TRUK-AWAY OF RI v. Aetna Cas. & Sur. Co.

• Decision Date: 26 January 1999
• Docket Number: No. 97-275-Appeal.,97-275-Appeal.
• Citation: 723 A.2d 309
• Court: Rhode Island Supreme Court
• Parties: TRUK-AWAY OF RHODE ISLAND, INC., et al. v. The AETNA CASUALTY & SURETY COMPANY, et al.

723 A.2d 309

TRUK-AWAY OF RHODE ISLAND, INC., et al. v. The AETNA CASUALTY & SURETY COMPANY, et al.

No. 97-275-Appeal.

Supreme Court of Rhode Island.

January 26, 1999.

Paul Zevnik, Washington, DC, Richard G. Galli, John P. Gyorgy, Providence, John Osborne, for plaintiffs.

Allen B. Taylor, Mark C. Hadden, Providence, Esther R. Aronson, Hartford, CT, Dominic Shelzi, East Greenwich, Mark Lavoie, Robert Hacking, Boston, MA, Jerome J. Sweeney; Gregory Deschenes, Dennis Duggan, Boston, MA; Thomas C. Angelone, Providence, Gregory Capps, Michael Gallagher, Kathryn Dux, Dselaine Belver, Philadelphia, PA, for defendants.

Present: WEISBERGER, C.J., and LEDERBERG, BOURCIER, FLANDERS, and GOLDBERG, JJ.

OPINION

BOURCIER, Justice.

This environmental insurance coverage case comes before this Supreme Court on appeal by the plaintiffs, Truk-Away of Rhode Island, Inc. (Truk-Away), and Landfill & Resource Recovery, Inc. (L & RR). The plaintiffs had sought a declaration by the Superior Court that the defendants owed a duty to defend and indemnify them under various primary and excess general liability policies. In addition, the plaintiffs had asserted claims for breach of contract; for bad faith against some of the defendants; and for denial of coverage on claims made against the plaintiffs, pursuant to the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. §§ 9601-9621 (CERCLA), for their storage and transportation of hazardous waste to a landfill site in North Smithfield, Rhode Island (the "site" or landfill). The trial justice granted partial summary judgment to five of the twelve defendant insurers.¹

On appeal, the plaintiffs allege that the trial justice erred in granting summary judgment. They contend that (1) there existed genuine issues of material fact concerning the time when the underlying property damage and other injury actually occurred; (2) the trial justice applied the incorrect "trigger of coverage" for determining the defense and indemnity obligations of a general liability insurer where there was continuous or progressive property damage or injury; and, (3) the trial justice failed to make findings of fact and conclusions of law to support his conclusion that there is no intent expressed in the policies to provide personal injury coverage to the plaintiffs.

The plaintiffs request this Court to reverse the five grants of summary judgment and remand the cause for trial. For the reasons hereinafter given, we deny the plaintiffs' appeal and we affirm the final judgments of the Superior Court. The facts insofar as relevant to the issues raised in this appeal are related below.

Facts and Procedural History

The site in question is a twenty-eight acre sanitary landfill contained within a thirty-six acre parcel located in the Town of North Smithfield. From 1969 to 1974, the site was owned by Landfill, Inc. In 1974, L & RR purchased the site. Truk-Away, incorporated in 1974, is the successor to a number of corporations engaged in the business of legally transporting household, commercial, and industrial materials (solid waste) to the site since 1969. In 1979, Truk-Away purchased a controlling interest in L & RR and later, in 1987, purchased the remaining interest.

In 1977, changes made in Federal and State law redefined as hazardous waste, certain solid wastes which previously had not been so defined. These solid wastes had been placed at the site in question. In March 1978, the Rhode Island Department of Environmental Management (DEM) began requiring that L & RR manifest all hazardous industrial wastes being placed at the site. On September 6, 1979, DEM ordered L & RR to cease accepting hazardous waste at the site. On October 30, 1981, DEM issued a "decision and order" directing L & RR to cease accepting all wastes and to close the northern portion of the landfill. L & RR filed its appeal from the closure order in the Superior Court. On December 28, 1981, a justice of that Court stayed enforcement of the DEM order. Subsequent proceedings in the Superior Court appeal culminated in a consent order and agreement between the parties, dated June 29, 1983 (the "consent order"), which provided for the disposal of waste at the site up to and including 1985, and for the subsequent closure of the site.

