St. Paul Fire & Marine Ins. Co., Inc. v. McCormick & Baxter Creosoting Co.
| Decision Date | 09 March 1994 |
| Citation | 870 P.2d 260,126 Or.App. 689 |
| Parties | ST. PAUL FIRE & MARINE INSURANCE COMPANY, INC., and St. Paul Mercury Insurance Company, Inc., Respondents, v. McCORMICK & BAXTER CREOSOTING CO., Appellant, National Continental Insurance Company, successor to American Star Insurance Company by change of name; Consolidated American Insurance Company; Hartford Accident & Indemnity Company; Certain Underwriters at Lloyd's, London; United States Fire Insurance Company; Continental Casualty Company; Gulf Insurance Company, Respondents, and Boston Insurance Company; Mission Insurance Company (in liquidation); Mission National Insurance Company (in liquidation); National Union Fire Insurance Company of Pittsburgh, Pennsylvania; Scottsdale Insurance Company, Defendants. McCORMICK & BAXTER CREOSOTING CO., Cross-Complainant--Appellant, v. ST. PAUL FIRE & MARINE INSURANCE COMPANY, INC., and St. Paul Mercury Insurance Company, Inc., National Continental Insurance Company, successor to American Star Insurance Company by change of name; Consolidated American Insurance Company; Hartford Accident & Indemnity Company; Certain Underwriters at Lloyd's, London; United States Fire Insurance Company; Continental Casualty Company; Gulf Insurance Company; National Fire Insurance Company of Hartford, Cross-Defendants--Respondents, and Boston Insurance Company; Mission Insurance Company (in liquidation); Mission National Insurance Company (in liquidation), Cross-Defendants. A8711-07096; CA A71072. |
| Court | Oregon Court of Appeals |
Barry S. Levin, San Francisco, California, argued the cause for appellant. With him on the briefs were Celia M. Jackson and Susan M. Leberman, San Francisco, California, Paul R. Gary, G. Frank Hammond and Heller, Ehrman, White & McAuliffe, Portland.
Peter R. Chamberlain, Portland, argued the cause for respondent Hartford Acc. & Indem. Co. With him on the brief were Barry M. Mount, Richard A. Lee and Bodyfelt Mount Stroup & Chamberlain, Portland.
David M. Jacobi, Seattle, WA, argued the cause for respondents U.S. Fire Ins. Co., Consol. American Ins. Co., Nat. Continental Ins. Co. and Gulf Ins. Co. With him on the brief for respondent U.S. Fire Ins. Co. were Janet E. McKinnon and Wilson, Smith, Cochran & Dickerson, Seattle, WA, George M. McKallip and Kennedy, King & Zimmer, Portland, for respondent Consol. American Ins. Co. and Nat. Ins. Co., and Mildred J. Carmack, Jay T. Waldon, David E. Prange and Schwabe, Williamson & Wyatt, Portland, for respondent Gulf Ins. Co.
