US Fidelity and Guar. Co. v. Thomas Solvent Co.

Decision Date14 April 1988
Docket NumberNo. K85-415.,K85-415.
Citation683 F. Supp. 1139
PartiesUNITED STATES FIDELITY AND GUARANTY COMPANY, a foreign insurance company, Plaintiff, v. THOMAS SOLVENT COMPANY; a Michigan corporation, et al., Defendants. Catherine ALLEN, Individually, and as Next Friend of Eric Allen, Troy Allen and Richard Allen, Minors et al., Intervening Plaintiffs. v. GRAND TRUNK WESTERN RAILROAD COMPANY, Intervening Defendant/Cross-Plaintiff, v. CONTINENTAL CASUALTY COMPANY, a foreign insurance company, et al., Cross Defendants. GRAND TRUNK WESTERN RAILROAD COMPANY, Intervening Defendant/Counter Plaintiff, v. UNITED STATES FIDELITY AND GUARANTY COMPANY, a foreign insurance company, Counter Defendant.
CourtU.S. District Court — Western District of Michigan

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Miller, Canfield, Paddock & Stone by Michael B. Ortega, Kalamazoo, Mich., by Charles E. Ritter, for U.S. Fidelity and Guar. Co.

Smith, Haughey, Rice & Roegge by John M. Kruis, Grand Rapids, Mich., for Guaranty Nat. Ins. Co.

Rhoades, McKee & Boer by F. William McKee and Michael T. Small, Grand Rapids, Mich., for Hartford Acc. & Indemnity.

Nelson and Krueger by James R. Nelson, Grand Rapids, Mich., for Admiral Ins. Co.

Kitch, Saurbier, Drutchas, Wagner & Kenney by Gregory G. Drutchas, Detroit, Mich., by Stephen M. Kelley, for St. Paul Fire & Marine.

Piatt, Bartosiewicz & Tiderington by Gary P. Bartosiewicz, Kalamozoo, Mich., for Auto-Owners Ins. Co.

Ryan, Jamison & Hubbell by Daniel K. Jamieson, Kalamazoo, Mich., for Integrity Ins. Co.

Bremer, Wade, Nelson & Alt by Michael D. Wade, Grand Rapids, Mich., for Great American Surplus.

Cholette, Perkins & Buchanan by William D. Buchanan, Grand Rapids, Mich. by Kenneth L. Block, Pretzel & Stouffer, Chartered by Samuel B. Isaacson, Chicago, Ill., for Gibralter Cas. Co. (Co-Counsel).

Denenberg, Tuffley, Bocan, Jamieson, Black, Hopkins & Ewald by William J. Ewald, Ronald G. Musto, Grand Rapids, Mich., for Northstar Re-Insurance Co.

Early, Lennon, Peters & Crocker by J. Richardson Johnson, Kalamazoo, Mich., for First State Ins. Co.

Sullivan, Hamilton & Schultz by Robert P. Hamilton and James M. Sullivan, Battle Creek, Mich., for Thomas Solvent Co. and Thermo-Chem, Inc.

Gemrich, Moser, Domrowski, Bowser & Fette by William L. Fette, Kalamazoo, Mich., for applicants for intervention.

Tolley, Fisher & Verwys, P.C. by Peter R. Tolley, Grand Rapids, Mich., for Northbrook Excess and Surplus Ins. Co.

Lilly, Domeny, Durant, Byrne & Schanz, P.C., by Terrence J. Lilly, Kalamazoo, Mich., for Canadian Universal Ins. Co.

Straub, Seaman & Allen, P.C. by Drew F. Seaman, St. Joseph, Mich., for Continental Cas. Co.

Bodman, Longley & Dahling by Fredrick J. Dindoffer, R. Craig Hupp, Detroit, Mich., for Grand Trunk Western R. Co. (proposed intervener).

Law Offices of Joseph William Moch by Joseph William Moch, Grand Rapids, Mich. by Terry E. Heiss, for intervening plaintiffs.

Allen, Lippes and Shonn by Richard Lippes, Buffalo, N.Y., Brown & Transeth by James B. Brown, Lansing, Mich., for Adkins Group.

Landman, Latimer, Clink & Robb by Steven C. Kohl, Muskegon, Mich., for Thermo Chem Participating Co.

OPINION

ENSLEN, District Judge.

On September 11, 1987, I filed an opinion and order granting plaintiff USF & G's motion for clarification and reconsideration. The September 11th opinion essentially returned this case to the status quo prior to August 7, 1987. See Opinion filed September 11, 1987 in K85-415.

