Pittston Co. Ultramar America Ltd. v. Allianz Ins. Co.
| Decision Date | 27 August 1997 |
| Docket Number | No. 96-5166,No. 96-5167,Nos. 96-5166,No. LA,No. 3,No. 2A,96-5167,3,LA,2A,96-5166,s. 96-5166 |
| Parties | 28 Envtl. L. Rep. 20,066 PITTSTON COMPANY ULTRAMAR AMERICA LIMITED, a Corporation of the State of Delaware; Ultramar Petroleum, Inc., a Corporation of the State of Delaware, Intervenor-Plaintiffs, v. ALLIANZ INSURANCE COMPANY, a Corporation of the State of California; Allstate Reinsurance Company, a Corporation of the State of Illinois; American Centennial Insurance Company, a Corporation of the State of Delaware; American Insurance Group, a Corporation of the State of California, a/k/a American Marine Insurance Group; American Marine Underwriters, Inc., a Corporation of the State of Wisconsin; Ancon Insurance Company, a Corporation; Citadel Assurance Company, a Corporation of Canada, a/k/a Citadel General; Employers Insurance Company of Wausau, a Corporation of the State of Wisconsin, a/k/a American Marine Underwriters; INSCO, a Corporation; Insurance Company of North America, a Corporation of the State of Pennsylvania; Insituto De Reasseguros Do Brasil; IRB, a British Corporation, a/k/a Price Forbes Limited; The Lumbermens Mutual Insurance Company, a Corporation of the State of Illinois; Mentor, a Corporation; Societa Italiana Assicurazioni Transporti, a Corporation of Canada, a/k/a S.I.A.T.; Sphere Drake Underwriters, a Corporation; The Charter Oak Fire Insurance Company, a Corporation of the State of Connecticut; The Hartford Insurance Company, a Corporation of the State of Connecticut; * Travelers Indemnity Company, a Corporation of the State of Connecticut; United States Fire Insurance Company, a Corporation of the State of New York; Underwriters at Lloyd's of London, which include; Alliance Insurance Company, Ltd.; Andrew Weir Insurance Company, Ltd.; Bishopsgate Insurance Company, Ltd.; Drake Insurance Company, Ltd.; Edinburgh Assurance Company, Ltd.; English & American Insurance Company, Ltd.; Hansa Marine Insurance Company, Ltd.; Insurance Company of Ireland, Ltd.; Orion Insurance Company, Ltd.; Sphere Insurance Company, Ltd.; Threadneedle Insurance Compan |
| Court | U.S. Court of Appeals — Third Circuit |
John E. Heintz (argued), Christopher H. Marraro, Steven N. Gersten, Howrey & Simon, Washington, DC, John M. Angello, Carella, Byrne, Bain, Gilfillan, Cecchi, Stewart & Olstein, Roseland, NJ, for Appellants in No. 96-5166, Ultramar America Limited and Ultramar Petroleum, Inc.
Robert N. Sayler (argued), William F. Greaney, Robert A. Long, Jr., Covington & Burling, Washington, DC, Timothy A. Vanderver, Jr., David J. Farber, Patton Boggs, L.L.P., Washington, DC, for Appellant in No. 96-5167, The Pittston Company.
William B. McGuire, John J. Henschel, Tompkins, McGuire & Wachenfeld, Newark, NJ, Donald T. Rave, Jr., George R. Daly, Stacey Tranchina, Bigham, Englar, Jones & Houston, New York City, for Allianz Insurance Company; Ancon Insurance Company; The Hartford Insurance Company; Chiyoda
Fire & Marine Insurance Company; Rochdale Insurance Company; Unigard Mutual Insurance Company; Unione Italiana; United Americas.
Wm. Gerald McElroy, Jr. (argued), Zelle & Larson, Waltham, MA, for American Marine Underwriters, Inc.; Employers Insurance Company of Wausau.