Thomas A. Gordon, Portland, argued the cause for cross-defendants--respondents St. Paul Fire & Marine Ins. Co., Inc., and St. Paul Mercury Ins. Co., Inc. James T. Waldron, Portland, argued the cause for cross- defendants--respondents Continental Casualty Company, Gulf Ins. Co., Certain Underwriters at Lloyd's, London, and National Fire Ins. Co. of Hartford. On the brief were I. Franklin Hunsaker, Thomas A. Gordon, Roger Westendorf and Bullivant, Houser, Bailey, Pendergrass & Hoffman, Portland, and Jeffrey L. Fillerup, Robin Craig-Olson and Adams, Duque & Hazeltine, San Francisco, CA, for cross-defendants--respondents St. Paul Fire & Marine Ins. Co., Inc., and St. Paul Mercury Ins. Co., Inc.; George W. McKallip, Garr M. King and Kennedy, King & Zimmer, Portland, for cross-defendants--respondents Nat. Continental Ins. Co. and Consolidated American Ins. Co.; Paul D. Nelson, Michael A. Gevertz and Hancock, Rothert & Bunshoft, San Francisco, CA, and F. Scott Farleigh, Karen S. Stayer and Farleigh, Wada & Witt, Portland, for cross-defendant--respondent Certain Underwriters at Lloyd's, London; Barry M. Mount, Peter R. Chamberlain, Richard A. Lee and Bodyfelt Mount, Stroup & Chamberlain, Portland, for cross-defendant--respondent Hartford Acc. and Indem. Co.; David J. Jacobi and Wilson, Smith, Cochran & Dickerson, Seattle, WA, for cross-defendant--respondent U.S. Fire Ins. Co.; and Mildred J. Carmack; David E. Prange, James T. Waldron and Schwabe, Williamson & Wyatt, Portland, for cross-defendants--respondents Continental Cas. Co., Certain Underwriters at Lloyd's Subscribing to Certificate No. 10010 and National Fire Ins. Co. of Hartford.
Rick T. Haselton and Lindsay, Hart, Neil & Weigler, Portland, filed a brief amicus curiae for Associated Oregon Industries.
Jeffrey V. Hill, Bradford H. Lamb and Zarosinski & Hill, Portland, filed a brief amicus curiae for Aetna Cas. & Sur. Co.
Before ROSSMAN, P.J., and De MUNIZ and LEESON, * JJ.
De MUNIZ, Judge.
Plaintiffs and cross-defendants St. Paul Fire & Marine Insurance Company, Inc., and St. Paul Mercury Insurance Company, Inc. (St. Paul), brought this declaratory judgment action against their insured McCormick & Baxter (M & B). St. Paul sought a declaration that there is no coverage under St Paul's liability insurance contracts for costs incurred by M & B in investigating and correcting environmental contamination resulting from its operations in Oregon and California. St. Paul included as defendants the insurance companies that had issued liability insurance contracts to M & B, seeking a declaration that, if coverage does exist under St. Paul's contracts, it also exists under the insurance contracts issued by those companies. M & B then filed a cross-complaint against all of the insurance companies 1 seeking damages for breach of contract and a declaration that the companies have a duty to defend M & B in environmental administrative proceedings and to indemnify it for its environmental cleanup costs. 2
On two different sets of motions for summary judgment, the court held that M & B did not have coverage. The trial court granted summary judgment to St. Paul, Continental Casualty Company (Continental), National Continental Insurance Company (National Continental), National Fire Insurance Company of Hartford (National Fire) and Certain Underwriters at Lloyd's, London (Lloyds), the insurers that had insured M & B from 1949 through 1970, on the ground that the damage had not manifested itself until after the period of coverage. The court granted summary judgment to Hartford Accident & Indemnity Company (Hartford), St. Paul and National Fire on the ground that, under policies issued in the 1950's, no "accident" took place as required by the contracts. The court granted summary judgment to Consolidated American Insurance Company (Consolidated), Gulf Insurance Company (Gulf), and United States Fire Insurance Company (U.S. Fire), the insurers that had issued policies to M & B from 1970 through 1985, 3 on the ground that the policies contained pollution exclusions that barred coverage. The court also held that, as to the Stockton, California, site, Oregon law applied.
The effect of the court's rulings is that M & B had no insurance coverage for continuous environmental damage until the damage became manifest, but by that time, changes in policy language excluded any coverage for such damage. M & B challenges those rulings. We affirm in part and reverse in part.
M & B has operated wood treatment plants continuously since 1942 in Stockton and since 1945 in Portland. For almost the entire period of the company's operation, M & B purchased standard form comprehensive general liability insurance policies from a series of insurance companies. M & B treats a variety of products, including utility poles, railroad ties, marine pilings and dimensional lumber. The treatment includes use of pentachlorophenol, creosote and heavy metal salts, including arsenic, chromium and copper. As a result of its operations at both facilities, chemicals have leached into the soil and contaminated the soil and groundwater.
