Mottolo v. Fireman's Fund Ins. Co.

• Decision Date: 16 August 1993
• Docket Number: Civ. No. 89-320-JD.
• Citation: 830 F. Supp. 658
• Parties: Richard A. MOTTOLO, et al. v. FIREMAN'S FUND INSURANCE COMPANY, et al.
• Court: U.S. District Court — District of New Hampshire

830 F. Supp. 658

Richard A. MOTTOLO, et al. v. FIREMAN'S FUND INSURANCE COMPANY, et al.

Civ. No. 89-320-JD.

United States District Court, D. New Hampshire.

August 16, 1993.

Mark S. Gearreald, Stratham, NH, for plaintiffs.

John L. Putnam, Stephen H. Roberts, Dover, NH, Kevin C. Devine, Manchester, NH, William G. Scott, Portsmouth, NH, Waltraut S. Addy, Washington, DC, for defendants.

ORDER

DiCLERICO, Chief Judge.

Plaintiffs Richard Mottolo and Service Pumping and Drain Co., Inc. ("Service") have filed this declaratory judgment action pursuant to 28 U.S.C.A. § 2201 (West Supp.1993) against defendants Fireman's Fund Insurance Company ("Fireman's Fund"), United States Fidelity & Guaranty Company ("USF & G") and Aetna Casualty and Surety Company ("Aetna").¹ The plaintiffs seek a declaration of the parties' rights and duties with respect to insurance coverage in two underlying lawsuits against the plaintiffs. In those lawsuits, federal and state officials alleged the plaintiffs dumped hazardous wastes at a site on Blueberry Hill Road ("the site") in Raymond, New Hampshire. See generally, United States v. Mottolo ("Mottolo I"), 695 F.Supp. 615 (D.N.H.1988).

The defendants have moved for summary judgment, arguing the damages resulting from plaintiffs' waste disposal activity did not arise from an "occurrence," as defined in their insurance policies, for which they are obligated to indemnify the plaintiffs. The plaintiffs objected and filed cross-motions for summary judgment. Summary judgment is appropriate only if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c); see also Abbadessa v. Moore Business Forms, Inc., 987 F.2d 18, 22 (1st Cir.1993). For the following reasons, the court finds there is no genuine issue of material fact that the plaintiffs' damages did not result from an "occurrence" for which the defendants are obligated to indemnify the plaintiffs and therefore grants the defendants' motion for summary judgment.²

Background

An off-duty local police officer discovered the site while hunting and reported it to authorities. Mottolo I, 695 F.Supp. at 618. Subsequent on-site investigation by the State of New Hampshire revealed a dump in which a large number of drums and pails of liquid waste had been compacted by bulldozers or other earthmoving equipment and partially buried. Id. The contents of at least two tank trucks of hazardous chemicals were discharged directly onto the soil surface at the site. Id. at 623.

In or about May 1979, Mottolo met with New Hampshire officials who informed him he would be responsible for the cleanup of the site. Mottolo v. United States Fidelity & Guar. Co. ("Mottolo II"), 127 N.H. 279, 280, 498 A.2d 760 (1985). In or about July 1979, the State of New Hampshire brought suit against Mottolo, seeking a permanent injunction against future disposal activities and an abatement of a public nuisance resulting from the previous dumping at the site. Id. at 281, 498 A.2d 760. In the spring of 1980, the State of New Hampshire requested the United States Environmental Protection Agency ("EPA") to conduct removal operations at the site. Mottolo I, 695 F.Supp. at 619. Between September 1980 and February 1982, the EPA conducted excavation operations at the site, which confirmed the containers at the site had been thrown haphazardly atop each other among boulders, that the majority of containers were crushed, punctured, corroded, and disfigured, and that many of the containers were leaking. Id. The EPA ultimately recovered more than 1650 drums and other smaller containers, all of which held or had held numerous toxic, flammable, corrosive, irritant and explosive materials. Id. The hazardous chemical wastes the EPA found at the site included, inter alia, acetone, toluene, trichlorethylene, xylene, butyl acetate, methanol, methylene chloride, methyl methacrylate, methyl ethyl ketone, and methyl isobutyl ketone. Id. at 623.

On September 8, 1983, the EPA instituted a cost recovery action against the plaintiffs under the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C.A. § 9601 et seq. (West 1983 & Supp.1993) to recoup costs expended cleaning up the site. Mottolo I, 695 F.Supp. at 623. In February 1984, the State of New Hampshire also filed suit against the plaintiffs under CERCLA to recoup costs expended assisting the EPA during the cleanup of the site. Both the EPA and the State of New Hampshire specifically sought recovery of costs incurred to remediate contamination existing solely on the site. The cases were consolidated for trial. On September 30, 1987, the EPA and the State of New Hampshire moved for summary judgment seeking, inter alia, a declaration requiring the plaintiffs to reimburse the EPA and the State of New Hampshire for their costs incurred in cleaning up the site. Id. On August 28, 1988, the court granted in part the motion for summary judgment, finding Mottolo and Service jointly and severally liable for all response and remedial costs the EPA and State of New Hampshire incurred as a result of the conditions at the site. Id. at 631.

