Opinion
Civil Action No. 00-11184-PBS
January 31, 2002
REPORT AND RECOMMENDATION ON MOTION OF DEFENDANT CONTINENTAL CASUALTY COMPANY FOR PARTIAL SUMMARY JUDGMENT FOR THE OMRO SITE
This matter is before the court on the "Motion of Defendant Continental Casualty Company for Partial Summary Judgment for the Omro Site Because No Property Damage Occurred During the Policy Periods" (Docket #103). For the reasons detailed herein, this court recommends to the district judge to whom this case is assigned that the motion of Continental Casualty Company ("CNA") for summary judgment be DENIED as the facts relating to the cause and scope of the cleanup costs at issue are in dispute. This court further recommends that CNA's request for costs associated with the filing of the motion be DENIED.
STATEMENT OF FACTS
Unless otherwise indicated, the facts are derived from the Statement of Undisputed Material Facts ("SF") included in CNA's Memorandum of Law (Docket #104). In citing to the Statement of Facts, the court has also considered "Plaintiff Raytheon Company's Response to CNA's Concise Statement of Allegedly Undisputed Facts" ("Raytheon Response") included in Raytheon's Opposition to the motion for summary judgment (Docket #115).
This action raises issues of insurance coverage for environmental contamination at sites owned at various times by the plaintiff Raytheon. SF at ¶ 1. Among the 63 sites listed in Raytheon's complaint is the "Omro Industrial Park Site, Omro, Wisconsin and Thermal Treatment Facility, Green Bay, Wisconsin." SF at ¶ 2, Compl. at ¶ 6(ss). Raytheon is seeking coverage under three multi-year primary comprehensive general liability policies allegedly issued by CNA which cover the period January 1, 1969 to April 1, 1990. SF at ¶¶ 3, 4. All of these policies cover, in relevant part, property damage which occurs "during the policy period." SF at ¶¶ 5, 6.
Beginning in the 1940s, Speed Queen operated an aluminum facility in Omro, Wisconsin. Luhrs Aff. at ¶ 3. Raytheon purchased the facility in 1979 during the policy period. Id.; see SF at ¶ 7. In 1995, Raytheon sought to expand the Speed Queen facility, and removed contaminated soil. SF at ¶ 8. At that time, Raytheon understood that the soil was contaminated with petroleum. Id. For present purposes, it appears that all contamination occurred prior to 1990, during the policy period. Raytheon Response at ¶ 15. This contaminated soil was moved to the Omro Industrial Park Site ("OIP") in July 1995. SF at ¶ 9. From there, it was moved to the Thermal Treatment Facility in October 1995. SF at ¶ 11. Around this time, Raytheon discovered that in addition to petroleum, the soil was contaminated with PCBs. Id. During 1996, the contaminated soil from OIP and the Thermal Treatment Facility was shipped to another facility in Utah. SF at ¶ 13. The Utah facility was able to receive and treat PCB contaminated soil. Id.
Scope of Motion for Summary Judgment
In its motion for summary judgment, CNA initially alleged that "Raytheon has not made a claim in this action for defense or indemnity with regards to any pollution or property damage at the Speed Queen facility itself." SF at ¶ 8 n. 2. As a result, CNA's motion addresses only contamination at the Omro Site to which the soil was removed from the Speed Queen facility in 1995, after the policy periods. However, Raytheon is, in fact, seeking to recover costs with regard to pollution and property damage at the Speed Queen facility. This fact complicates the situation and warrants the denial of this motion for summary judgment.
Since the motion for summary judgment was argued, Raytheon has amended its complaint to specifically add the Speed Queen Facility.
In opposing the motion for summary judgment, Raytheon asserted that "Raytheon has made clear in discovery that it is seeking costs related to contaminated soils from the Speed Queen Facility." Raytheon Response at ¶ 8. Although the Speed Queen facility was not expressly identified in the original complaint, as detailed in its opposing papers, Raytheon is seeking coverage "for all of its response costs relating to the contaminated soils from the Speed Queen Facility, including investigatory costs at the Speed Queen Facility, disposal of the contaminated soils at a facility in Utah after the soils had been temporarily stored at OIP and the Thermal Treatment Facility and any future costs relating to excavation and disposal of contaminated soils still at the Speed Queen Facility." Raytheon Response at ¶ 10. The fact that Raytheon would be seeking coverage for the clean up of the Speed Queen Facility was made clear to CNA even before suit was filed. See, e.g., Exhibits to CNA's Memorandum of Law (Docket #105) at Ex. 8, ¶ 50 (8/11/99 letter from Raytheon's counsel to CNA stating that in addition to the substantial costs incurred in remediating OIP and the Thermal Treatment Facility, Raytheon was seeking to recover unreimbursed costs incurred in a suit against "the prior owner of the Omro facility," which in context clearly meant the Speed Queen facility in Omro, plus $27,000 in site investigation costs and $300,000 in attorneys' fees incurred in connection with that litigation).
Faced with this response, CNA shifted its argument in connection with its motion and, as detailed below, relied on facts concerning the cause and scope of contamination at the Omro Site which are in dispute. CNA did concede, in its Reply Memorandum (Docket #118), that "it is not property damage at Speed Queen that is at issue in this Motion regarding the Omro Site," but left open the issue whether contamination at the Speed Queen facility is at issue in this litigation. See Reply Memorandum at 1-2. That issue has been resolved by the recent amendment of the complaint. See note 2, supra.
Contamination at OIP
Raytheon conceded at argument that to the extent costs were incurred remediating new pollution at the OIP and Thermal Treatment sites caused by the delivery of the contaminated Speed Queen soil there, as opposed to merely storing the soil at those sites in transit to Utah, that new pollution would not be covered by the policy. This would seem to resolve the motion for summary judgment since coverage is limited to occurrences which took place during the policy period. See Trustees of Tufts Univ. v. Commercial Union Ins. Co., 415 Mass. 844, 853, 616 N.E.2d 68, 74 (1993) ("the very nature of an `occurrence' as opposed to a `claims-made' policy is to provide coverage for property damage that occurred during the policy period whenever that liability is imposed."). Thus, Raytheon does not dispute that new contamination caused to the soil at OIP and the Thermal Treatment Facility by the delivery of contaminated soil there in 1995 is not covered by any CNA policy. As the court held in Burt Rigid Box Inc. v. Travelers Prop. Cas. Corp., 126 F. Supp.2d 596, 636 (W.D.N.Y. 2001) (relying on Avondale Indus., Inc. v. Travelers Indem. Co., 774 F. Supp. 1416, 1424, 1427 (S.D.N.Y. 1991)), "with regard to occurrence based CGL policies, insurers can never be required to indemnify plaintiffs suing in private actions for personal injuries and property damage attributable to hazardous waste generated by a polluter and deposited into the subject hazardous waste site after the relevant insurance policies expire because such claims conclusively are not within the policy's definition of an occurrence." Accord Arco Indus. Corp. v. Travelers Ins. Co., 730 F. Supp. 59, 63 (W.D. Mich. 1989).
Nevertheless, in light of the disputed facts relating to the cause and scope of costs incurred by Raytheon in connection with the OIP and Thermal Treatment Facility sites, I recommend that the motion for summary judgment be denied. For example, Raytheon apparently contends that it should be entitled to recover (unspecified) costs relating to the shipment of soils from Speed Queen to OIP, then to the Thermal Treatment Facility, and then to their ultimate destination in Utah. See Opposition at 4 ("the bulk of soils sent to the Utah Facility from OIP and the Thermal Facility originated at the Speed Queen Facility"). Such costs of shipment may be recoverable if they are part of the cleanup costs incurred in connection with the Speed Queen Facility. See Hazen Paper v. U.S. Fid. Guar. Co., 407 Mass. 689, 699-700, 555 N.E.2d 576, 582-83 (1990). However, the record is devoid of sufficient facts to make this assessment.
