RT Vanderbilt Co. v. Continental Cas. Co.

• Decision Date: 26 April 2005
• Docket Number: No. 17178.,17178.
• Citation: 870 A.2d 1048,273 Conn. 448
• Parties: R.T. VANDERBILT COMPANY, INC. v. CONTINENTAL CASUALTY COMPANY et al.
• Court: Connecticut Supreme Court

870 A.2d 1048

273 Conn. 448

R.T. VANDERBILT COMPANY, INC. v. CONTINENTAL CASUALTY COMPANY et al.

No. 17178.

Supreme Court of Connecticut.

Argued November 22, 2004.

Decided April 26, 2005.

Francis J. Brady, Hartford, with whom were Marilyn B. Fagelson, New Haven, and, on the brief, David L. Elkind, pro hac vice, for the appellant (plaintiff).

Joel M. Fain, with whom were Trenton C. Haas, Hartford, and Charles A. Booth, pro hac vice, for the appellee (named defendant).

SULLIVAN, C.J., and BORDEN, KATZ, PALMER and VERTEFEUILLE, Js.

SULLIVAN, C.J.

The plaintiff, R.T. Vanderbilt Company, Inc., appeals from the judgment of the trial court rendering summary judgment in favor of the named defendant,¹ Continental Casualty Company. The plaintiff's sole claim on appeal is that the trial court improperly held that a potentially responsible party (PRP) letter, issued by the United States Environmental Protection Agency (EPA) pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA), 42 U.S.C. § 9601 et seq., and the Resource Conservation and Recovery Act, 42 U.S.C. § 6973, does not constitute a "suit" within the meaning of a comprehensive general liability insurance policy and therefore does not trigger the insurer's duty to defend. We agree and, accordingly, reverse the judgment of the trial court.

The record reveals the following facts and procedural history. The plaintiff owns a chemical manufacturing facility in Bethel and disposed of industrial wastes produced at that facility at the Solvents Recovery Service of New England (Solvents Recovery Service) site and at the Old Southington Landfill site, both located in Southington.² On June 11, 1992, the plaintiff received a letter from the EPA explaining that it was a PRP for environmental contamination at the Solvents Recovery Service site³ under §§ 106(a) and 107(a) of CERCLA, 42 U.S.C. §§ 9606(a) and 9607(a), and under § 7003 of the Resource Conservation and Recovery Act, 42 U.S.C. § 6973. On January 21, 1994, the plaintiff received a similar letter from the EPA explaining that it was also a PRP for environmental contamination at the Old Southington Landfill site⁴ pursuant to the same statutory provisions. These PRP letters informed the plaintiff that the EPA had "documented the release and threatened release of hazardous substances, pollutants and contaminants" at the Solvents Recovery Service and the Old Southington Landfill sites and had already spent a significant amount of money on response actions.⁵ They further "requested" the plaintiff's "voluntary" participation in undertaking cleanup activities at these sites and demanded payment for past and future response costs, plus interest.⁶ Each PRP letter was marked "URGENT LEGAL MATTER — PROMPT REPLY NECESSARY" and the EPA requested a response to each letter within thirty days.⁷ Each PRP letter further notified the plaintiff that "[t]he factual and legal discussions in this letter are intended solely to provide notice and information, and such discussions are not to be construed as a final agency position on any matter set forth herein."

The defendant had issued various comprehensive general liability insurance policies to the plaintiff for the time period between January 1, 1965, and March 3, 1977.⁸ At issue in this appeal are two policies: (1) a policy spanning the time period from January 1, 1965, until January 1, 1968 (1965 policy); and (2) a policy spanning the time period from January 1, 1968, until January 1, 1971 (1968 policy). The 1965 policy provides in relevant part: "With respect to such insurance as is afforded by this policy, the company shall: (a) defend any suit against the insured alleging such injury, sickness, disease or destruction and seeking damages on account thereof, even if such suit is groundless, false or fraudulent; but the company may make such investigation, negotiation and settlement of any claim or suit as it deems expedient...." (Emphasis added.) The 1968 policy provides in relevant part: "The company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of A. bodily injury or B. property damage to which this insurance 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, and may make such investigation and settlement of any claim or suit as it deems expedient, but the company shall not be obligated to pay any claim or judgment or to defend any suit after the applicable limit of the company's liability has been exhausted by payment of judgments or settlements." (Emphasis added.) The term suit is not defined in either policy.