Discussion

A. Duty to Indemnify

The court determines an insurer's duty to indemnify the insured by considering whether the allegations against the insured fall within the express terms of the policy. United States Fidelity & Guar. Co., Inc. v. Johnson Shoes, Inc., 123 N.H. 148, 151-52, 461 A.2d 85 (1983). The court's review of the allegations is not limited to the facts pled in the complaint against the insured. M. Mooney Corp. v. United States Fidelity & Guar. Co., Inc., 136 N.H. 463, 469, 618 A.2d 793 (1992). "When the alleged facts do not clearly preclude an insurer's liability, inquiry may proceed into underlying facts." Id. (citing Happy House Amusement, Inc. v. New Hampshire Ins. Co., 135 N.H. 719, 722-23, 609 A.2d 1231 (1992); Moore v. New Hampshire Ins. Co., 122 N.H. 328, 331-33, 444 A.2d 543 (1982); Allstate Ins. Co. v. Carr, 119 N.H. 851, 853, 409 A.2d 782 (1979)). In such circumstances, the court looks to the facts underlying the complaint "to avoid permitting the pleading strategies ... of third party claimants to control the rights of parties to an insurance contract." Id. When the court interprets the policy in light of these facts, it must determine whether, on a more than casual reading of the policy, a reasonable person in the insured's position would have expected indemnity for the claims asserted against him. Merchants Ins. Group v. Warchol, 132 N.H. 23, 27, 560 A.2d 1162 (1989); Karol v. New Hampshire Ins. Co., 120 N.H. 287, 289, 414 A.2d 939 (1980). "This is clearly an objective standard." Merchants, 132 N.H. at 27, 560 A.2d 1162; Karol, 120 N.H. at 290, 414 A.2d 939.

The court therefore begins by examining the allegations set forth in the complaints in Mottolo I and the language of the insurance policies to determine whether the plaintiffs' damages arose from an "occurrence" for which the defendants have a duty to indemnify the plaintiffs. The EPA complaint sets forth specific allegations of pollution in paragraphs 10 and 11.

10. Between at least 1975 and 1978 Richard Mottolo buried more than 1650 drums and other smaller containers containing wastes, including hazardous substances, in the southwest portion of the Mottolo site. These wastes were transported from K.J. Quinn and Co., Inc. and Lewis Chemical Corporation and disposed of at the Mottolo site.

11. The drums and other containers were buried in an area in the southwest portion of the site adjacent to the intermittent stream.

See Complaint, United States v. Mottolo, No. 83-547 (D.N.H.), attached as Exhibit 14, Fireman's Fund's Motion for Summary Judgment. After alleging in paragraph 10 that Mottolo had formerly used the site as a pig farm, the state complaint sets forth specific allegations of pollution in paragraphs 12 and 13.

12. Between at least 1975 and 1978, the Defendant Mottolo buried more than 1650 drums and other smaller containers containing wastes, including hazardous substances, at the Mottolo Site. These wastes were transported from Quinn and Lewis Chemical and disposed of at the Mottolo Site.

13. The drums and other containers were buried in an area in the southwest portion of the Mottolo Site adjacent to the intermittent stream.

See Complaint, New Hampshire v. Mottolo, No. 84-90 (D.N.H.), attached as Exhibit 15, Fireman's Fund's Motion for Summary Judgment. The insurance policies each define "occurrence" as "an accident, including continuous or repeated exposure to conditions, which results in bodily injury or property damage neither expected nor intended from the standpoint of the insured." See Exhibit 19, Fireman's Fund's Motion for Summary Judgment; Exhibits, USF & G's Motions for Summary Judgment; Exhibits 3, 4, Aetna's Motion for Summary Judgment.

The court finds these allegations are insufficient to determine if there was an "occurrence" within the meaning of the policies. The allegations are not as detailed as those set forth in Great Lakes Container Corp. v. National Union Fire Ins. Co., 727 F.2d 30, 32-33 (1st Cir.1984). In Great Lakes, the government made the following allegations:

Defendants ... operated a barrel reconditioning business on the site. On this site, there was a storage area where up to 60,000 drums are stored pending reconditioning, a plant to recondition barrels, a small office and a storage area for reconditioned barrels.

In the course of reconditioning barrels, used barrels are emptied of all chemicals and other wastes and residues, washed and rinsed and stripped of rust by various industrial processes some of which include use of caustic solutions, physically dedented and tightened, tested, painted, and sold.

Wastes from used drums and the

...