The Goodyear Tire & Rubber Co. v. the Aetna Casualty & Surety Co.
| Decision Date | 24 January 2001 |
| Docket Number | 19121,01-LW-0193 |
| Parties | THE GOODYEAR TIRE & RUBBER COMPANY, et al., Appellants v. THE AETNA CASUALTY & SURETY COMPANY, et al., Appellees C.A. |
| Court | Ohio Court of Appeals |
APPEAL FROM JUDGMENT ENTERED IN THE COURT OF COMMON PLEAS COUNTY OF SUMMIT, OHIO CASE NO. CV 93 09 3226
Appellant, Goodyear Tire & Rubber Company ("Goodyear"), appeals from a judgment of the Summit County Court of Common Pleas on some of its claims for declaratory judgment against several insurance carriers from which it sought defense and indemnity coverage. Summary judgment was granted to several defendants; others were granted directed verdicts. This Court affirms in part and reverses in part.
On September 29, 1993, Goodyear brought this action against more than fifty insurance companies based on comprehensive general liability ("CGL") insurance policies it held from 1949 through the middle of 1985. Goodyear sought, among other things, a declaration that these defendants had the duty to defend and/or indemnify it against environmental clean-up actions brought under the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"). The CERCLA actions stemmed from environmental contamination caused by the waste disposal practices of Goodyear and some of its subsidiaries at numerous disposal sites around the country.
During the next several years, lengthy discovery ensued and numerous pretrial motions were filed and ruled upon, one of which was affirmed on appeal to this Court in Goodyear Tire & Rubber Co. v. Aetna Casualty and Surety Co. (July 12, 1995), Summit App. No. 16993, unreported. Numerous claims, defendants, and specific insurance policies were disposed of through pretrial motions. Although Goodyear sought defense and indemnity coverage for its liability at several disposal sites, the parties agreed to limit the evidence at the first trial to two of the disposal sites: the Army Creek Landfill in New Castle, Delaware and the Motor Wheel disposal site (also known as the Lake Lansing Road disposal site) in Lansing, Michigan. Goodyear's liability at each of these sites stemmed from the disposal practices of Motor Wheel Corporation, a former subsidiary of Goodyear.
Goodyear purchased Motor Wheel Corporation of Michigan ("Motor Wheel") in January 1964, and continued to operate the business until 1981 as a newly formed Ohio corporation. Motor Wheel manufactured automotive wheels, tailpipes, tubing, and brake parts at one plant in Newark, Delaware and at three plants in Lansing, Michigan.
The Motor Wheel disposal site was located less than a mile from one of Motor Wheel's plants in Lansing, Michigan. Motor Wheel purchased the site in 1938 and disposed of plant wastes there until the late 1970s. Materials were hauled to the site in trucks and dumped onto the ground or into ponds. Among the wastes disposed there during the 1940s, and maybe longer,[1] was a vapor degreaser solvent, trichlorethylene ("TCE"), that Motor Wheel used to clean grease and oil from machine parts. It was commonly believed at that time that the TCE would evaporate. It was discovered years later, however, that TCE could degrade into vinyl chloride, a known carcinogen, and that it could seep into the groundwater.
The Motor Wheel site became the target of investigations by the Michigan Department of Natural Resources during the 1970s. Investigations by the United States Environmental Protection Agency ("EPA") began in the early 1980s, shortly after the passage of CERCLA. Motor Wheel admitted to the EPA in 1981 that it had disposed of a variety of wastes at the site. It was eventually determined that approximately twenty companies, including Motor Wheel, had dumped wastes there. The primary polluters, however, were the Motor Wheel plant and a fertilizer plant owned by W.R. Grace Company. Goodyear's liability for the clean up of the site stemmed from its disposal of TCE. On June 26, 1987, Goodyear entered into a negotiated settlement with W.R. Grace Company and the EPA. At the time of trial, Goodyear had spent $11,612,900 for investigation and clean-up costs and the clean up was not yet complete. Goodyear was seeking insurance coverage for these costs, some of which dated back to the late 1970s, as well as for future costs that it would incur to complete the remediation of the Motor Wheel site.
