Tig Ins. Co. v. Town of Cheektowaga, 97-CV-0546A.

• Decision Date: 29 September 2000
• Docket Number: No. 97-CV-0546A.,97-CV-0546A.
• Citation: 142 F.Supp.2d 343
• Parties: TIG INSURANCE COMPANY, Plaintiff, v. TOWN OF CHEEKTOWAGA, Defendant, Town of Cheektowaga, Defendant/Third Party Plaintiff, v. Aetna Casualty and Surety Co., CIGNA Property & Casualty Ins. Co., Maryland Casualty Co., the Travelers Insurance Company and United States Fidelity & Guaranty Co., Third Party Defendants.
• Court: U.S. District Court — Western District of New York

Page 343

142 F.Supp.2d 343

TIG INSURANCE COMPANY, Plaintiff, v. TOWN OF CHEEKTOWAGA, Defendant, Town of Cheektowaga, Defendant/Third Party Plaintiff, v. Aetna Casualty and Surety Co., CIGNA Property & Casualty Ins. Co., Maryland Casualty Co., the Travelers Insurance Company and United States Fidelity & Guaranty Co., Third Party Defendants.

No. 97-CV-0546A.

United States District Court, W.D. New York.

September 29, 2000.

Order denying motion to amend, May 1, 2001.

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COPYRIGHT MATERIAL OMITTED

Morrison, Mahoney & Miller, Boston, MA (Michael F. Aylward, of Counsel), Hurwitz & Fine, P.C., Buffalo, NY (Dan D. Kohane, of Counsel), for Plaintiff.

Damon & Morey, Buffalo, NY (Joseph J. Schoellkopf, Jr., Carol G. Snider, and Michael J. Willett, of Counsel), for Defendant Town of Cheektowaga.

Connors & Vilardo, Buffalo, NY (Kevin A Ricotta, of Counsel), Buffalo, Morrison & Foerster, New York City (Charles L. Kerr, of Counsel), New York City, for Third Party Defendants Aetna Casualty & Surety Company and The Travelers Insurance Company.

Roach, Brown, McCarthy, Gruber & Chiari, P.C., Buffalo, NY (Edmund S. Brown, Jr., of Counsel), Siegel & Napierkowski, Cherry Hill, NJ (Alice A. Previte, of Counsel) for Third Party Defendant CIGNA Property & Casualty Ins. Co.

Willey, Rein & Fielding, Washington, DC (Lon A. Berk, and Mary E. Borha, of Counsel), Jasen, Jasen & Sampson, Buffalo, NY (William E. Nowakowski, of Counsel), for Third Party Defendant Maryland Casualty Co.

Hodgson, Russ, Andrews, Woods & Goodyear, Buffalo, NY (Michael P. Murphy, of Counsel), for Third Party Defendant United States Fidelity and Guaranty Company.

ORDER

ARCARA, District Judge.

This case was referred to Magistrate Judge Leslie G. Foschio, pursuant to 28 U.S.C. § 636(b)(1), on August 22, 1997. On March 11, 1998, third-party defendant Century Indemnity Company ("Century"), improperly designated as CIGNA Insurance, filed a motion for summary judgment. On July 16, 1999, third-party defendants Maryland Casualty Company ("Maryland") and The Travelers Insurance Company ("Travelers") filed motions for summary judgment, plaintiff TIG Insurance Company ("TIG") filed a motion for summary judgment against defendant Town of Cheektowaga, and third-party defendant United States Fidelity & Guaranty Company ("USF & G") filed a motion for summary judgment. On September 15, 1999, defendant Town of Cheektowaga filed a cross-motion for partial summary judgment. On March 10, 2000, Magistrate Judge Foschio filed a Report and Recommendation, recommending that third-party defendant Century's motion be granted, that third-party defendant Maryland's motion be granted, that third-party defendant Travelers' motion be granted, that plaintiff TIG's motion be denied, that third-party defendant USF & G's motion be granted, and that defendant Town of Cheektowaga's cross-motion be denied.

Objections to the Magistrate Judge's Report and Recommendation were filed by defendant/third-party plaintiff Town of Cheektowaga and plaintiff TIG. Oral argument on the objections was held on May 12, 2000. At that time, the Court asked for additional briefing on the issue of the applicability of New York Insurance Law § 3420(d). Such briefing was completed on June 9, 2000. On June 12, 2000, plaintiff TIG filed a motion to file supplemental papers.

Pursuant to 28 U.S.C. § 636(b)(1), this Court must make a de novo determination of those portions of the Report and Recommendation to which objections have been made. Upon a de novo review of the Report and Recommendation, and after reviewing the submissions and hearing argument from the parties, the Court adopts the proposed findings of the Report and Recommendation with one exception discussed below.

