US v. Pepper's Steel and Alloys, Inc., No. 85-0571-CIV

CourtUnited States District Courts. 11th Circuit. United States District Courts. 11th Circuit. Southern District of Florida
Writing for the CourtReuben Bussey, Office of Regional Counsel, U.S. E.P.A., Atlanta, GA
Citation823 F. Supp. 1574
PartiesUNITED STATES of America, Plaintiff, v. PEPPER'S STEEL AND ALLOYS, INC.; Florida Power & Light Company; Norton Bloom; Thomas A. Curtis; William Payne; Flora Payne; and Lowell Payne, Defendants. PEPPER'S STEEL AND ALLOYS, INC.; and Norton Bloom, Cross-Plaintiffs, v. FLORIDA POWER & LIGHT COMPANY, Cross-Defendant. Thomas A. CURTIS; William Payne; Flora Payne; and Lowell Payne, Cross-Plaintiffs, v. FLORIDA POWER & LIGHT COMPANY; and Pepper's Steel & Alloys, Inc., Cross-Defendants. FLORIDA POWER & LIGHT COMPANY, Cross-Plaintiff and Third-Party Plaintiff, v. PEPPER'S STEEL AND ALLOYS, INC.; Norton Bloom; Thomas A. Curtis; William Payne; Flora Payne; and Lowell Payne, Cross-Defendants, and United States Fidelity and Guaranty Company; Transportation Insurance Company; Continental Casualty Company; The Home Insurance Company; Certain Underwriters at Lloyd's, London and Insurance Companies Subscribing To Twenty-Two Policies Numbered Inclusively L116-18, L1024-27, L1209-12, C116-18, C1024-27, and C1209-12; and Miami Battery Manufacturing Company, Third-Party Defendants. MIAMI BATTERY MANUFACTURING COMPANY, Cross-Plaintiff and Third-Party Plaintiff, v. PEPPER'S STEEL AND ALLOYS, INC., Cross-Defendant, and Florida Power & Light Company, Third-Party Defendant. PEPPER'S STEEL AND ALLOYS, INC.; and Norton Bloom, Plaintiffs, v. UNITED STATES FIDELITY AND GUARANTY COMPANY; Transportation Insurance Company; Continental Casualty Company; and the Home Insurance Company, Defendants.
Decision Date07 June 1993
Docket Number86-1531-CIV.,No. 85-0571-CIV

823 F. Supp. 1574

UNITED STATES of America, Plaintiff,
v.
PEPPER'S STEEL AND ALLOYS, INC.; Florida Power & Light Company; Norton Bloom; Thomas A. Curtis; William Payne; Flora Payne; and Lowell Payne, Defendants.

PEPPER'S STEEL AND ALLOYS, INC.; and Norton Bloom, Cross-Plaintiffs,
v.
FLORIDA POWER & LIGHT COMPANY, Cross-Defendant.

Thomas A. CURTIS; William Payne; Flora Payne; and Lowell Payne, Cross-Plaintiffs,
v.
FLORIDA POWER & LIGHT COMPANY; and Pepper's Steel & Alloys, Inc., Cross-Defendants.

FLORIDA POWER & LIGHT COMPANY, Cross-Plaintiff and Third-Party Plaintiff,
v.
PEPPER'S STEEL AND ALLOYS, INC.; Norton Bloom; Thomas A. Curtis; William Payne; Flora Payne; and Lowell Payne, Cross-Defendants,
and
United States Fidelity and Guaranty Company; Transportation Insurance Company; Continental Casualty Company; The Home Insurance Company; Certain Underwriters at Lloyd's, London and Insurance Companies Subscribing To Twenty-Two Policies Numbered Inclusively L116-18, L1024-27, L1209-12, C116-18, C1024-27, and C1209-12; and Miami Battery Manufacturing Company, Third-Party Defendants.

MIAMI BATTERY MANUFACTURING COMPANY, Cross-Plaintiff and Third-Party Plaintiff,
v.
PEPPER'S STEEL AND ALLOYS, INC., Cross-Defendant,
and
Florida Power & Light Company, Third-Party Defendant.

PEPPER'S STEEL AND ALLOYS, INC.; and Norton Bloom, Plaintiffs,
v.
UNITED STATES FIDELITY AND GUARANTY COMPANY; Transportation Insurance Company; Continental Casualty Company; and the Home Insurance Company, Defendants.

Nos. 85-0571-CIV, 86-1531-CIV.