During the 1960s, employees of Motor Wheel's Newark, Delaware plant disposed of the general plant trash, including pallets and office and cafeteria trash, in a dumpster outside the plant. Plant employees would also pour phosphate sludge into the same dumpster. Phosphate sludge was the byproduct of Motor Wheel's process of phosphatizing wheel rims, a process it began at the Newark plant in 1964. AmChem, the supplier of Granodine 16, the chemical product used in the phosphatizing process, had assured Motor Wheel employees that the sludge was safe and that they could even use it as fertilizer on their gardens.
The trash in the dumpster was hauled away by a licensed trash hauler, Twardus and Sons. Motor Wheel representatives testified that, at the time, they had no idea at where Twardus and Sons disposed of the trash. They had assumed that the trash went to a landfill, but they did not know the identity or location of the landfill.
Army Creek became a target of CERCLA remedial efforts during the early 1980s. The EPA first contacted Goodyear through a letter dated December 19, 1984, which sought information about Goodyear's release of hazardous substances at either Army Creek or another Delaware landfill. Goodyear could not immediately determine whether Motor Wheel had sent plant trash to Army Creek, as there were no written records to that effect. Eventually, Goodyear was able to determine that the general plant trash from Motor Wheel's Newark plant had been hauled to the Army Creek Landfill until it closed in 1968.
Goodyear was eventually identified as a potentially responsible party for the clean up at Army Creek. Iron contamination of the groundwater was determined to be partially the result of Motor Wheel's disposal of phosphate sludge in the landfill from 1964 until the landfill closed in 1968. Goodyear negotiated a settlement with other potentially responsible parties and the EPA. Goodyear's share of the cleanup costs was 3.2 percent. By early 1994, Goodyear's role in the remediation effort at Army Creek was completed. Goodyear had paid a total of $340,538.12 as its portion of the remediation costs and it was not anticipating further costs stemming from the occurrences at that site.
During May 1998, the case proceeded to trial against almost thirty insurance companies. At issue were well over two hundred CGL insurance policies that Goodyear held over a period of decades: primary insurance policies issued from 1949 until 1977, when Goodyear became self-insured at the primary level; and excess insurance policies issued from 1950 until July 1985, when Goodyear became self-insured at the excess level.
Throughout this period, Goodyear maintained multiple tiers of CGL coverage. The primary policies provided coverage for any qualifying occurrence,[2] up to the coverage limit of $500,000 (raised to $1,000,000 during the second half of 1976). Throughout this period, an "occurrence" was defined to include an injurious exposure to a condition that results, during the policy period, in personal injury or property damage that was not expected or intended by the insured. The excess policies provided coverage for occurrences after the underlying primary coverage limits were exhausted. Goodyear's total CGL coverage gradually increased over time, growing from less than $3,000,000 in 1949 to $200,000,000 in 1986.
During the presentation of Goodyear's evidence, the visiting judge assigned to the case suffered a heart attack and was unable to continue with the trial. Consequently, another visiting judge was assigned to proceed. Goodyear moved for a new trial, alleging that the new judge had missed certain testimony and lacked the requisite familiarity with the case, but the trial court denied the motion.
Goodyear presented the remainder of its evidence before the successor judge.
Following the presentation of Goodyear's case, the defendants moved for directed verdicts, asserting numerous grounds for such relief. Without specifying a basis for its decision, the trial court granted directed verdicts to all of the defendants. Because the judgment disposed of only some of Goodyear's claims, the trial court made the requisite finding, under Civ.R. 54(B), that there was "no just reason for delay." Goodyear appeals and raises ten assignments of error that will be rearranged to facilitate discussion.
[3]I.
Goodyear's second through ninth assignments of error challenge the directed verdict granted to all defendants who went to trial. Because the defendants asserted eight grounds for directed verdict, and the trial court failed to specify the basis for its decision, Goodyear has challenged all eight grounds through these assigned errors.
Pursuant to Civ.R. 50(A)(4), the trial court should grant a directed verdict if, "after construing the evidence most strongly in favor of the party against whom the motion is directed, [it] finds that upon any determinative issue reasonable minds could come to but one conclusion upon the evidence submitted and that conclusion is adverse to such party[.]" Although the moving party must specify the basis for its directed verdict motion, the trial court has inherent authority to sua sponte grant a directed verdict on any ground that is appropriate. Civ.R. 50(A)(3); see Gibbons v. Price...
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