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CPS Chemical Co. v. Continental Insurance Co.

Decided: August 8, 1984.


Landau, J.s.c.


In this matter CPS Chemical Company, Inc., seeks declaratory judgment for indemnification and defense under a comprehensive general liability policy.

The present motion is for partial summary judgment against each of the insurance carriers to declare their obligation to defend plaintiff in the underlying liability suit entitled City of Philadelphia v. Stepan Chemical Co., et al., 544 F. Supp. 1135 (E.D.Pa.1982) in which plaintiff is a named defendant. The liability suit, presently pending in the U.S. District Court for the Eastern District of Pennsylvania, arises out of allegations of the City of Philadelphia that CPS and 33 other defendants

generated toxic wastes which were illegally deposited in a city garbage dump.

Based on the statement of facts in defendants' proofs, it is not disputed, for the purposes of this motion, that CPS contracted with the ABM Disposal Company to remove and properly dispose of its waste material. Further, for the purposes of this motion we may assume that ABM removed wastes from plaintiff's premises and, without plaintiffs knowledge, later deposited these wastes at the Philadelphia dump on 16 separate occasions. The first such occasion was on October 9, 1974. Thereafter individual dumpings occurred on 15 more occasions ending December 10, 1975. In its suit Philadelphia seeks to hold CPS liable for clean-up costs, consequential damages and penalties, alleging causes of action under:

1.) The "Superfund" Act of 1980, 42 U.S.C.A. §§ 9601-9657.

2.) The "Clean Water" Act, 33 U.S.C.A. 1251.

3.) Common law nuisance, Restatement, Torts 2d, § 821B (1965).

4.) Common law strict liability for ultra-hazardous activities Restatement, Torts 2d (1965).

5.) The Pennsylvania Solid Waste Management Act 35 Pa.Stat.Ann. § 6018.101.

6.) The Pennsylvania "Clean Streams" law 35 Pa.Stat.Ann. § 691.3.

7.) Common law negligence.

8.) City Code of Philadelphia concerning use of city property for dumping. Phil.Code § 10-710.

A count for intentional tort and reckless trespass was originally included but dropped from the city's complaint against CPS. One of the theories of action by the city against CPS is that it negligently selected ABM as its waste disposal agent.

Plaintiff's motion for summary judgment to compel a defense requires that the allegations of the underlying complaint fall within the risks insured. The nature of the claim determines whether the insurer is obliged to defend, after the language of the policy has been explored. Ohio Casualty v. Flanagin, 44 N.J. 504 (1965).

It is not disputed that a comprehensive general liability policy from Continental was in effect between March 2, 1974 and March 2, 1975; and that similar policies issued by United States Fidelity and Guaranty Company (U.S.F. & G) were in effect from March 2, 1975 through March 2, 1977; and that timely request for a defense was made by plaintiff. Plaintiff now conducts its own defense in the City of Philadelphia action.

Defendants deny that the Philadelphia complaint asserts any causes of action which require a defense or indemnification under the comprehensive general liability policies. They rely on exclusionary provisions contained in such policies and deny that an "occurrence" exists under the policy definition. They also dispute whether the policies are applicable to the time which they urge is relevant in determining the existence of an "occurrence."

Mindful that the policies provide that a defense must be rendered for injury or property damage asserted as "to which this insurance applies," each of these objections will be separately analyzed.


Existence of an " Occurrence."

Under each of the policies "occurrence" is defined as "an accident, including continuous or repeated exposure to conditions, which results in bodily injury or property damage neither expected nor intended from the standpoint of the insured."

Concededly, suit has been brought against CPS for damages, based on physical injury to tangible property. None of the remaining counts in the Philadelphia suit assert that CPS intended or expected to cause property damage or expected ABM to illegally deposit the wastes. Nor is it alleged that CPS expected the ...

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