Presently before me is that portion of USF & G's motion for summary judgment filed March 5, 1987 which seeks a declaratory judgment with respect to the duty to defend issue as to the "General Liability Policy Issuers"1 and the "Automobile Policy Insurers."2 USF & G originally moved for a declaratory judgment only as to defendants Canadian, Northbrook, St. Paul and Hartford. I note that pursuant to the stipulation entered into between USF & G and Continental filed May 8, 1987, Continental is now included in that list. The remainder of the defendants in the declaratory judgment action are "excess" or similarly described carriers whose policies of insurance do not contain a primary duty to defend provision although some of the excess policies may contain duty to defend provisions which are activated only after underlying limits have been exhausted.3 See USF & G's Motion for Summary Judgment at 4, n. 2. The parties have agreed that at this time a determination of their duty to indemnify is premature. Pursuant to my Order of August 18, 1987 and the discussion between Magistrate Rowland and counsel during the hearing of August 15, 1986, the parties agreed that I should rule upon the duty to defend issue before entertaining motions concerning the duty to indemnify.

Plaintiff USF & G issued Comprehensive General Liability ("CGL") and Comprehensive Automobile Liability policies covering November 1, 1968 to November 17, 1978 when the last policy was cancelled. USF & G believes that the November 17th cancellation was later made effective as of November 1, 1978 — the date on which other insurance apparently obtained by Thomas Solvent became effective. See USF & G's Brief in Support of Motion for Partial Summary Judgment at 5. USF & G further asserts that it has no policies or declarations pages for any policies before November 1, 1975. Apparently USF & G's named insureds at all times included the Thomas Solvent Company and Thermo-Chem, Inc., and included Thomas Transportation Co., Fred E. Thomas, Letha D. Thomas and Thomas Development Corp. for various periods of time.

Canadian issued General Liability policies to Thomas Solvent Company and Thermo-Chem, Inc., covering November 1, 1978 to November 1, 1981.

Northbrook covered Thomas Solvent Company, Thomas Development Corp. and Thermo-Chem, Inc., for CGL insurance under two policies covering November 1, 1981 through November 1, 1983. Several more Thomas Solvent entities, including T.S.C. Transportation, Inc., were added in 1982, via endorsements.

St. Paul's CGL insurance policy was issued to cover November 1, 1983 to November 1, 1984, but St. Paul alleges that it was effectively cancelled March 19, 1984. St. Paul's named insureds include seven of the Thomas Solvent entities, including Thomas Solvent Co., Thomas Development Co., and Thermo-Chem, Inc.

Hartford issued a Commercial Automobile policy for November 1, 1981 to November 1, 1984, covering Thomas Solvent and Thermo-Chem, Inc. Apparently, it also issued one or more earlier Commercial Auto policies, the last of which expired on November 1, 1981. The latter policy, however, was apparently destroyed and is no longer available. Hartford also issued a Business Auto policy for November 1, 1984 to November 1, 1985. That policy named additional insureds, including T.S.C. Transportation, Inc. See, in general, Defendants' Answers to USF & G's interrogatories, attached to USF & G's Brief in Support as Exs. "B," "C," "D," and "E." (The policy allegedly issued by Continental is the so-called "phantom" policy. The Court will address that matter in due course in a separate discussion.)

Facts

In order to place this motion in its proper context, it is necessary to briefly identify the major parties and to describe, in general terms, the underlying substantive claims brought by and against those parties. Thomas Solvent Company is a Michigan corporation which was originally founded in the 1930s by Fred Thomas who operated the business as a sole proprietorship until it was incorporated on February 7, 1963. Thomas Solvent Company was engaged in the sale and distribution of industrial solvents and operated from two principal locations during the times relevant to this and other pending litigation.

The principal place of business was located at 1180 North Raymond Road, Battle Creek, Michigan (hereinafter "Raymond Road Site"). The other site was located approximately ¼ mile away ("The Annex"). The Annex included railroad siding facilities, one above-ground storage tank and one below-ground storage tank. Railroad cars containing solvent products were unloaded at the Annex and were stored and/or distributed in motor vehicle tankers or barrel containers. Underground tanks which were connected to an underground distribution system were situated at the Raymond Road Site. Industrial solvents were delivered to these latter facilities. The solvents were then extracted from the tanks and distributed by motor vehicle tankers or by barrels to various industrial customers. The Battle Creek City well water supply wells, commonly referred to as the "Verona Wells," are located northwest of these two sites.

Surrounding the Thomas Solvent operation sites are other industrial operations including the Grand Trunk Western Railroad Regional Switchyards and Roundhouse and Administration Facilities, the Michigan Livestock Exchange Stockyards, Reith-Riley Asphalt Plant, and other commercial enterprises. There are also a number of private homes scattered throughout the same general area. Thomas Solvent contends that it not only secured insurance coverage in the form of general comprehensive liability insurance to cover its operations, but secured automobile liability insurance coverage to cover its transport vehicles as well. Thomas Solvent Brief in Support of Insurance Carriers' Duty to Defend at 4.

