In re Salem Suede, Inc.

• Decision Date: 24 June 1998
• Docket Number: Civ.A. No. 97-12587-REK to 97-12590-REK.,No. 96-13184-JNF,Adversary No. 96-1298,96-13184-JNF
• Parties: In re SALEM SUEDE, INC., Debtor. FOREIGN CAR CENTER, INC., Stefano Picciotto, Judith Picciotto, Juan B. Nunez, and Jose B. Ferreras, Plaintiffs, v. SALEM SUEDE, INC., Zion Realty Corporation, The Travelers Insurance Company, and The Travelers Indemnity Company, Defendants. SALEM SUEDE, INC., Appellant, v. TRAVELERS INDEMNITY CO., Appellee. In re ZION REALTY CORPORATION, Debtor. FOREIGN CAR CENTER, INC., Stefano Picciotto, Judith Picciotto, Juan B. Nunez, and Jose B. Ferreras, Plaintiffs, v. The TRAVELERS INSURANCE COMPANY, Salem Suede, Inc., and Zion Realty Corporation, Defendants. The TRAVELERS INDEMNITY COMPANY, Plaintiff, v. SALEM SUEDE, INC., and Zion Realty Corporation, Cross-Claim Defendants and Cross-Claim Plaintiffs. ZION REALTY CORPORATION, Appellant, v. TRAVELERS INDEMNITY CO., Appellee. In re SALEM SUEDE, INC., Debtor. FOREIGN CAR CENTER, INC., Stefano Picciotto, Judith Picciotto, Juan B. Nunez, and Jose B. Ferreras, Plaintiffs, v. The TRAVELERS INDEMNITY COMPANY, Salem Suede, Inc., and Zion Realty Corporation, Defendants. TRAVELERS INDEMNITY CO., Appellant, v. FOREIGN CAR CENTER, INC., Stefano Picciotto, Judith Picciotto, Juan Nunez, and Jose Ferreras, Appellees. IN RE SALEM SUEDE, INC., Debtor. FOREIGN CAR CENTER, INC., Stefano Picciotto, Judith Picciotto, and Juan B. Nunez, Plaintiffs, v. The TRAVELERS INSURANCE COMPANY, Salem Suede, Inc., and Zion Realty Corporation, Defendants. The TRAVELERS INDEMNITY COMPANY, Cross-Claimant and Cross-Claim Defendant, v. SALEM SUEDE, INC., and Zion Realty Corporation, Cross-Claim Defendants and Cross-Claimant. 587*587 Stefano PICCIOTTO, Judith Picciotto, Foreign Car Center, Inc., and Juan Nunez, Appellants, v. TRAVELERS INDEMNITY CO., Appellee.
• Court: U.S. District Court — District of Massachusetts

221 B.R. 586 (1998)

In re SALEM SUEDE, INC., Debtor.

FOREIGN CAR CENTER, INC., Stefano Picciotto, Judith Picciotto, Juan B. Nunez, and Jose B. Ferreras, Plaintiffs, v. SALEM SUEDE, INC., Zion Realty Corporation, The Travelers Insurance Company, and The Travelers Indemnity Company, Defendants.

SALEM SUEDE, INC., Appellant, v. TRAVELERS INDEMNITY CO., Appellee.

In re ZION REALTY CORPORATION, Debtor.

FOREIGN CAR CENTER, INC., Stefano Picciotto, Judith Picciotto, Juan B. Nunez, and Jose B. Ferreras, Plaintiffs, v. The TRAVELERS INSURANCE COMPANY, Salem Suede, Inc., and Zion Realty Corporation, Defendants.

The TRAVELERS INDEMNITY COMPANY, Plaintiff, v. SALEM SUEDE, INC., and Zion Realty Corporation, Cross-Claim Defendants and Cross-Claim Plaintiffs.

ZION REALTY CORPORATION, Appellant, v. TRAVELERS INDEMNITY CO., Appellee.

In re SALEM SUEDE, INC., Debtor.

FOREIGN CAR CENTER, INC., Stefano Picciotto, Judith Picciotto, Juan B. Nunez, and Jose B. Ferreras, Plaintiffs, v. The TRAVELERS INDEMNITY COMPANY, Salem Suede, Inc., and Zion Realty Corporation, Defendants.

TRAVELERS INDEMNITY CO., Appellant, v. FOREIGN CAR CENTER, INC., Stefano Picciotto, Judith Picciotto, Juan Nunez, and Jose Ferreras, Appellees.

IN RE SALEM SUEDE, INC., Debtor.