United States District Court, S.D. Florida.

June 7, 1993.


823 F. Supp. 1575

Lawrence W. Puckett, Environmental Enforcement Section Land & Natural Resources Div., U.S. Dept. of Justice, Washington, DC.

Robyn Herman, Asst. U.S. Atty., S.D. Fl., Miami, FL.

Reuben Bussey, Office of Regional Counsel, U.S. E.P.A., Atlanta, GA.

Michael Northridge, Office of Enforcement and Compliance Monitoring (LE-134S) U.S. E.P.A., Washington, DC.

John W. Wilcox, Akerman, Senterfitt & Eidson, P.A., Tampa, FL, for Paynes and Curtis.

Kathleen A. Touby, Touby Smith DeMahy & Drake, P.A., Miami, FL, for Miami Battery.

David B. Weinberg, Weinberg, Bergeson & Neuman, Washington, DC.

Richard C. Smith, Coll, Davidson, Carter, Smith, Salter & Barkett, P.A., Miami, FL, for FPL.

Jack Chisolm, Deputy Gen. Counsel, Tallahassee, FL.

Elizabeth Nelson, Mendes & Mount, New York City.

Kevin P. O'Connor, O'Connor & Lemos, Coral Gables, FL, for London Market Insurers.

Landon K. Clayman, Baker & McKenzie, Miami, FL, for Home.

Richard L. Wassenberg, Ponzoli & Wassenberg, P.A., Miami, FL, for USF & G.

Stanley V. Buky, George, Hartz & Lundeen, P.A., Fort Lauderdale, FL, for CNA.

Christa L. Collins, Robert J. Wahl, Susan Bingham, Blasingame, Forizs & Smiljanich, P.A., St. Petersburg, FL, Co-Counsel for CNA.

John M. Murray, Thornton, David & Murray, P.A., Miami, FL, for Home.

William Martin, Peterson & Bernard, Fort Lauderdale, FL, Co-Counsel for Pepper's and Bloom.

Dennis A. Tosh, Walter J. Andrews, Wiley, Rein & Fielding, Washington, DC, for USF & G.

Keith, Mack, Lewis, Cohen & Lumpkin, Miami, FL, for Pepper's and Bloom.

823 F. Supp. 1576

OMNIBUS ORDER

PAINE, District Judge.

This matter comes before the court on UNITED STATES FIDELITY AND GUARANTY COMPANY ("USF & G"), TRANSPORTATION INSURANCE COMPANY, CONTINENTAL CASUALTY COMPANY (collectively "CNA"), and THE HOME INSURANCE COMPANY's ("Home") Motions for Partial Summary Judgment (DE 275 in Case No. 86-1531-CIV-PAINE; DE 409),1 and FLORIDA POWER & LIGHT COMPANY's ("FP & L") Cross-Motion for Partial Summary Judgment as to the Effect of the Use of the Term "Damages" (DE 877).2 Having reviewed the record, the memoranda of counsel and relevant authorities, the court enters the following order.

I. BACKGROUND3

From approximately 1967 to 1981, Pepper's Steel operated a scrap metal recovery business in Medley, Florida. In the late 1960s, Pepper's Steel expanded its business to include reclamation of electrical transformers from FP & L. The transformers were transported to the Pepper's Steel site,4 and the salvageable metals from within the transformers were removed. The transformers frequently contained oil that was contaminated with polychlorinated biphenyls ("PCBs"), a hazardous substance under the Comprehensive Environmental Response and Compensation Liability Act of 1980, ("CERCLA"), 42 U.S.C. § 9601 et seq. In opening the transformers, the some of the PCB laden oil was discharged directly onto the surface of the ground at the Pepper's Steel site.

On July, 11, 1983, the UNITED STATES OF AMERICA ("United States"), at the request of the Environmental Protection Agency ("EPA"), brought a civil action against Pepper's Steel, NORTON BLOOM, WILLIAM U. PAYNE, FLORA B. PAYNE, LOWELL E. PAYNE, and THOMAS A. CURTIS ("the landowners"), seeking, inter alia, injunctive relief to gain access to the Pepper's Steel site to undertake response and remedial actions (Case No. 83-1717).5 FP & L subsequently was joined as a defendant in the government's action because of its potential liability under CERCLA. On March, 5, 1985, the United States brought a second action against Pepper's Steel, FP & L, and the landowners, pursuant to Section 107 of CERCLA,6 seeking to recover costs incurred by the EPA for the removal of PCBs from the Pepper's Steel site, an amount in excess of $400,000 (Case No. 85-0571). By order dated March 22, 1985, the court consolidated the 83-1717 case with the 85-0571 case.

