Town of Harrison v. National Union Fire Ins. Co. of Pittsburgh, Pa.

Decision Date18 December 1996
Parties, 675 N.E.2d 829, 43 ERC 1865 TOWN OF HARRISON et al., Respondents-Appellants, v. NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA, et al., Appellants-Respondents.
CourtNew York Court of Appeals Court of Appeals
OPINION OF THE COURT

CIPARICK, Judge.

The issue presented on this appeal concerns the interpretation of the pollution exclusions contained in the commercial liability policies issued to plaintiffs, the Town of Harrison and Village of Harrison. The Appellate Division determined that because plaintiffs were not responsible for the alleged illegal dumping of waste materials onto property owned by complainants in three of the underlying actions, the pollution exclusion clauses in the policies were inapplicable to bar coverage. We disagree. The language of the pollution exclusions does not require that the insured be the actual polluter in order for the exclusion to apply. Therefore, defendant insurers properly relied on the unambiguous pollution exclusion to deny coverage to the insureds.

Plaintiffs were insured by National Union Fire Insurance Company (National Union) under a "public officials and employees" liability policy and by The North River Insurance Company (North River) under a combined casualty, crime and property policy. Each policy contained several exclusions, including a provision that excluded coverage for claims arising from environmental pollution, whether sudden or not.

According to plaintiffs, three notices of claim and complaints were served on them by the owners of contiguous residential properties alleging that plaintiffs negligently failed to prevent and abate the illegal disposal of noxious waste on their land by an excavation contractor retained by the landowners to regrade their properties. By three separate State court actions, these property owners sought damages on a variety of claims, including personal injuries, property damage, environmental costs and clean-up costs. A fourth action was instituted in Federal court, subsequent to the filing of a notice of claim, by the owner of property adjacent to a municipal highway storage building and garage, alleging that plaintiffs unlawfully dumped and permitted others to dump pernicious waste materials on his residential property. This property owner charged plaintiffs with the release of hazardous substances in violation of Federal statute and common-law rights, and sought damages and other relief.

As required by the terms of the subject liability policies, plaintiffs notified defendants of these four matters and requested coverage. Defendants disclaimed coverage and declined to defend and indemnify plaintiffs in these actions based on the pollution exclusion clauses. Defendants informed plaintiffs that the policies do not extend to claims arising out of the dumping of waste materials, contaminants or pollutants as alleged in the underlying complaints. Thereafter, plaintiffs instituted this action seeking a judgment declaring that defendants are obligated to defend and indemnify plaintiffs in the underlying actions.

Defendants answered and moved for summary judgment dismissing the complaint and for a declaration that they are not obligated to defend or indemnify plaintiffs. Plaintiffs cross-moved for summary judgment on the complaint. Supreme Court granted defendants' motions for summary judgment and declared that the insurers had no duty to defend or indemnify plaintiffs because the pollution exclusion clauses unambiguously excluded coverage for claims arising from the discharge or dispersal of waste materials, irritants or pollutants and denied plaintiffs' cross motion. Plaintiffs appealed and National Union cross-appealed from so much of the order and judgment that failed to declare that it had no insurance obligation under other policy exclusions.

The Appellate Division modified (see, Town of Harrison v. National Union Fire Ins. Co., 219 A.D.2d 640, 631 N.Y.S.2d 420). As relevant to this appeal, the modification denied defendants' motion for summary judgment with regard to the three State court actions, reinstated the complaint as to these...

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