Prime Tanning Co. Inc. v. Liberty Mut. Ins. Co.
| Decision Date | 10 November 2010 |
| Docket Number | No. CV–09–359–B–W.,CV–09–359–B–W. |
| Citation | 750 F.Supp.2d 198 |
| Parties | PRIME TANNING CO., INC. and Prime Tanning Corp., Plaintiffs,v.LIBERTY MUTUAL INSURANCE CO., Defendant. |
| Court | U.S. District Court — District of Maine |
OPINION TEXT STARTS HERE
James D. Poliquin, Norman, Hanson & Detroy, Portland, ME, for Plaintiffs.John C. Sullivan, Post & Schell, P.C., Philadelphia, PA, Michael Richards, Law Office of Robert S. Hark, Portland, ME, for Defendant.
ORDER ON MOTIONS FOR SUMMARY JUDGMENT
Prime Tanning Co., Inc. and Prime Tanning Corp. (Prime Tanning) and Liberty Mutual Insurance Co. (Liberty Mutual) filed cross-motions for summary judgment on whether Liberty Mutual has a duty to defend Prime Tanning against civil actions pending in Missouri (the Missouri Suits); Liberty Mutual also moves for summary judgment on whether it has a duty to indemnify Prime Tanning in the Missouri Suits.1 Because the allegations in the Missouri Suits' complaints foreclose coverage under the policies, the Court finds Liberty Mutual has neither a duty to defend nor to indemnify and grants Liberty Mutual's motions.2
I. STATEMENT OF FACTSA. The Dispute
From at least 1983 through early 2009, Prime Tanning owned and operated a leather tanning facility in St. Joseph, Missouri through its subsidiary, The Blueside Companies, Inc. Prime Tanning's Statement of Material Facts ¶ 2 (Docket # 25) ( PSMF ).3 The leather tanning process uses chemicals to remove hair from animal hides, which in turn generates a sludge byproduct. Id. ¶ 3.4 Prime Tanning spread its byproduct on farms in several counties throughout Missouri beginning in 1983 and continuing until early 2009. Id. ¶¶ 2–4.
Between August 21, 2008 and June 8, 2009, nine Missouri farm owners sued Prime Tanning for damages arising from its tanning activities. Prime Tanning Compl. ¶ 5; see also Bicket Compl. Attach. 2; Fife Compl. Attach. 4; C. Gardner Compl. Attach. 6; M. Gardner Compl. Attach. 8; Helms Compl. Attach. 10; Kemper Compl. Attach. 13; Long Compl. Attach. 16; Nicholson Compl. Attach. 18; Reid Compl. Attach. 19 (Docket # 23) 5. Prime Tanning notified Liberty Mutual of each suit; Liberty Mutual denied that it had a duty to defend or indemnify Prime Tanning. PSMF ¶ 37. On July 17, 2009, Prime Tanning filed a declaratory judgment action in Maine Superior Court against Liberty Mutual, claiming that Liberty Mutual breached the insurance contract when it refused to defend Prime Tanning. Prime Tanning Compl. While the Maine action was pending, additional parties filed similar claims against Prime Tanning. PSMF ¶ 1. Liberty Mutual refused to defend these suits as well. Id. ¶ 37.
Prime Tanning removed the case to this Court on August 10, 2009. Notice of Removal (Docket # 1). On April 12, 2010, Prime Tanning filed a Motion for Partial Summary Judgment, asking the Court to find that Liberty Mutual had a duty to defend it in the Missouri Suits. Prime Tanning's Mot. for Partial Summ. J. (Docket # 26) ( Prime Tanning's Mot.). The next day, Liberty Mutual moved for summary judgment, claiming it had no duty to defend or indemnify Prime Tanning. Liberty Mutual's Mot. for Summ. J. (Docket # 30); Mem. of Law in Support of Liberty Mutual's Mot. for Summ. J. Attach 1 (Docket # 30) ( Liberty Mutual's Mem.). On May 3, 2010, Liberty Mutual responded to Prime Tanning's motion. Liberty Mutual's Resp. to Prime Tanning's Mot. for Partial. Summ. J. (Docket # 33) ( Liberty Mutual's Resp. to Prime Tanning's Mot.). On May 4, Prime Tanning responded to Liberty Mutual's second motion. Prime Tanning's Resp. to Liberty Mutual's Mot. for Summ. J. (Docket # 34) ( Prime Tanning's Resp. to Liberty Mutual's Mot.). On May 18, Prime Tanning replied to Liberty Mutual's response to its motion. Prime Tanning's Reply in Support of Mot. for Partial Summ. J. (Docket # 37) ( Prime Tanning's Reply to Liberty Mutual's Resp.). On the same day, Liberty Mutual replied to Prime Tanning's response to its second motion. Reply of Liberty Mutual in Support of Mot. for Summ. J. (Docket # 39) ( Liberty Mutual's Reply to Prime Tanning's Resp.). On May 20, 2010, the parties jointly moved for oral argument. Joint Mot. for Oral Argument (Docket # 40). The Court granted the motion on June 7, 2010. Order Granting Mot. for Oral Argument (Docket # 41). The Court held oral argument on July 20, 2010.
B. The Policy
Between May 1, 1977 and July 1, 1979, and again between July 1, 1980 and July 1, 1985, Liberty Mutual issued annual “Comprehensive General Liability Insurance” policies to Prime Tanning Co., Inc., Prime International Corporation, and The Blueside Companies, Inc. Liberty Mutual's Comprehensive General Liability Policy Issued to Prime Tanning Attachs. 22–28 (Docket # 23) ( Policies ).6 If the injury or damage giving rise to the Missouri Suits falls within the general coverage outlined in Section I of the policies, Liberty Mutual has a duty to defend Prime Tanning. Section I states, in relevant part, that
[t]he company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of
Coverage A. bodily injury or
Coverage B. property damage
to which this policy applies, caused by an occurrence, and the company shall have the right and duty to defend any suit against the insured seeking damages on account of such bodily injury or property damage, even if any of the allegations of the suit are groundless, false or fraudulent....
Policies at 16. The parties do not dispute that Prime Tanning's conduct caused damage or injury which falls within the general coverage of the policies.7 The complaints plainly allege either “bodily injury” or “property damage” arising out of an “occurrence.” See Prime Tanning's Mot. at 7 (); Liberty Mutual's Mem. at 1 ().
The policies include an exclusion that removes certain pollution damage from the general coverage. The “pollution exclusion” specifies that the policies do not apply
to bodily injury or property damage arising out of the discharge, dispersal, release or escape of smoke, vapors, soot, fumes, acids, alkalis, toxic chemicals, liquids or gases, waste materials or other irritants, contaminants or pollutants into or upon land, the atmosphere or any water course or body of water....
Policies at 16. The pollution exclusion, however, has its own limiting exception: the policies provide coverage if such “discharge, dispersal, release or escape is sudden and accidental.” Id. In other words, if the pollution exclusion denies general coverage under the policies, Liberty Mutual does not have a duty to defend Prime Tanning unless the “sudden and accidental” exception to the exclusion applies.C. The Missouri Suits
The parties agree in their briefs and conceded at oral argument that all the Missouri Suits are substantially the same and any differences do not impact coverage. Liberty Mutual's Mem. at 4; Prime Tanning's Mot. at 4. Although some complaints frame the factual allegations in somewhat different terms, all the petitions read along the following lines:
7. [Prime Tanning] owned and operated a leather tanning Facility ... in St. Joseph, Missouri ... until the first quarter of 2009....
...
9. Hexavalent chromium is a toxic chemical and is classified as a known human cancer causing agent.
10. From at least 1983 through early 2009, Prime utilized hexavalent chromium to remove hair from its hides in the tanning process. The waste product from this process was collected as “sludge” that contains hexavalent chromium.
...
12. ... Prime represented to the State of Missouri that the Prime sludge did not contain hexavalent chromium when in fact such sludge did contain hexavalent chromium.
13. From at least 1983 through early 2009, Prime hauled thousands of tons of sludge containing hexavalent chromium to Missouri farms, including farms in Andrew, Buchanan, DeKalb and Clinton counties, and applied thousands of tons of sludge containing hexavalent chromium to such farms with a spreader. The sludge was applied free of charge to farmers as fertilizer so that Prime could avoid the costs of landfilling the sludge.
14. The sludge applied to the fields in Missouri contains hazardous levels of hexavalent chromium that is above acceptable limits of human exposure. Portions of the sludge became airborne in the application process.
...
18. As a direct and proximate result of Defendants' negligence and strict liability, [the plaintiff] has and will continue to suffer severe, permanent, and progressive injuries and damages.
M. Gardner Compl. Attach. 8 ¶¶ 7, 9–10, 12–14, 18 (Docket # 23). See also Bicket 1st Am. Compl. Attach. 3 ¶¶ 11, 33–34, 36–38, 42 ( Bicket Compl.), Fife Compl. Attach. 4 ¶¶ 11, 33–34, 36–38, 42, C. Gardner Am. Compl. Attach. 6 ¶¶ 32, 34–35, 37–39, 41–42, Helms Am. Compl. Attach. 10 ¶¶ 32, 34–35, 37–39, 41, Meyer Compl. Attach. 17 ¶¶ 33–34, 36–38, 42, Nicholson Compl. Attach. 18 ¶¶ 15–16, 18–20, Reid Compl. Attach. 19 ¶¶ 33–34, 36–38, 42 (Docket # 23).8 All the complaints base their claims on some form of negligence and strict liability.9
II. DISCUSSIONA. The Parties' Positions
Prime Tanning recognizes that the familiar pleading comparison test in which the allegations in the complaint are compared to the provisions of the insurance policy determines whether there is a duty to defend under both Maine and Missouri law. Prime Tanning's Mot. at 11, 15 (citing Penney v. Capitol City Transfer, 1998 ME 44, 707 A.2d 387, 388; Truck Ins. Exchange v. Prairie Framing, LLC, 162 S.W.3d 64, 80 (Mo.App.2005)). Prime Tanning argues that the duty to defend depends on whether there is any potential basis for coverage, including grounds not raised by the complaints, not on whether the “factual...
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