Rhone-Poulenc Basic Chemicals Co. v. American Motorists Ins. Co., RHONE-POULENC

• Decision Date: 04 March 1992
• Docket Number: RHONE-POULENC
• Citation: 606 A.2d 73
• Parties: BASIC CHEMICALS CO., a Delaware corporation, Defendant Below, Appellant, v. AMERICAN MOTORISTS INSURANCE CO., Plaintiff Below, Appellee. . Submitted:
• Court: Supreme Court of Delaware

Page 73

606 A.2d 73

RHONE-POULENC BASIC CHEMICALS CO., a Delaware corporation Defendant Below, Appellant, v. AMERICAN MOTORISTS INSURANCE CO., Plaintiff Below, Appellee.

Supreme Court of Delaware.

Submitted: March 4, 1992.

Decided: March 11, 1992. ¹

Upon application for interlocutory appeal. ACCEPTED.

Thomas R. Hunt, Jr. of Morris, Nichols, Arsht & Tunnell, Wilmington, for appellant.

Robert K. Beste of Biggs & Battaglia, Wilmington, for appellee.

Before HORSEY, MOORE and HOLLAND, JJ.

HOLLAND, Justice:

The defendant-appellant, Rhone-Poulenc Basic Chemicals Co. ("RPBC"), has petitioned this Court to accept an appeal from interlocutory orders of the Superior Court of the State of Delaware, in and for New Castle County, in Civil Action No. 87C-SE-11-1-CV. The interlocutory orders were entered on January 16, 1992 and January 31, 1992. The January 31, 1992 order denied RPBC's motion for reconsideration of Section 5.B. of the January 16, 1992 order.

The plaintiffs in the Superior Court sought a declaratory judgment that they were not obligated under their respective comprehensive general liability policies to defend or indemnify RPBC in three law suits which alleged environmental damage, resulting in part from RPBC's disposal of waste at Tybouts Corner landfill ("Tybouts Corner") in New Castle, Delaware. In Section 5.B. of the January 16 order, the Superior Court granted the motion of American Motorists Insurance Company ("AMICO") for summary judgment on the duty to indemnify RPBC "insofar as it seeks judgment that AMICO is not obligated to indemnify [RPBC] in the USA and Wagner actions for [the cost of measures taken or to be taken in order to prevent the further release of contaminants from Tybouts.]"

RPBC contends that certification of this interlocutory appeal is appropriate, pursuant to Supreme Court Rule 42(b), because Section 5.B. of the January 16 order: (1) determines a substantial issue; (2) established AMICO's legal right to deny coverage for indemnification; (3) involves a question of law of first instance in this State; and because (4) review of the interlocutory order will serve considerations of justice and judicial economy. See Supr.Ct.R. 42.

RPBC is correct in its assertion that, for certification of an interlocutory order, Supreme Court Rule 42(b) requires that the order determine a substantial issue. According to RPBC, in Section 5.B. of the January 16 order, the Superior Court resolved a substantial issue, i.e., that AMICO may enforce its "reasonable steps" provision, contained in the "Conditions" section of the insurance policies, as an exclusion to coverage for "damages" otherwise covered. See State Farm Mutual Ins. Co. v. Abramowicz, Del.Supr., 386 A.2d 670 (1978).

RPBC is also correct that a second requirement for certification of an interlocutory appeal pursuant to Supreme Court Rule 42(b) is that the order establish a legal right. RPBC argues that Section 5.B. of the January 16 order not only determined that AMICO could enforce its "reasonable steps" provision as an exclusion to otherwise covered "damages" but also established AMICO's legal right (and entered summary judgment accordingly) to deny coverage to RPBC for damages incurred by RPBC in the underlying USA and Wagner actions, if such damages reflect "the cost of measures taken or to be taken in order to prevent the further release of contaminants from Tybouts." See Equitable Life Assurance Soc'y of the United States v. Young & Revel, Inc., Del.Supr., 250 A.2d 509 (1969); Phillips v. Liberty Mut. Ins. Corp., Del.Supr., 232 A.2d 101 (1967).

Supreme Court Rule 42(b) requires not only that the interlocutory order determine a substantial issue and establish a legal right, but also that it meet one or more of the criteria set forth in Supreme Court Rule 42(b)(i) through (v). Supreme Court Rule 42(b)(i) incorporates by reference "the criteria applicable to proceedings for certification of questions of law set forth in Rule 41." Supr.Ct.R. 42(b)(i). According to RPBC, Section 5.B. of the January 16 order satisfies the criterion of Supreme Court Rule 41(b)(i), which provides for certification of a question of law if "[t]he question of law is of first instance in this State." Supr.Ct.R. 41(b)(i). The parties are in apparent agreement that Section 5.B. of the Superior Court's January 16, 1992 order involves a question of law of first instance in this State.

Supreme Court Rule 42(b)(v) also provides that certification is appropriate if "[a] review of the interlocutory order may terminate the litigation or may otherwise serve considerations of...