Defendant/third-party plaintiff Town of Cheektowaga ("Town") claims that certain of the third-party defendants in this case should be precluded from disclaiming coverage under the pollution exclusion clauses in their respective insurance policies because they failed to provide timely notice of such disclaimers pursuant to New York Insurance Law § 3420(d), which provides:

If under a liability policy delivered or issued for delivery in [New York], an insurer shall disclaim liability or deny coverage for death of bodily injury arising out of a motor vehicle accident or any other type of accident occurring within [New York], it shall give written notice as soon as is reasonably possible of such disclaimer of liability or denial of coverage to the insured and the injured person or any other claimant.¹

The Magistrate Judge, however, concluded that timely notice requirement in § 3420(d) does not apply to the pollution exclusion clauses at issue here. He reasoned that because the pollution exclusion clause expressly excluded the claimed incident from policy coverage, there was no contractual relationship with respect to that incident and that a failure to timely disclaim would not create coverage where none otherwise existed. See Report and Recommendation at 27 (citing Zappone v. Home Ins. Co., 55 N.Y.2d 131, 447 N.Y.S.2d 911, 432 N.E.2d 783 (1982)).

At oral argument on the Town's objections to the Report and Recommendation, the Court requested additional briefing on the issue of the applicability of § 3420(d) to the pollution exclusion clauses in this case. During the additional briefing period, the parties identified to the Court two recent New York Court of Appeals cases, Worcester Ins. Co. v. Bettenhauser, 95 N.Y.2d 185, 712 N.Y.S.2d 433, 734 N.E.2d 745 (2000) and Agoado Realty Corp. v. United Int'l Ins. Co., 95 N.Y.2d 141, 711 N.Y.S.2d 141, 733 N.E.2d 213 (2000). Those cases held that a timely disclaimer based on § 3420(d) is necessary when denial of insurance coverage is based on a policy exclusion without which the claim would be covered. That is the case here. Denial of coverage by the third-party defendants is based on the pollution exclusion clause, without which the Town's claims would be covered. Accordingly, it appears that Worcester and Agoado are directly contrary to the Magistrate Judge's reasoning that § 3420(d) does not apply to the pollution exclusion clauses in this case simply because they are exclusions to the policy.

Nevertheless, the Court finds that § 3420(d) is inapplicable in this case for a different reason. By its express terms, § 3420(d) applies only when the underlying bodily injury or death claim arises out of an "accident." See First Financial Ins. Co. v. Jetco Contracting Corp., 2000 WL 1013945 at *6 (S.D.N.Y. July 21, 2000). An intentional act cannot constitute an accident. Id. The claims of death and bodily injury in the underlying actions in this case arise not from an accident, but from the Town's long-term, intentional discharges of waste at the Pfohl Site. New York courts have repeatedly held that such purposeful discharges into a landfill cannot be deemed accidental, as a matter of law. See Technicon Elec. Corp. v. American Home Assurance Co., 74 N.Y.2d 66, 544 N.Y.S.2d 531, 532-33, 542 N.E.2d 1048 (1989); Powers Chemco, Inc. v. Federal Ins. Co., 144 A.D.2d 445, 533 N.Y.S.2d 1010, 1011-12 (N.Y.App.Div.1988), aff'd, 74 N.Y.2d 910, 549 N.Y.S.2d 650, 548 N.E.2d 1301 (1989). Nor are such discharges unexpected or unintended. State of New York v. AMRO Realty Corp., 936 F.2d 1420, 1428 (2d Cir.1991) (the long term and repeated release of hazardous waste upon land or into a watercourse cannot be considered accidental). Thus, because the injuries in the underlying cases did not arise from an "accident," § 3420(d)'s timely notice requirement does not apply.²

Accordingly, for the reasons set forth in Magistrate Judge Foschio's Report and Recommendation and herein, the Court hereby grants third-party defendants' motions for summary judgment, denies plaintiff TIG's motion for summary judgment, and denies defendant Town's cross-motion for summary judgment. Plaintiff TIG's motion to file supplemental papers is hereby denied. The Court hereby refers the matter back to Magistrate Judge Foschio for a determination as to what additional proceedings, if any, are required in this case.

IT IS SO ORDERED.

DECISION AND ORDER

Order on Motion to Amend

INTRODUCTION

Currently before the Court is the motion of plaintiff, TIG Insurance Company ("TIG"), pursuant to Rule 59(e) of the Federal Rules of Civil Procedure, to amend or alter the Court's Order filed September 29, 2000 (the "Sept. 29th Order"), in which, inter alia, the Court denied TIG's motion for summary judgment. For purposes of this Decision and Order, the Court will assume familiarity with its Sept. 29th Order and the Report and Recommendation issued by Magistrate Judge Leslie G. Foschio on March 10, 2000. Defendant Town of Cheektowaga (the "Town") opposes TIG's motion to alter or amend the Sept. 29th Order. Oral argument on the motion was held on January 10, 2001.

After reviewing the submissions of the parties and hearing argument from counsel, the Court denies TIG's motion to amend or alter the Sept. 29th Order.

DISCUSSION

New York Insurance Law § 3420(d) provides:

If under a liability policy delivered or issued for delivery in [New York], an insurer shall disclaim liability or deny coverage for death or bodily injury arising out of a motor vehicle accident or any other type of accident occurring within [New York], it shall give written notice as soon as is reasonably possible of such disclaimer of liability or denial of coverage to the insured and the injured person or any other claimant.

In its Sept. 29TH Order, the Court found that the timely notice of disclaimer requirement in § 3420(d) does not apply in this case because the Town's intentional, long-term discharges into the landfill did not constitute an "accident" for purposes of § 3420(d).

According to TIG, its insurance policies in this case provide coverage only for an "accident." TIG argues that if the Town's intentional, long-term discharges into the landfill did not constitute...