Meanwhile, the Environmental Protection Agency (EPA) had commenced a preliminary site assessment and in December 1982, placed the site on the initial Superfund National Priorities List.² Following that, the EPA conducted a Remedial Investigation/Feasibility Study and assumed jurisdiction over remediation of the site. In 1986, the EPA notified the plaintiffs of their potential responsibility at the site. In 1988, other potentially responsible parties³ were also notified. On September 29, 1988, after providing opportunity for public comment, the Regional Administrator of EPA Region I issued a final record of decision, which specified the remedial actions necessary to be undertaken at the site to protect the public health, welfare, and the environment.

On June 29, 1990, EPA Region I issued an administrative order (the "EPA order"). In its findings, the EPA reported that "[i]n 1969, the Landfill and adjacent areas were purchased by Landfill, Inc. and began operation as a solid waste disposal area," and that subsequently, "[t]he Landfill and adjacent areas were sold to Landfill and Resource Recovery, Inc. (L & RR, Inc.) in 1974 ***." The EPA then asserted that "L & RR, Inc. has owned the Landfill at all times since 1974, including the period between March 1977 and September 1979 when Hazardous Substances were disposed of at the Landfill." After acknowledging that industrial waste manifests had been submitted by L & RR to the DEM, the EPA found that "in addition to the RIDEM manifests submitted to the EPA, EPA has estimated that more than two (2) million gallons of waste which included Hazardous Substances was accepted for disposal at the Landfill between March 1977 and September 1979." The EPA further noted in its order that "[t]he precise location of the Hazardous Substances in the Landfill is unknown."

The EPA order additionally noted that the landfill presently releases and will continue to release hazardous substances into the environment, including the air, groundwater, and surface water, and asserted that: "[a] significant threat exists that a groundwater plume may flow from the source area into the future. This threat is caused by the existence and unknown location of over 2 million gallons of a wide variety of wastes, including Hazardous Substances in the Landfill ***."

To remedy existing damage and prevent the occurrence of future damage, the EPA order required the plaintiffs and approximately twenty other parties to commence specific remedial actions at the site. The plaintiffs' response was the commencement of the civil action now in part before us, against the defendants claiming damage under various primary and excess general liability insurance policies. The particular defendants' insurance policies with which we are concerned in the instant appeal had all by their express terms expired by 1974.

In response to the plaintiffs' allegations, the defendants in the present appeal filed motions for partial summary judgment. The defendants in those Superior Court motions asserted that because the particular insurance policies at issue all had expired by 1974, and because the plaintiffs had produced no evidence showing that property damage triggering coverage had taken place prior to 1977, the defendants had no duty under the policies to indemnify the plaintiffs. Simply stated, the defendants contended that there was no liability triggering occurrence during the terms of the policies in question. In addition, the defendants asserted that they had no present duty to defend the plaintiffs because the EPA order did not contain any allegations of loss that occurred during the effective periods of their now-expired policies. The defendants further maintained that the alleged potential claims for nuisance and trespass would not obligate them to the plaintiffs because the policies in question did not include a coverage for those claims and were not encompassed in the enumerated personal injury offenses section of the policies. Accordingly, the defendants asserted that there was no breach of good faith on their part that was owed to the plaintiffs.⁴ At the time of those motions, no private actions had been filed against the plaintiffs, and there is nothing before us indicating that any have since been filed.

The trial justice, after hearing, granted the defendants' motions, finding that there was no policy triggering occurrence that took place during the policy term of any policy issued by the defendant insurers in this appeal prior to 1977. He dismissed the personal injury claims with prejudice, finding that a careful reading of the policies revealed that there was no evidence of any contractual intent contained in the policies to cover such claims.⁵ Additionally, the trial justice precluded argument on the bad faith claim stating: "[y]ou've got to establish liability first; then worry...