In 1984, the State of Michigan, through its Attorney General and the Department of Natural Resources, filed suit in the Circuit Court for the County of Calhoun, alleging that the groundwater beneath the lands and premises occupied by Thomas Solvent Company was contaminated by the presence of industrial solvents. The suit also alleged that the aquifer, or groundwater flow, carried the contaminated groundwater to the City of Battle Creek. It was further alleged that not only the Verona Wells but also individual private wells surrounding the residential area...

To continue reading

Request your trial
66 cases
  • Just v. Land Reclamation, Ltd.
    • United States
    • Wisconsin Supreme Court
    • 19 Septiembre 1990
    ...comprehensive debate dispels the insurers contention that the exclusionary language is clear. See U.S. Fidelity and Guar. Co. v. Thomas Solvent Co., 683 F.Supp. 1139, 1155-56 (W.D.Mich.1988). Nevertheless, Bituminous insists that Wisconsin courts have implicitly rejected the line of cases w......
  • Morton Intern., Inc. v. General Acc. Ins. Co. of America
    • United States
    • New Jersey Supreme Court
    • 21 Julio 1993
    ...accidental" exception to pollution-exclusion clause), vacated, 784 F.Supp. 927 (D.Mass.1990); United States Fidelity & Guar. Co. v. Thomas Solvent Co., 683 F.Supp. 1139, 1155-61 (W.D.Mich.1988) (rejecting temporal definition of term "sudden," and holding insurers obligated to provide defens......
  • Servants of Paraclete, Inc. v. Great American Ins.
    • United States
    • U.S. District Court — District of New Mexico
    • 14 Junio 1994
    ...1447 (N.D.Ill.1988) (under Illinois law, insured must prove terms of policy, including exclusions); U.S. Fidelity & Guaranty Co. v. Thomas Solvent Co., 683 F.Supp. 1139, 1172 (W.D.Mich.1988) (Michigan law governs in deciding insured must prove terms of coverage). Federal courts are split on......
  • Minnesota Min. and Mfg. Co. v. Travelers Indem. Co.
    • United States
    • Minnesota Supreme Court
    • 8 Junio 1990
    ...compelled by law to rectify or mitigate damage caused by the insured's acts or omissions. See United States Fidelity & Guar. Co. v. Thomas Solvent Co., 683 F.Supp. 1139, 1168 (W.D.Mich.1988) ("the insured ought to be able to rely on the common sense expectation that property damage within t......
  • Request a trial to view additional results
6 books & journal articles
  • Boeing Co. v. Aetna Casualty and Surety Co.: Cercla Response Costs Covered "as Damages" Under Comprehensive General Liability Insurance Policies
    • United States
    • Seattle University School of Law Seattle University Law Review No. 14-02, December 1990
    • Invalid date
    ...cleanup costs are "damages" and thus covered under CGL policies); United States Fidelity and Guar. Co. v. Thomas Solvent Co., 683 F. Supp. 1139 (W.D. Mich. 1988) (finding the insurer's contractual analysis and definition of damages to be "hyerpertechnical"); Centennial Ins. Co. v. Lumbermen......
  • CHAPTER 10 ISSUES IN INSURANCE COVERAGE FOR ENVIRONMENTAL LIABILITIES
    • United States
    • FNREL - Special Institute Environmental Considerations in Natural Resource and Real Property Transactions (FNREL)
    • Invalid date
    ...2d 156 (Minn. App. 1987); Fireman's Fund Ins. Cos. v. Ex-Cello-O Corp., 662 F. Supp. 71 (E.D. Mich. 1987); USF&G v. Thomas Solvent Co., 683 F. Supp. 1139 (W.D. Mich. 1988); Centennial Ins. Co. v. Lumbermens Mut. Cas. Co., 677 F. Supp. 349 (E.D. Pa. 1987); New Castle County v. Hartford Accid......
  • CHAPTER 7 CURRENT ENVIRONMENTAL INSURANCE COVERAGE ISSUES
    • United States
    • FNREL - Special Institute Natural Resources & Environmental Litigation II (FNREL)
    • Invalid date
    ...finding that the insured has to meet only one standard: the "unexpected and unintended" standard. USF&G v. Thomas Solvent Company, 683 F. Supp. 1139 (W.D. Mich. 1988); Claussen v. Aetna Casualty & Surety Company, 676 F. Supp. 1571 (S.D. Ga. 1987), question certified 865 F.2d 1217 (11th Cir.......
  • Litigating Lost or Missing Insurance Policies
    • United States
    • Colorado Bar Association Colorado Lawyer No. 25-10, October 1996
    • Invalid date
    ...policy admitted as to terms and conditions of insured's lost policies); but see U.S. Fidelity & Guar. Co. v. Thomas Solvent Co., 683 F.Supp. 1139, 1171-72 (W.D. Mich. 1988) (testimony insufficient to show that insured's policies contained same terms and conditions as standard forms). 14. Se......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT