New Castle County v. Hartford Acc. and Indem. Co.

• Citation: 673 F. Supp. 1359
• Decision Date: 02 November 1987
• Docket Number: Civ. A. No. 85-436-JLL.
• Parties: NEW CASTLE COUNTY, Plaintiff, v. HARTFORD ACCIDENT AND INDEMNITY COMPANY, et al., Defendants.
• Court: United States District Courts. 3th Circuit. United States District Court (Delaware)

673 F. Supp. 1359

NEW CASTLE COUNTY, Plaintiff, v. HARTFORD ACCIDENT AND INDEMNITY COMPANY, et al., Defendants.

Civ. A. No. 85-436-JLL.

United States District Court, D. Delaware.

November 2, 1987.

Susan C. Del Pesco and Catherine J. Sponseller of Prickett, Jones, Elliott, Kristol & Schnee, Wilmington, Del., for plaintiff New Castle County.

James F. Kipp of Trzuskowski, Kipp, Kelleher & Pearce, P.A., Wilmington, Del., John P. Arness and Jamie M. Bennett of Hogan & Hartson, Washington, D.C., of counsel, for defendants Hartford Acc. and Indem. Co. and Twin City Fire Ins. Co.

Norman M. Monhait of Morris & Rosenthal, P.A., Wilmington, Del., and Roger E. Warin, Virginia L. White-Mahaffey and Helen D. Irwin of Steptoe & Johnson, Washington, D.C., of counsel, for defendant Home Ins. Co.

John G. Mulford and Brian A. Sullivan of Theisen, Lank, Mulford & Goldberg, P.A., Wilmington, Del., for defendant Continental Cas. Co.

Raymond L. Becker of Becker & Becker, Wilmington, Del., and Edward C. German of German, Gallagher & Murtagh, Philadelphia, Pa., of counsel, for defendant U.S. Liability Ins. Co.

Edmund D. Lyons, Jr. of Aerenson, Ferrara & Lyons, Wilmington, Del., Dennis M. Flannery and A. Stephen Hut, Jr. of Wilmer, Cutler & Pickering, Washington, D.C., and Clifford B. Hendler and Sean M. Fitzpatrick of Colton and Boykin, Washington, D.C., of counsel, for defendant Ins. Co. of North America.

William J. Cattie III and Roger D. Landon of Heckler & Cattie, Wilmington, Del., for defendant U.S. Fire Ins. Co.

Frank O'Donnell and William L. Garrett, Jr. of O'Donnell & Garrett, Wilmington, Del., and Nancy J. Gellman of Conrad & O'Brien, P.C., Philadelphia, Pa., of counsel, for defendant Nat. Union Fire Ins. Co.

Gary W. Aber of Heiman and Aber, Wilmington, Del., James E. Rocap III, Thomas B. Carr and Stephen L. Nightingale of Miller, Cassidy, Larroca & Lewin, Washington, D.C., of counsel, for defendant Aetna Cas. and Sur. Co.

Thomas Reed Hunt, Jr. and Brett D. Fallon of Morris, Nichols, Arsht & Tunnell, Wilmington, Del., Robert N. Sayler and John G. Buchanan III of Covington & Burling, Washington, D.C., of counsel, for Stauffer Chemical Co.

Thomas Reed Hunt, Jr. and Brett D. Fallon of Morris, Nichols, Arsht & Tunnell, Wilmington, Del., for ICI Americas, Inc.

Robert B. Young of Young & Sherlock, Dover, Del., Thomas W. Brunner, Laura A. Foggan and Marilyn E. Kerst of Piper & Marbury, Washington, D.C., of counsel, for Ins. Environmental Litigation Ass'n (IELA).

MEMORANDUM OPINION

LATCHUM, Senior District Judge.

I. INTRODUCTION

This action originated with a complaint filed by New Castle County (the "County") seeking a declaratory judgment against twelve insurance companies which had issued comprehensive general liability policies to the County. (Docket Item "D.I." 1.) The County requested a declaration that the insurance companies must defend and indemnify the County in claims relating to pollution emanating from two landfills utilized by the County. The insurance companies filed answers denying coverage for the claims and asserting affirmative defenses. (D.I. 6, 7, 10-14, 25, 28, 40.) Several insurers also filed counterclaims. The County ultimately settled its claims against four of the insurers.¹ (D.I. 45, 124, 148, 245.)

The remaining eight insurers who did not settle filed motions for summary judgment that they had no duty to defend or indemnify the County for claims resulting from the landfill.² (D.I. 110, 215, 217, 219, 222, 224, 225, 227.) Only two of the issues raised in the motions for summary judgment are now before the Court. The first is the meaning of the policies' pollution exclusion clause. Aetna, National Union, U.S. Liability, Home Insurance, and Continental Casualty assert the pollution exclusion clause as a ground for summary judgment. The second issue is the scope of the policies' provision restricting coverage to "sums which the insured shall become legally obligated to pay as damages." (D.I. 109A at 1.) The insurers argue that this provision precludes coverage for claims involving injunctive relief. Aetna, National Union, Home Insurance, Twin City, INA, U.S. Fire, and Continental Casualty put forth the "injunctive relief" issue as a ground for summary judgment. For reasons set out below, the Court rejects the arguments urged by the insurers on both issues. Consequently, the Court will deny the insurers' motions for summary judgment on the two issues before the Court.