FOREIGN CAR CENTER, INC., Stefano Picciotto, Judith Picciotto, and Juan B. Nunez, Plaintiffs, v. The TRAVELERS INSURANCE COMPANY, Salem Suede, Inc., and Zion Realty Corporation, Defendants.

The TRAVELERS INDEMNITY COMPANY, Cross-Claimant and Cross-Claim Defendant, v. SALEM SUEDE, INC., and Zion Realty Corporation, Cross-Claim Defendants and Cross-Claimant.

Stefano PICCIOTTO, Judith Picciotto, Foreign Car Center, Inc., and Juan Nunez, Appellants, v. TRAVELERS INDEMNITY CO., Appellee.

No. 96-13184-JNF, Adversary No. 96-1298, Civ.A. Nos. 97-12587-REK to 97-12590-REK.

United States District Court, D. Massachusetts.

June 24, 1998.

COPYRIGHT MATERIAL OMITTED

Stephen F. Gordon, Gordon & Wise, Boston, MA, for Salem Suede, Inc.

Frank J. Ciano, Cambridge, MA, Amy J. Rosengarten, Law Office of Frank J. Ciano, Cambridge, MA, Stephen F. Gordon, Gordon & Wise, Boston, MA, for Salem Suede, Inc.

Mary A. Dowd, M. Ellen Carpenter, Kern, Hagerty, Roach & Carpenter, Boston, MA, for Zion Realty Corporation Consolidated.

Timothy M. Hughes, Shafner, Gilleran & Mortensen, P.C., Edwin A. McCabe, Philip Y. Brown, Larry R. Tipton, McCabe Brown, Joel Z. Eigerman, Roche, Carens & DeGiacomo, P.C., Michael C. Gilleran, Pepe & Hazard, L.L.P., Boston, MA, for Foreign Car

Center, Inc., Stefano Picciotto, Judith Picciotto and Juan Nunez.

Timothy M. Hughes, Shafner, Gilleran & Mortensen, Joel Z. Eigerman, Roche, Carens & DeGiacomo, P.C., Michael C. Gilleran, Pepe & Hazard, L.L.P., Boston, MA, for Jose Ferreras.

John A. Nadas, Choate, Hall & Stewart, Boston, MA, for Travelers Indemnity Co.

Opinion

KEETON, District Judge.

This consolidated proceeding in the district court in relation to bankruptcy matters presents issues regarding the effect of purported notices of interlocutory appeal and various requests for leave to proceed on interlocutory appeal from different orders of the bankruptcy court in the adversary proceeding identified in the various parts of the caption, above. In this court, the attempted appeals have been consolidated because some of them, at least, and perhaps all of them, present "similar issues from a common record" in bankruptcy, as that phrase is used in D.Mass.L.R. 203(E).

For reasons explained in this Opinion, the bankruptcy court was correct in denying summary judgment, but this court's reasoning is somewhat different and leads also to disposition of all of these consolidated appeals, except that of Travelers, by denial of leave for interlocutory appeal. Travelers' appeal succeeds in part in that, even though affirming the denial of Travelers' motion for summary judgment, this court does so on reasoning different from that of the bankruptcy court. This court also vacates the bankruptcy court's "conclusive determinations" with respect to claims asserted against Travelers under Mass.Gen.L. chs. 93A and 176D, and remands the case to the bankruptcy court for disposition of those claims in a manner consistent with this opinion.

I. Procedural and Factual Background

The consolidated appeals arise from the following sequence of events and rulings:

1970. Salem Suede, Inc. (the Debtor) opens a leather processing plant and tannery in Peabody, Massachusetts.

December 5, 1978. Travelers Indemnity Co. (Travelers) issues a Comprehensive General Liability Policy No. 650-115B130-1-IND-78 to "Salem Suede, Inc., Massachusetts Split, Inc., Zion Realty Corp., Zion Realty Trust, Alan R. Zion, Trustee." Docket No. 38, Exh. 2 at TR-3-0547 (the 1979 CGL Policy). Zion Realty Trust is the entity that owns the property on which Salem Suede\'s tannery is located in Peabody. The policy provides coverage for occurrences from December 1, 1978 to December 1, 1979. Id. The policy contains an exclusion from "COVERAGE A — BODILY INJURY LIABILITY" and "COVERAGE B — PROPERTY DAMAGE LIABILITY" that states:

EXCLUSIONS — This insurance does not apply:

(f)(1) to bodily injury or property damage arising out of any emission, discharge, seepage, release or escape of any liquid, solid, gaseous or thermal waste or pollutant

(i) if such emission, discharge, seepage, release or escape is either expected or intended from the standpoint of any insured or any person or organization for whose acts or omissions any Insured is liable, or

(ii) resulting from or contributed to by any condition in violation of or non-compliance with any governmental rule, regulation or a law applicable thereto. . . .

