Time Oil Co. v. Cigna Property & Cas. Ins. Co.

Citation743 F. Supp. 1400
Decision Date23 May 1990
Docket NumberNo. C88-1235R.,C88-1235R.
CourtU.S. District Court — Western District of Washington



David R. Lord, Ferguson & Burdell, Seattle, Wash., Dennis J. Britt, Snohomish County Courthouse, Everett, Wash., William H. Bode, William H. Bode & Associates, Washington, D.C., for Time Oil Co.

Allan H. Baris, Harold Roland Hofstedt, Merrick, Hofstedt & Lindsey, Seattle, Wash., for defendant Allianz Ins. Co.

William Jones Price, Karr Tuttle Campbell, Seattle, Wash., for defendants Continental Ins. Co., Harbor Ins. Co. and Glens Falls Ins. Co.

Douglas S. Dunham, Crane, Stamper, Dunham & Drury, Seattle, Wash., Ray L. Wong, Lisa J. Evans, Hancock, Rothert & Bunshoft, San Franciso, Cal., for defendant Great American Surplus Lines Ins. Co.

Steven Soha, Seattle, Wash., for defendants Holland-America Ins. Co. and Cigna Property & Cas. Ins. Co.

W. George Bassett, Bassett & Morrison, Seattle, Wash., for defendants Ins. Co. of State of Pa. and Nat. Union Fire Ins. Co. of Pittsburgh, Pa.

Kevin P. Kamraczewski, Kathryn T. Mondon, Elizabeth Colpoys, William C. Ruettinger, Dowd & Dowd, San Francisco, Cal., Mark Nels Thorsrud, Thorsrud, Cane & Paulich, Seattle, Wash., for defendant Northbrook Excess and Surplus Ins. Co.

Robert Jackson Stephenson, Carney, Stephenson, Badley, Smith & Spellman, Seattle, Wash., for defendant Protective Nat. Ins. Co. of Omaha.

Vincent T. Marci, Dowd & Dowd, San Francisco, Cal., Mark Nels Thorsrud, Thorsrud, Cane & Paulich, Seattle, Wash., for defendant Royal Indem. Co.

Dennis Smith, Wilson, Smith, Cochran & Dickerson, Seattle, Wash., for defendant U.S. Fire Ins. Co.

Richard Franklin Allen, Cathy A. Spicer, Lane, Powell, Spears, Lubersky, Seattle, Wash., for defendants Underwriters at Lloyd's, London, River Thames Ins. Co., Ltd., Orion Ins. Co., Ltd., Orion Ins. Co., Public Ltd. T., Andrew Weir Ins. Co., Ltd., London & Overseas Ins. Co., Ltd., European Gen. Reinsurance Co. of Zurich, Guildhall Ins. Co., Ltd., Mercantile & Gen. Reinsurance Co., Ltd., Victory Ins. Co., Ltd. and Unknown British Co.


ROTHSTEIN, Chief Judge.

THIS MATTER comes before the court on several motions for summary judgment. Having reviewed the motions, together with all documents filed in support and in opposition, and having heard argument, the court finds and rules as follows:


A. General Background

In 1964, Time Oil Company ("Time Oil") purchased the real property located at 3011 South Fife Street in Tacoma, Washington (the "Parcel"). Prior to 1964, and subsequent thereto until 1976, an oil recycling facility was operated on the Parcel. Underneath the Parcel and the surrounding properties lies the South Tacoma Channel Aquifer ("Aquifer"). The groundwater in the Aquifer is owned by the State of Washington. Near the Parcel, the City of Tacoma maintains a well, Well 12A, from which it pumps water from the Aquifer during the summer months.

In 1981, the United States Environmental Protection Agency ("EPA") detected the following chlorinated organic solvents in Well 12A: trichloroethylene (TCE); tetrachloroethylene (PCE); 1,1,2,2-tetrachloroethane (PCA); and 1,2-trans-dichloroethylene (DCE).1 On May 13, 1982, the EPA advised Time Oil that it had been identified as a potential responsible party ("PRP") of the contamination. See Time Oil Exhibit 65.

Thereafter, in June 1984, the EPA notified Time Oil that its investigation disclosed that Time Oil's property was the principal source of the contamination at Well 12A. Pursuant to CERCLA, the EPA then issued an Administrative Order directing Time Oil to take remedial action. See Amended Complaint, Exhibit 1. Thereafter, beginning in August 1984, Time Oil sent notice of this potential claim to its insurance carriers. See Time Oil Exhibit 6.

Meanwhile, the State of Washington and the City of Tacoma brought an action against Time Oil to recover response costs incurred in eliminating the contamination at Well 12A, and to enjoin further release of hazardous substances. When the United States, through the EPA, filed a separate suit for response costs under CERCLA, the two actions were consolidated. See Cas. No. C85-478(TB). In 1988, Time Oil entered into a Consent Order with the government entities, thereby agreeing to pay $8.5 million plus interest representing response costs sustained in connection with the contamination at Well 12A. See Amended Complaint at Exhibit 4.