Martin R. Baach, Bruce R. Grace (argued), Nussbaum & Wald, Washington, DC, for INSCO; Sphere Drake Underwriters; Nippon Fire & Marine Insurance Company (U.K.) Limited; Skandia (UK) Insurance Company, Ltd., per Orion Insurance Company, PLC. Group; Switzerland American Insurance Company; British Reserve Insurance Company, Ltd. No. LA/C; National Insurance Company of New Zealand, Ltd.; Phoenix Assurance Company, Ltd.; Polaris-Norske SJO Insurance Company, Ltd.; Provincial Insurance Public Limited Company; Road Transport & General Insurance Company, Ltd.; Nippon Fire & Marine Insurance Company, Ltd.; Nippon Fire & Marine Insurance Company, Ltd. TLA/C.
Paul R. Koepff (argued), Paul M. Alfieri, O'Melveny & Myers, New York City, for Insurance Company of North America.
James A. Scarpone, Hellring, Lindeman, Goldstein & Siegal, Newark, NJ, Neal M. Glazer (argued), D'Amato & Lynch, New York City, Martin R. Baach, Bruce R. Grace, Nussbaum & Wald, Washington, DC, for Underwriters at Lloyd's of London; Bishopsgate Insurance Company; Insurance Company of Ireland; Threadneedle Insurance Company; Minister Insurance Company No. 3; Ocean Marine Insurance Company; Assicurzaioni Generali S.P.A.; British Law Insurance Company; Commercial Union Assurance Company, Ltd.; Excess Insurance Company, Ltd.; La Reunion Francaise S.A. D'Assurances; Northern Assurance Company, Ltd. Group; Scottish Lion Insurance Company, Ltd.; Andrew Weir Insurance Company, Ltd.; Minister Insurance Company, Ltd. No. 2A/C; Road Transport Insurance Company.
Joseph R. McDonough, Graham, Curtin & Sheridan, Morristown, NJ, for Yasuda Fire & Marine Company, (UK) Ltd.
Edward G. Madden, Jr., Mattson & Madden, Newark, NJ, for Protective Insurance Company.
Joseph L. Ruby, Wiley, Rein & Fielding, Washington, DC, for Travelers Indemnity Company.
Before: MANSMANN and LEWIS, Circuit Judges and DUPLANTIER, ** District Judge.
These related appeals involve a multi-party insurance dispute arising from a polluted oil transfer terminal, "Tankport," which sits on the western shore of upper New York Harbor in Jersey City, New Jersey. Appellants Ultramar America Limited and Ultramar Petroleum, Inc. (collectively "Ultramar") purchased Tankport from Appellant The Pittston Company ("Pittston"). As part of the purchase agreement, Pittston agreed to indemnify Ultramar for any environmental damage caused during Pittston's ownership of Tankport. Ultramar has since decommissioned Tankport and faces extensive environmental remediation costs. Although Ultramar and Pittston have settled the question of liability between them, they each seek relief from their respective insurance carriers. The district court granted summary judgment in favor of the insurers on all of Ultramar's claims and most of Pittston's claims.
On appeal, there are two primary questions before us. First, are Ultramar's and Pittston's claims for insurance coverage barred by the doctrine of known loss? Second, do Pittston's marine insurance policies preclude coverage for land-based pollution? We will conclude that both of the above questions should be answered in the negative. Accordingly, we will reverse.
The factual background of this case is set out thoroughly in the district court's extensive opinion. See Pittston Co. v. Allianz Ins. Co., 905 F.Supp. 1279 (D.N.J.1995). Here, we will repeat only those facts necessary to resolve these appeals. 1
In 1954, Pittston purchased the facility now known as Tankport from Standard Oil Company. Standard Oil had operated the facility as part of its "Eagle Works" petroleum refinery, but the facility had not been operating since the 1930s. When Pittston acquired ownership of the facility, it renamed it "Tankport" and began to operate it as an oil storage and transfer facility. Oil was brought in by barge to an attached pier,...
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