On July 15, 1986, Pepper's Steel and Bloom filed a Complaint for Declaratory Relief and Damages, seeking a determination of the duties and obligations of USF & G, CNA, and Home under the insurance policies issued by them (Case No. 86-1531). The court denied the request to consolidate the 85-0571

823 F. Supp. 1577
case with the 86-1571 case.7

On March 26, 1987, the EPA and FP & L entered into a Consent Decree pursuant to Section 106 of CERCLA. United States v. Pepper's Steel and Alloys, Inc., 658 F.Supp. 1160 (S.D.Fla.1987). The Consent Decree extinguished FP & L's liability to the United States for "all claims for damages to natural resources," "all claims for response costs or damages of any sort incurred ... as of the entry of the Consent Decree" and all claims for future response costs or other future damages (except future damages to natural resources). Id. at 1167-68. In turn, FP & L agreed to undertake a cleanup of the Pepper's Steel site and to pay $300,000 to the United States, subject to certain setoffs for FP & L's cleanup expenses. Id. at 1164-65.

On August 21, 1987, FP & L filed a third-party complaint against certain insurers who issued it or Pepper's Steel liability insurance. In its third-party complaint, FP & L seeks a declaration that the third-party defendant insurers have an obligation, inter alia, to defend FP & L for the EPA actions as well as to indemnify FP & L for costs incurred by its complying with the Consent Decree.8

In the instant motions, the parties seek a determination of whether the environmental costs and expenses incurred in these actions constitute "damages" under the subject insurance policies.9 USF & G, CNA, and Home, the insurers, argue that the claims to recover clean-up and response costs are not covered under the subject insurance policies because they are in the nature of restitutionary or injunctive relief, rather than legal or monetary relief. In response, the insureds, Pepper's Steel10 and FP & L, argue that such costs are damages from the perspective of an ordinary person, and therefore, are covered by the insurance agreements. Recognizing the importance of this issue, the court entertained oral argument on the "damages" question on April 1, 1993. Before analyzing this issue, the court first shall examine the relevant provisions of the subject insurance policies in this matter.

The Insurance Policies

USF & G issued five primary comprehensive general liability insurance policies to Pepper's Steel,11 No. 1CC 406218, 1CC 665394, 1CC 801354, 1CC 801493, and 1CC 957152, covering the period from December 16, 1972 to December 16, 1977.12 Each of these policies provides, in relevant part, that:

The Company will pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay as damages because of
(A) bodily injury or
(B) property damage
to which this insurance applies, caused by an occurrence.
823 F. Supp. 1578

USF & G also issued several comprehensive excess indemnity insurance policies to Pepper's Steel, No. CEP 29990, CEP 29878, CEP 46095, and CEP 65692, with coverage beginning on October 18, 1973. Each USF & G comprehensive excess indemnity policy states that:

The Company will indemnify the Insured for all sums which the Insured shall become obligated to pay as damages and expenses (all as defined herein as included within the term "ultimate net loss")13 by reason of liability imposed upon the Insured by law, or by contractual liability, because of
(1) personal injury or property damage caused by, or
(2) advertising liability arising out of an occurrence which takes place anywhere.

CNA issued three comprehensive general liability insurance policies to Pepper's Steel, No. CCP 2999911, CEP 3802476, and CCP XXXXXXXXX, covering the period from December 16, 1977 to October 1, 1980. The language of these agreements is essentially the same as that contained in the USF & G primary liability policies.

CNA also issued three umbrella excess third-party liability policies to Pepper's Steel, No. RDV 3367621, RDV 4015541, and RDX 1788286, covering the period from December 16, 1977 to October 1, 1979. The CNA excess liability policies provide, in relevant part, that:

The company will indemnify the insured, with respect to any occurrence not covered by underlying insurance, or with respect to damages not covered by underlying insurance but which results from an occurrence covered by the underlying insurance, for ultimate net loss in
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8 practice notes
  • Alabama Plating Co. v. U.S. Fidelity and Guar. Co.
    • United States
    • Supreme Court of Alabama
    • December 20, 1996
    ...v. Hartford Acc. & Indem. Co., 933 F.2d 1162 (3d Cir.1991) (applying Delaware law); United States v. Pepper's Steel & Alloys, Inc., 823 F.Supp. 1574 (S.D.Fla.1993), aff'd in part, rev'd in part, 87 F.3d 1329 (11th Cir.1996) (applying Florida law); Atlantic Wood Indus., Inc. v. Lumbermen's U......
  • LaFarge Corp. v. Travelers Indem. Co., No. 93-475-CIV-25C.
    • United States
    • United States District Courts. 11th Circuit. United States District Court of Middle District of Florida
    • February 22, 1996
    ...Dahl-Eimers v. Mutual of Omaha Life Ins. Co., 986 F.2d 1379, 1381 (11th Cir.1993); See U.S. v. Pepper's Steel and Alloys, Inc., 823 F.Supp. 1574, 1579 (S.D.Fla.1993). Further, where there exists an ambiguity, insurance contracts are construed in favor of the insured, while exclusions are al......
  • Yanes v. Nat'l Specialty Ins. Co., Case No. 1:20-cv-21179-KMM
    • United States
    • United States District Courts. 11th Circuit. United States District Courts. 11th Circuit. Southern District of Florida
    • April 29, 2021
    ...the court should adopt the interpretation which will sustain coverage for the insured." United States v. Pepper's Steel & Alloys , 823 F. Supp. 1574, 1581 (S.D. Fla. 1993). And, "[i]f the language of an insurance policy is unclear, confusing, or ambiguous, the language should be construed a......
  • Oak Ford Owners Ass'n v. Auto-Owners Ins. Co., No. 8:05-CV-2136-T-27EAJ.
    • United States
    • United States District Courts. 11th Circuit. United States District Court of Middle District of Florida
    • February 28, 2007
    ...in Florida are split as to whether sums incurred for restoration are recoverable. See e.g., U.S. v. Pepper's Steel and Alloys, Inc., 823 F.Supp. 1574, 1582 (S.D.Fla.1993), aff'd in relevant part, 87 F.3d 1329 (11th Cir.1996) (finding that the term "damages" did not distinguish between legal......
  • Request a trial to view additional results
8 cases
  • Alabama Plating Co. v. U.S. Fidelity and Guar. Co.
    • United States
    • Supreme Court of Alabama
    • December 20, 1996
    ...v. Hartford Acc. & Indem. Co., 933 F.2d 1162 (3d Cir.1991) (applying Delaware law); United States v. Pepper's Steel & Alloys, Inc., 823 F.Supp. 1574 (S.D.Fla.1993), aff'd in part, rev'd in part, 87 F.3d 1329 (11th Cir.1996) (applying Florida law); Atlantic Wood Indus., Inc. v. Lumbermen's U......
  • LaFarge Corp. v. Travelers Indem. Co., No. 93-475-CIV-25C.
    • United States
    • United States District Courts. 11th Circuit. United States District Court of Middle District of Florida
    • February 22, 1996
    ...Dahl-Eimers v. Mutual of Omaha Life Ins. Co., 986 F.2d 1379, 1381 (11th Cir.1993); See U.S. v. Pepper's Steel and Alloys, Inc., 823 F.Supp. 1574, 1579 (S.D.Fla.1993). Further, where there exists an ambiguity, insurance contracts are construed in favor of the insured, while exclusions are al......
  • Yanes v. Nat'l Specialty Ins. Co., Case No. 1:20-cv-21179-KMM
    • United States
    • United States District Courts. 11th Circuit. United States District Courts. 11th Circuit. Southern District of Florida
    • April 29, 2021
    ...the court should adopt the interpretation which will sustain coverage for the insured." United States v. Pepper's Steel & Alloys , 823 F. Supp. 1574, 1581 (S.D. Fla. 1993). And, "[i]f the language of an insurance policy is unclear, confusing, or ambiguous, the language should be construed a......
  • Oak Ford Owners Ass'n v. Auto-Owners Ins. Co., No. 8:05-CV-2136-T-27EAJ.
    • United States
    • United States District Courts. 11th Circuit. United States District Court of Middle District of Florida
    • February 28, 2007
    ...in Florida are split as to whether sums incurred for restoration are recoverable. See e.g., U.S. v. Pepper's Steel and Alloys, Inc., 823 F.Supp. 1574, 1582 (S.D.Fla.1993), aff'd in relevant part, 87 F.3d 1329 (11th Cir.1996) (finding that the term "damages" did not distinguish between legal......
  • Request a trial to view additional results

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