Docket No. 38 at TR-3-0598 (the Pollution Exclusion).

Last months of 1979. Mr. Picciotto, the owner of Foreign Car Care Center (FCC) complains to the Massachusetts Department of Environmental Quality Engineering (the DEQE) about odors and particulates emanating from the smokestack of Salem Suede\'s tannery. FCC is located in a lot adjacent to Salem Suede\'s tannery.

December 3, 1979. The DEQE issues Notice of Violation against Salem Suede on the basis of Picciotto\'s complaint and an agent\'s observation of "a white particulate all over the rear of his Picciotto\'s building." Docket No. 36, Exh. 1.

December 19, 1979. Travelers issues a Comprehensive General Liability Policy No. 650-115B130-1-IND-78 to "Salem Suede, Inc., Massachusetts Split, Inc., Zion Realty Corp., Zion Realty Trust, Alan R. Zion, Trustee." Docket No. 38, Exh. 3 at TR-3-0611 (the 1980 CGL Policy). The policy provides coverage for occurrences from December 1, 1979 to December 1, 1980. Id. The policy contains the same exclusion quoted above applying to the same types of coverage. Id. at TR-3-0670.

1980. The DEQE issues at least three Notices of Violation against Salem Suede. Docket No. 36, Exhs. 2-4.

September 17, 1980. Travelers issues a Comprehensive General Liability Policy No. 650-115B130-1-IND-80 to "Salem Suede, Inc., Massachusetts Split, Inc., Zion Realty Corp., Casper-Salem Corp., Zion Realty Trust, Alan R. Zion, Trustee Atima." Docket No. 38, Exh. 4 at TR-3-0692 (the 1981 CGL Policy). The policy provides coverage for occurrences from July 1, 1980 to July 1, 1981. Id. The policy contains the same exclusion quoted above applying to the same types of coverage. Id. at TR-3-0747.

June 1, 1982. Salem Suede sends letter to DEQE reporting that:

Our initial attempt to reduce particulate emissions by using a fabric filter on the outlet of our dust collector has proven relatively effective . . . A study is being made of our odor problem and recommendations for reducing this problem will be available by the end of July 1982.

Docket No. 36, Exh. 5.

March 1, 1983. The DEQE issues a Notice of Violation against Salem Suede. Docket No. 36, Exh. 7.

March 24, 1983. FCC, Stefano Picciotto, Judith Picciotto, Juan B. Nunez, and Jose B. Ferreras (the Judgment Creditors) file a complaint to initiate Civil Action No. 83-740 in Essex Superior Court (Superior Court Civil Action No. 83-740) seeking damages for personal injuries and property damage caused by emissions from Salem Suede\'s tannery.

March 31, 1983. The president of Salem Suede sends a letter to Columbia Insurance Agency, Inc. (Columbia) to inform Columbia of Superior Court Civil Action No. 83-740.

April 5, 1983. An employee at Columbia forwards to Travelers a copy of the summons in Superior Court Civil Action No. 83-740 with a cover letter identifying Salem Suede as an insured of Travelers.

April 13, 1983. At a deposition for Civil Action No. 83-740, Mr. Picciotto described the emissions from Salem Suede\'s smokestack as occurring "on a daily basis" and requiring him to clean his cars "constantly." Docket No. 37, Exh. 1 at 51-52.

April 15, 1983. The DEQE issues another Notice of Violation against Salem Suede. Docket No. 36, Exh. 10.

April 27, 1983. In a memorandum to files, an employee of Travelers describes her discussion with Salem Suede\'s counsel as part of her investigation of the claim forwarded to Travelers by Columbia. The memorandum summarizes, in very general terms, some basic aspects of Salem Suede\'s business at the time and of the complained-of emissions.

May 12, 1983. In a memorandum to files, an employee of Travelers describes her discussion with counsel for the Judgment Creditors in Superior Court Civil Action No. 83-740.

May 13, 1983. The DEQE issues another Notice of Violation. Docket No. 36, Exh. 14.

May 14, 1983 - September 28, 1993 (A ten year period). During this 10-year period, the Superior Court case filed in March 1983 was proceeding toward final judgment. In this period, no other events are asserted in contentions before this court to have had significance in relation to the dispute over insurance coverage that is the subject of the attempted appeals from the bankruptcy court\'s orders.

September 29, 1993. The Superior Court in Civil Action No. 83-740 orders judgment for the Judgment Creditors. The

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