The plaintiff notified the defendant that it had received the PRP letters and requested defense and indemnification under the relevant policies. The defendant responded that "although it appears there is no coverage ... for several reasons ... [we] will contribute to [the plaintiff's] defense of those two matters, pursuant to a complete reservation of all rights" because the losses at the Solvents Recovery Service and the Old Southington Landfill sites "may at least potentially implicate certain years of coverage...." Thereafter, the defendant ceased communications with the plaintiff concerning its alleged entitlement to indemnification and defense costs.

The plaintiff thereafter filed the present action seeking, inter alia, a judgment declaring the defendant's obligation to defend the plaintiff and damages for the defendant's breach of its contractual duty to defend the plaintiff in the Solvents Recovery Service and the Old Southington Landfill administrative actions pursuant to multiple comprehensive general liability insurance policies issued by the defendant to the plaintiff between January 1, 1965, and March 3, 1977.⁹ Subsequently, the plaintiff filed a motion for partial summary judgment and the defendant filed a cross motion for summary judgment concerning the defendant's duty to defend the plaintiff under the 1965 and 1968 policies.¹⁰

The trial court rendered summary judgment in favor of the defendant. In its memorandum of decision, the trial court concluded that the defendant had no duty to defend the plaintiff in the Solvents Recovery Service and in the Old Southington Landfill administrative actions because a PRP letter issued by the EPA is not a suit as that term is used in the 1965 and 1968 comprehensive general liability policies. Specifically, the trial court held that: (1) "the term `suit' denotes court proceedings"; (2) "limiting the term `suit' to proceedings involving a court complaint makes it possible to apply the rule that the duty to defend is `measured by the allegations in the complaint'"; (3) "employing a bright line definition of `suit' limited to court proceedings is practical and reasonable"; and (4) "[i]nterpreting `suit' to mean a proceeding filed in court helps preserve a distinction between the terms `claim' and `suit' used in these policies." Thereafter, the plaintiff withdrew all remaining counts of the complaint unrelated to the defendant's duty to defend, the trial court rendered judgment in favor of the defendant and the plaintiff appealed.¹¹

As a preliminary matter, we set forth the appropriate standard of review. "In seeking summary judgment, it is the movant who has the burden of showing the nonexistence of any issue of fact. The courts are in entire agreement that the moving party for summary judgment has the burden of showing the absence of any genuine issue as to all the material facts, which, under applicable principles of substantive law, entitle him to a judgment as a matter of law." (Internal quotation marks omitted.) Allstate Ins. Co. v. Barron, 269 Conn. 394, 405, 848 A.2d 1165 (2004). "Our review of the trial court's decision to grant [a] motion for summary judgment is plenary." (Internal quotation marks omitted.) Id., at 406, 848 A.2d 1165. Moreover, "[c]onstruction of a contract of insurance presents a question of law for the court which this court reviews de novo." (Internal quotation marks omitted.) Galgano v. Metropolitan Property & Casualty Ins. Co., 267 Conn. 512, 519, 838 A.2d 993 (2004).

The plaintiff argues that the term suit in the 1965 and 1968 comprehensive general liability insurance policies is ambiguous because it has two general meanings: (1) "`an action to secure justice in a court of law'"; or (2) "`an attempt to recover a right or claim through legal action.'" The plaintiff argues that because, under Connecticut law, ambiguity in the language of an insurance policy is construed in favor of coverage, and because the second definition of the term suit is broad enough to encompass an EPA administrative action initiated by a PRP letter, we must construe the ambiguity in the language of the policy in favor of the defendant's duty to defend. The defendant counters that the term suit is unambiguous, that its natural and ordinary meaning is limited to "an action filed in a court of law," and, accordingly, that the defendant has no duty to defend. We agree with the plaintiff.

To provide context for our analysis of the plaintiff's claim, we begin with a brief overview of relevant CERCLA provisions. CERCLA was enacted in 1980 and provides the federal government with "a mechanism for cleanup of existing hazardous waste sites, and it does so essentially by permitting the government either to order a responsible party to clean up the polluted site or to clean up a site itself and obtain reimbursement from the responsible party. It also makes the responsible party liable for damages to the environment and for costs such as litigation expenses and attorney fees."¹² 21 E. Holmes, Appleman on Insurance 2d (2002) § 132.6[4], p. 116.

CERCLA imposes strict liability and joint...