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CPS Chemical Co. v. Continental Insurance Co.

Decided: July 16, 1985.

CPS CHEMICAL COMPANY, INC., PLAINTIFF-RESPONDENT,
v.
THE CONTINENTAL INSURANCE COMPANY, DEFENDANT-RESPONDENT, AND UNITED STATES FIDELITY & GUARANTY CO., DEFENDANT-APPELLANT



On appeal from the Superior Court of New Jersey, Law Division, Essex County whose opinion is reported at 199 N.J. Super. 558 (Law Div. 1984).

King, Deighan and Bilder.

Per Curiam

[203 NJSuper Page 16] This appeal is taken from an interlocutory order ruling that several insurance carriers had a duty as a matter of law to

defend a pollution liability claim under a general comprehensive liability policy. In this action plaintiff CPS Chemical Company, Inc. (CPS) sought a declaration that defendants, the Continental Insurance Company (Continental) and United States Fidelity & Guaranty Company (U.S.F. & G.), were obligated to defend and indemnify it under their comprehensive liability policies despite pollution, completed operations, and products liability exclusions.

The dispute arises out of a law suit, presently pending in the United States District Court for the Eastern District of Pennsylvania, City of Philadelphia v. Stepan Chemical Company, No. 81-8051, in which the City has alleged that CPS and 33 other defendants generated toxic wastes which were illegally deposited in a city garbage dump causing consequential damages to the environment.

On August 4, 1982 Federal Judge Ditter granted partial judgment on the pleadings for defendants in the Eastern District action. His order recited

1. The motion is granted on plaintiff's claims pursuant to the Clean Water Act (Count II); the federal common law of nuisance (Count III); the Pennsylvania Solid Waste Management Act (Count V); the Clean Stream Law (Count VI); and the Philadelphia Code (Count IX).

2. The motion is denied on plaintiff's claim for response costs under the Comprehensive Environmental Response, Compensation and Liability Act (Count I); common law nuisance (Count III): common law strict liability (Count IV); common law trespass (Count VII), and negligence (Count VIII).

Thus there remained pending against CPS common-law nuisance and trespass actions.

On August 8, 1984 the Law Division judge issued an opinion entering a partial summary judgment in this action before us which declared that the defendants Continental and U.S.F. & G. were obligated under their general comprehensive liability policies to provide a defense for plaintiff in the law suit pending in the Eastern District. See 199 N.J. Super. 558 (Law Div.1984). We granted U.S.F. & G.'s motion for leave to appeal from that order. R. 2:2-4.

In the federal suit the City has alleged that CPS contracted with ABM Disposal Service Company (ABM) to dispose of hazardous waste generated by CPS. The City also alleged that ABM illegally dumped these wastes on property owned by the City on numerous occasions from October 9, 1974 up to December 10, 1975. The Continental policy was in effect from March 2, 1974 to March 2, 1975; the U.S.F. & G. policy was in effect from March 2, 1975 to March 2, 1977. The surviving counts of the complaint allege both common-law and statutory theories of liability for which there may be coverage and seemingly intentional tort theories for which there may be no coverage.*fn1

At the summary judgment hearing on February 14, 1984 the attorney for CPS told the Law Division judge that the City had dropped or was about to drop the intentional tort ...


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