Much of the damage was caused by leaching from "surface impoundments," which were uncovered pits that stored the waste. M & B used surface impoundments from 1967 to 1971 in Portland and from 1942 to 1978 in Stockton. Surface impoundments were standard in the industry and were believed to hold the waste and permit liquids to evaporate over time. In the late 1970's, it was learned that, within a year after the initial use of surface impoundments, contaminants leached from them through layers of soil and into the groundwater.
There was additional damage at the Portland facility, caused by overflow from storage tanks, equipment failures, including ruptured pipes and broken valves, and storm runoff from products and equipment that were coated with preservatives. Additionally, during all phases of the operations, the preservatives dripped and spilled onto unprotected soil. There was evidence that damage had occurred in every year from 1942 to 1986.
In 1974, M & B began working with the California Regional Water Quality Control Board to develop a plan for treatment of waste water at the Stockton site. In 1978, M & B agreed to a Consent Order requiring cleanup and abatement. After an inspection of the Stockton plant in 1983, the California Department of Health Services found that M & B had violated the California Hazardous Waste Control Act. Those agencies indicated that M & B would face civil and criminal penalties if it did not clean up the contaminated soil and groundwater. M & B agreed to do so in a July, 1984, Consent Decree.
In 1983, M & B notified the Oregon Department of Environmental Quality (DEQ) that there was soil and groundwater contamination at the Portland site. DEQ and M & B met on a regular basis and, in 1987, they executed a Consent Decree under which M & B was to clean up the contamination. In 1988, after paying over $2,000,000 in investigation and cleanup costs, M & B filed a Chapter 11 bankruptcy proceeding. In 1990, the bankruptcy court approved a reorganization plan under which M & B remained responsible for cleaning up its California and Oregon facilities.
Our review of a summary judgment is to determine whether the moving party has met its burden to show that there are no material issues of fact and that the moving party is entitled to...
To continue reading
Request your trial
-
Century Indem. Co. v. Marine Grp., LLC
...and/or paying the costs of clean up.” (St. Paul's Response Memo at 24.) Defendants cite St. Paul Fire & Marine Ins. Co., Inc. v. McCormick & Baxter Creosoting Co., 126 Or.App. 689, 870 P.2d 260 (1994), wherein the Oregon Court of Appeals held generally that administrative proceedings may qu......
-
Alabama Plating Co. v. U.S. Fidelity and Guar. Co.
...States Pollution Control, Inc., 717 F.Supp. 765 (W.D.Okla.1989) (applying Oklahoma law); St. Paul Fire & Marine Ins. Co. v. McCormick & Baxter Creosoting Co., 126 Or.App. 689, 870 P.2d 260 (1994); Gerrish Corp. v. Universal Underwriters Ins. Co., 754 F.Supp. 358 (D.Vt.1990), aff'd, 947 F.2d......
-
Montrose Chemical Corp. v. Admiral Ins. Co., S026013
...under standardized occurrence-based CGL policies include the Oregon Court of Appeals (St. Paul Fire & Marine Ins. Co. v. McCormick & Baxter Creosoting Co. (1994) 126 Or.App. 689, 870 P.2d 260, 264-265), and the United States District Court for the District of Delaware (Harleysville Mut. Ins......
-
Certain Underwriters At Lloyd's London And Excess Ins. Co. v. Mass. Bonding And Ins. Co. Succeeded In Interest By Hanover Ins. Co., 030403995
...an insurer's duty to defend.” Schnitzer Investment Corp., 197 Or.App. at 155, 104 P.3d 1162 (citing St. Paul Fire v. McCormick & Baxter Creosoting, 126 Or.App. 689, 700-01, 870 P.2d 260, modified on recons., 128 Or.App. 234, 875 P.2d 537 (1994), aff'd in part, rev'd in part on other grounds......