supp. 1506

Arthur Paul Kreiger, Anderson & Kreiger, Cambridge, Mass.

Paul R. Koepff, Michael P. Murphy, Mudge Rose Guthrie Alexander & Ferdon, New York City, David B. Chaffin, Hare & Chaffin, Boston, Mass., Stephen T. Keefe, Whiting, Elinoff & Keefe, Weymouth, Mass., Robert W. Byrne, Orlando Conseils, New York City, for defendants Cigna and I.N.A.

Paul R. Koepff, Mudge, Rose, Guthrie, Alexander & Ferdon, New York City, Drew W. Elinoff, Stephen T. Keefe, John L. Kerr, Whiting, Elinoff & Keefe, S. Weymouth, Mass., David B. Chaffin, Hare & Chaffin, Boston, Mass., for defendant Greater New York Mut. Ins. Co.

MEMORANDUM

KEETON, District Judge.

This action concerns a dispute between plaintiff Hoppy's Oil Service, Inc. ("Hoppy's") and its insurers, Insurance Company of North America ("INA") (for policy periods from July 1, 1981 to July 1, 1983) and Greater New York Mutual Insurance Company ("GNY") (for policy periods from July 1, 1983 to June 30, 1986), regarding the alleged duty of the insurers under certain insurance policies to defend and indemnify Hoppy's in state court environmental litigation, Feuer, Trustee of Halifax Realty Trust v. Hoppy's Oil Service, Inc., Civil Action No. 85-22636 (Plymouth Superior Court) ("the underlying litigation"). Pursuant to the court's November 15, 1991 Procedural order, the following motions came before this court for oral argument on January 13, 1992: INA's Motion for Summary Judgment (Docket No. 18, filed April 12, 1991), GNY's Motion for Summary Judgment (Docket No. 24, filed April 29, 1991), Hoppy's Cross-Motion for Partial Summary Judgment (Docket No. 28, filed May 24, 1991), and Hoppy's Motion to Amend Complaint (Docket No. 27, filed May 24, 1991). The following additional submissions have been received, and, together with the four motions described above, are now before the court for ruling: Affidavit of Drew M. Elinoff (Docket No. 49, filed December 5, 1991); Insurance Company of North America's Additional Motion for Summary Judgment (Docket No. 58, filed January 21, 1992); Greater New York Mutual Insurance Company's Motion to Add Further Ground for Support of Its Motion for Summary Judgment (Docket No. 55, filed January 15, 1992); Supplemental Memorandum in Support of

783 F. Supp. 1507

Defendant, Greater New York Mutual Insurance Company's Motion for Summary Judgment (Docket No. 56, filed January 15, 1992); Defendant Greater New York Mutual Insurance Company's Supplemental Memorandum (Docket No. 53, filed January 13, 1992); Plaintiff's Supplemental Memorandum Re: Summary Judgment in Response to Procedural Order (attached to Docket No. 52, dated January 9, 1992); Plaintiff's Opposition to Defendant's Additional Motion for Summary Judgment (filed January 28, 1992); Reply Memorandum of Insurance Company of North America in Support of Its Supplemental Motion for Summary Judgment on the Ground of Late Notice (Docket No. 65, filed February 4, 1992); Supplemental Affidavit of Michael P. Murphy in Support of Insurance Company of North America's Motion for Summary Judgment on the Ground of Late Notice (Docket No. 64, filed February 4, 1992); Affidavit of Richard T. LaMountain, Jr. (Docket No. 62, filed February 4, 1992); and Affidavit of Ann M. LaPlante (Docket No. 63, filed February 4, 1992). For the reasons stated herein, defendants' motions for summary judgment are granted and plaintiff's motions for summary judgment and for leave to amend its complaint are denied

I. BACKGROUND

The following facts are undisputed. Hoppy's leased certain premises in Halifax, Massachusetts, upon which it operated a gasoline station for a period of sixteen years from 1969 to 1985. At the station were located three underground storage tanks filled with leaded, unleaded, and diesel fuels, respectively. On April 23, 1983, a construction company doing work near the station noticed a petroleum leak that was determined to have a source at the underground storage tanks. The diesel tank was found to have a pinhole leak and was replaced. A pipe attached to the unleaded tank had a cracked elbow that was repaired. Both the leaded and unleaded tanks passed a tightness test at that time.

In July 1985, there was once again an occasion to test the soundness of the tanks. The diesel tank was determined to be leaking at the fill pipe. The unleaded tank was found to be releasing gasoline at the rate of 0.786 gallons/hour and the regular tank was releasing gasoline at the rate of 0.073 gallons/hour. No significant corrosion or apparent cracks were discovered on the tanks when they were removed.

The Halifax Realty Associates Trust acquired the property on which the station was situated on July 8, 1985. The trustee, plaintiff in the underlying litigation, initiated suit against Hoppy's on November 22, 1985. The trustee alleges that the leaded and unleaded gasoline tanks were leaking at an unacceptable rate of loss in July 1985 despite the absence of any leakage on June 1, 1982. Hoppy's notified INA of the claims against Hoppy's in March of 1990, and notified GNY in April of 1990. Hoppy's requested each insurer to defend and indemnify Hoppy's. After both insurers refused, this action was commenced in state court on October 16, 1990. The defendants removed the case to this court on November 23, 1990.

II. SCOPE OF COVERAGE

INA insured Hoppy's under General Liability Policies GLP GO128561 and GLP GO329808, and Garage Policy GAR 215985. GNY provided insurance under Special Multi-Peril Policy 1120Y60350. Each of the policies provided that the insurer would pay on behalf of the insured certain sums in the event of "property damage." Excluded from coverage was property damage caused by the discharge of pollutants unless such discharge was sudden and accidental.

Under the GLP policies and the Special Multi-Peril policy, "`property damage' means (1) physical injury to or destruction of tangible property which occurs during the policy period." GLP GO128561 (Ex. 2 to Docket No. 20); GLP GO329808 (Ex. 3 to Docket No. 20); Special Multi-Peril Policy 1120Y60350 (attached to Docket No. 49) (emphasis added). The garage policy also specifically provides that the insurance covers "property damage or losses that occur during the policy period." GAR 215985 (Ex. 5 to Docket No. 20) (emphasis added).

783 F. Supp. 1508

The policy periods under which claims are made in this action were July 1, 1981 to July 1, 1982 and July 1, 1982 to July 1, 1983 (INA policies) and July 1, 1983 to June 30, 1984 and July 1, 1984 to June 30, 1985 (GNY policies). It is uncontested that the claims made under the several policies are for discharges of pollution not covered unless under a sudden and accidental exception to a pollution exclusion. (The GNY policy of July 1, 1985 to June 30, 1986 contained a broader pollution exclusion, not excepting sudden and accidental discharges. Hoppy's does not pursue coverage under that policy. Pl.'s Mem. in Opp. to the Defs.' Mot. for Summ. J. and in Supp. of Its Cross-Mot. for Summ. J. (Docket No. 30) at 17 n. 8 hereinafter Pl.'s Mem.)

It is undisputed that it was on July 8, 1985 that the plaintiff in the underlying litigation first acquired an interest in the property allegedly damaged by the insured's (Hoppy's) conduct. Policy provisions like those described are commonly referred to as providing "occurrence" coverage, as distinguished from "claims made" coverage. Under "occurrence" coverage, as commonly construed and applied in Massachusetts (the law of which applies in this case) and other states as well, an entity making a tort claim against the insured must...