II. Facts

This litigation involves two landfill sites used by the County. The Llangollen landfill opened in 1960 and reached capacity by the end of 1968. (D.I. 233 at 5.) The County then leased property at Tybouts Corner for use as a landfill. (D.I. 233A at 147.) The lease agreement with the owners provided that the owners would operate the Tybouts Corner landfill. (Id.) The County received a letter from the State Department of Natural Resources and Environmental Control ("DNREC") on May 18, 1972, stating that two wells near the Llangollen landfill were contaminated. (D.I. 109A at 66-67.) DNREC indicated that it thought that leachate from the Llangollen landfill was the most likely source of the contamination. (Id. at 66.) DNREC required the County to take four remedial actions, such as digging a ditch around the Llangollen landfill to intercept the leachate. (Id.)

Five lawsuits relating to the two landfills were subsequently filed against the County. (D.I. 109A at 173-180, 197-205, 273-334.) Two of the lawsuits were filed by Artesian Water Company, a neighboring Company which supplied a substantial amount of the drinking water for New Castle County. (Id. at 173, 273.) In a state court action, Artesian Water Co. v. New Castle County, C.A. No. 5106 (Del. Ch.Ct. filed June 9, 1976) ("Artesian I"), Artesian alleged that groundwater supplies in the Llangollen area had been contaminated by the escape and migration of polluting leachate from the Llangollen landfill. (Id. at 175-77.) Artesian sought injunctive relief as well as damages. (Id. at 179.) Artesian also filed an action in federal court seeking reimbursement under section 107 of the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C. § 9607, for costs incurred by Artesian in responding to the alleged release of hazardous substances from Llangollen. Artesian Water Co. v. New Castle Co., C.A. No. 83-854 (D.Del. filed Dec. 8, 1983) ("Artesian II"). (D.I. 109A at 280-81.) The United States also filed an action seeking response costs and injunctive relief under section 107 of CERCLA, as well as alleging the County's liability under the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. § 6973. United States v. New Castle County, C.A. No. 80-489 (D.Del. filed April 6, 1984) (D.I. 109A at 282).

Two individuals also brought actions. In Wagner v. New Castle County, C.A. No. 7008 (Del.Ch.Ct. filed Nov. 10, 1982), plaintiff sought damages and injunctive relief for contamination of the water on plaintiff's land by the County's Tybout Corner landfill. (D.I. 109A at 202-205.) The final action, Andrews v. New Castle County, C.A. No. 84-124 (D.Del. filed March 2, 1984), sought damages and injunctive relief for injury to the plaintiff allegedly caused by the discharge of pollutants from Tybouts Corner landfill into plaintiff's drinking water. (D.I. 109A at 302.) The County then filed this action against its insurers requesting a declaratory judgment that the insurers were obligated to defend and indemnify the County regarding the five above mentioned lawsuits and the remedial measures taken by the County pursuant to the DNREC letter. (D.I. 1.)

III. ANALYSIS

A. Pollution Exclusion Clause

The County's policies with five of the insurers³ contained a provision known as a pollution exclusion clause. (D.I. 109A at 1; D.I. 216 at A-1 to A-3; D.I. 218 at A-2; D.I. 220 at 30; D.I. 228A at 2.) The pollution exclusion clause stated that the policy generally did not cover damages caused by pollution.⁴ However, the clause stated that the policy did cover pollution where the release, discharge or dispersal was "sudden and accidental." (D.I. 109A at 1.) The insurers argue that the word "sudden" is unambiguous and has a temporal meaning, such as an event that occurs quickly and not gradually. (D.I. 109 at 19-30.) The insurers assert that the contamination is due to a long term process of leachate migration, and therefore is not the type of sudden pollution which the policy would cover.

The County contends that the word "sudden" as used in the exclusion clause is ambiguous. (D.I. 233 at 31.) Furthermore, the County argues that where terms of an insurance policy are ambiguous, they must be construed in favor of the insured. (Id.)

Under Delaware law, an insurance policy is a contract of adhesion. Hallowell v. State Farm Mutual Automobile Insurance Company, 443 A.2d 925, 926 (Del. 1982). Consequently, an ambiguous term in an insurance contract is construed in favor of the insured and strictly against the insurer. Id.; Steigler v. Insurance Company of North America, 384 A.2d 398, 400 (Del. 1978). An ambiguity is created when the terms of a contract permit two or more reasonable interpretations. Hallowell, 443 A.2d at 926; Cheseroni v. Nationwide Mutual Insurance Company, 402 A.2d 1215, 1217 (Del.Super.1979).

The primary dictionary definition of the word "sudden" is "happening without previous notice" or "occurring unexpectedly." Webster's Third New International Dictionary, at 2284 (1971); see Black's Law Dictionary, at 1284 (1979). While other definitions indicate that the word has connotations of brevity, this only suggests that the word has more than one reasonable definition. Each of the parties cites case law supporting their respective definition of the word "sudden" in a pollution exclusion clause. Several courts have found the word "sudden" to be unambiguous, and to exclude pollution that occurs gradually. See, e.g., Great Lakes Container...