More importantly, when CNA brought the motion for summary judgment, it argued that Raytheon was not seeking any costs relating to the Speed Queen Facility, and that the substantial costs at issue must, therefore, relate to direct cleanup costs for post-policy contamination at OIP and the Thermal Treatment Facility. As CNA asserted:
The insurance coverage Raytheon seeks in this action for the Omro Site is for its costs associated with its clean-up and removal of contaminated soil from the OIP and the Thermal Treatment Facility. See Ex. 1, Complaint at ¶ 6(ss). Raytheon incurred approximately $737,000 to remediate OIP and approximately $779,000 to remediate the Thermal Treatment Facility, as well as $27,000 in site investigation costs and approximately $300,000 in attorneys' fees. See Ex. 8, August 11, 1999, letter from Robert S. Sanoff to Continental. In all, Raytheon seeks at least $2 million from Continental in connection with the Omro Site. See Ex. 6, Luhrs Dep. Ex. 3.
SF at ¶ 14. However, Raytheon disputes these allegations, at least in part. Raytheon contends that among those costs it is seeking are "response costs related to the contaminated soils from the Speed Queen facility. . . ." Raytheon Response at ¶ 14. Moreover, Raytheon has submitted the affidavit of Robert Luhrs, Manager of Remedial Programs at Raytheon, in which he attests that of the $737,000 relating to OIP and $779,000 relating to the Thermal Treatment Facility, "[m]ost of these costs were directly related to removing the contaminated soil that had been originally located at the Speed Queen Facility to the Utah Facility and for transportation and disposal of this soil at the Utah Facility." Luhrs Aff. at ¶ 6. The $27,000 in site investigation costs and $300,000 in attorneys' fees appear to relate to the Speed Queen Facility and a suit against the former owner of that site. See CNA's Mem. of Law at Ex. 8, ¶ 50; Raytheon Opp. at 2, n. 1. The record does not establish, as CNA contends, "that Raytheon incurred, and seeks indemnification from Continental for, the property damage Raytheon caused at the Omro Site in 1995 and not for damages at the Speed Queen facility." CNA Reply Memorandum at 4-5. Since the relevant facts are in dispute, the motion for summary judgment should be denied.
CNA disputes this assertion. However, there are insufficient details in the record to be able to analyze these costs.
CONCLUSION
The parties are hereby advised that under the provisions of Rule 72, Fed.R.Civ.P., any party who objects to these proposed findings and recommendations must file a written objection thereto with the Clerk of this Court within 10 days of the party's receipt of this Report and Recommendation. The written objections must specifically identify the portion of the proposed findings, recommendations or report to which objection is made and the basis for such objections. The parties are further advised that the United States Court of Appeals for this Circuit has repeatedly indicated that failure to comply with this Rule shall preclude further appellate review. See Keating v. Sec'y of Health Human Servs., 848 F.2d 271, 275 (1st Cir. 1988); United States v. Valencia-Copete, 792 F.2d 4 (1st Cir. 1986); Park Motor Mart, Inc. v. Ford Motor Co., 616 F.2d 603, 604-605 (1st Cir. 1980); United States v. Vega, 678 F.2d 376, 378-379 (1st Cir. 1982); Scott v. Schweiker, 702 F.2d 13, 14 (1st Cir. 1983); see also Thomas v. Arn, 474 U.S. 140, 106 S.Ct. 466 (1985). Accord Phinney v. Wentworth Douglas Hosp., 199 F.3d 1, 3-4 (1st Cir. 1999); Henley Drilling Co. v. McGee, 36 F.3d 143, 150-151 (1st Cir. 1994); Santiago v. Canon U.S.A., Inc., 138 F.3d 1, 4-5 (1st Cir. 1998).
For the reasons stated herein, this court recommends that the "Motion of Defendant Continental Casualty Company for Partial Summary Judgment for the Omro Site Because No Property Damage Occurred During the Policy Periods" (Docket #103) be DENIED, and that CNA's request for costs associated with the filing of the motion be DENIED.