B. Litigation History

After unsuccessfully attempting to recover costs — including investigation, response and defense costs — from its numerous insurance carriers, Time Oil initiated this lawsuit.2 In its complaint, Time Oil alleges three claims for relief. Under Count I, Time Oil seeks a declaratory judgment that its primary carriers (the "Count I defendants") breached their respective duties to defend Time Oil against all claims based on alleged property damage arising out of discharges from the Parcel. See Amended Complaint at ¶¶ 32-35. Under Count II, Time Oil seeks a declaratory judgment that all defendants breached their respective duties to indemnify. See Amended Complaint at ¶¶ 36-38. Under Count III, Time Oil alleges that the Count I defendants breached their implied covenants of good faith and fair dealing by refusing to defend Time Oil. See Amended Complaint at ¶¶ 39-40. Count III also charges that this refusal constituted a violation of the Washington Consumer Protection Act, RCW § 48.01.030. See Amended Complaint at ¶¶ 39-42.

Recently, the parties moved for summary judgment as to several thresholds issues. First, the Count I defendants moved for dismissal as to Count III. Second, Time Oil and relevant defendants filed cross-motions for summary judgment as to two types of clauses contained in Time Oil's insurance policies: the "absolute pollution exclusion" clause, and the "qualified pollution exclusion" clause. On April 2, 1990, the court issued rulings denying the Count I defendants' motion as to Count III; granting defendants' motion, and denying Time Oil's motion, as to the absolute pollution exclusion clause; and granting Time Oil's motion, and denying defendants' motion, as to the qualified pollution exclusion clause. See Order Re: Motions for Summary Judgment at 19; Order Granting Defendants' Motion to Vacate, and Granting in Part and Denying in Part Defendants' Motion for Reconsideration ("Order on Reconsideration") at 7-10.

The parties have now filed a second round of summary judgment motions covering myriad legal issues.


A. Preliminary Matters

Before reaching the substance of the summary judgment motions, the court must address two procedural matters: (1) defendants' motion to strike a portion of the Declaration of Raymond Abendroth and (2) defendants' motion to strike the Declaration of Lyle Silka.

1. Abendroth Declaration

Time Oil has submitted the Declaration of Raymond Abendroth, Chief Executive Officer of Time Oil, in which he states:

In a meeting on May 18, 1982, EPA representatives assured us that the issuance of a PRP letter was "routine" agency action and did not mean that Time Oil Co. was responsible for the contamination detected at Well 12A.

See Declaration of Abendroth at 3. Central National, Glens Falls, National Union and Royal Indemnity move to strike this statement, arguing that the Declaration does not show affirmatively that Abendroth attended the May 18 meeting, and that the statement is inadmissible hearsay.

Time Oil concedes in its opposition that Abendroth was not present at the meeting and did not hear the statements which he attributes to the EPA. See Time Oil's Opposition to Defendants' Motion to Strike One Sentence in the Abendroth Declaration at 5. As such, the statement is double hearsay: testimony by Abendroth that other persons working for Time Oil heard EPA representatives make certain statements. See Fed.R.Evid. 805.

Time Oil attempts to avoid the hearsay problem by arguing that Abendroth's statement is not being offered for the truth of the matter asserted therein, but rather as evidence of Time Oil's state of mind. Such evidence, however, is not appropriately presented by way of Abendroth. See, e.g., United States Football League v. National Football League, 842 F.2d 1335, 1376 (2d Cir.1988); United States v. McKinney, 707 F.2d 381 (9th Cir.1983).3 The motion must be granted.

2. Silka Declaration

Pursuant to Fed.R.Civ.P. 6(d), "when a motion is supported by affidavit, the affidavit shall be served with the motion." Nonetheless, along with one of its reply briefs, Time Oil filed the Declaration of Lyle Silka. Defendants move to strike the Silka Declaration as untimely. See, e.g., Wood v. Santa Barbara Chamber of Commerce, Inc., 705 F.2d 1515 (9th Cir.1983).

Time Oil does not address the requirement established in Federal Rule 6(d); rather, it argues that the Local Rules of this district permit a moving party to file supporting material along with a reply brief. See Time Oil's Opposition to Motion to Strike Silka Declaration at 2-4 (citing Local Rules W.D. Wash. CR 7(b)(3)). Local Rule CR 7(b)(3) does not authorize a general extension of the timing requirements of Federal Rule 6(d).

Nevertheless, the court will deny defendants' motion to strike. Having reviewed the Silka Declaration, the court concludes that defendants have not been prejudiced by this untimely filing. See infra § II.D.2. See also Strang v. U.S. Arms Control & Disarmament Agency, 864 F.2d 859, 861 (D.C.Cir.1989) (affidavits timely filed when served the day of the hearing where they "merely supported the existing motion and did not constitute a new motion for summary judgment on additional issues or grounds").

As an alternative basis of relief, defendants request an opportunity to file a supplemental response regarding the evidence presented...

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