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Solvents Recovery Service of New England v. Midland Insurance Co.

Decided: June 3, 1987.

SOLVENTS RECOVERY SERVICE OF NEW ENGLAND, ET AL., PLAINTIFFS,
v.
MIDLAND INSURANCE COMPANY, ET AL., DEFENDANTS, NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURG, PA., PLAINTIFFS, V. THE HOME INDEMNITY COMPANY, DEFENDANT/DEFENDANT-APPELLANT ON THE CROSSCLAIM, SOLVENTS RECOVERY SERVICE OF NEW JERSEY, INC., AND SOLVENTS RECOVERY SERVICE OF NEW ENGLAND, INC., DEFENDANTS/PLAINTIFFS-RESPONDENTS ON THE CROSSCLAIM



On appeal from the Superior Court, Law Division, Union County.

Dreier, Shebell and Stern. The opinion of the court was delivered by Shebell, J.A.D.

Shebell

[218 NJSuper Page 50] Appellant, Home Indemnity Company ("Home"), appeals on leave granted from a decision of the Law Division striking

certain of its defenses to a crossclaim for declaratory judgment brought by plaintiff, Solvents Recovery Service of New England, Inc., and Solvents Recovery Service of New Jersey, Inc. ("Solvents").

The January 5, 1987 order appealed from in these actions, involving insurance coverage for clean up costs at two waste hazard sites, contains the following rulings: Home "did not and could not suffer any prejudice as a result of late notice . . .;" Home's "motion for summary judgment on the issue of late notice is denied . . .;" and Solvents' "motion and crossmotion for summary judgment on the issue of late notice are granted in that plaintiffs' alleged breaches of conditions 4(a), 4(b), 4(c) and 5 of its insurance policy with the Home Indemnity Co. shall not foreclose or otherwise interfere with or adversely affect any right to insurance coverages of plaintiffs with respect to Count Two ("Ottati & Goss") and Count Three ("Enviro-Chem") of plaintiffs' amended complaint."

The "Ottati & Goss site" which is the subject of Count Two is a parcel of land in Kingston, New Hampshire. The United States Environmental Protection Agency ("EPA") alleged that the site was used as a chemical waste storage and disposal area in 1978 and 1979. In May 1980 the EPA filed a civil action in the United States District Court for the District of New Hampshire against the owners and operators of the site. On August 13, 1982 third party complaints were filed against Solvents and other companies who had disposed of their allegedly hazardous waste at that site. It was alleged that the site posed an imminent and substantial danger to health and the environment due to the hazardous wastes which were alleged to be stored or disposed of there. The government sought injunctive relief, restitution, and costs from the defendants in order to clean up the site.

Midland Insurance Company ("Midland") provided Solvents with comprehensive general liability insurance from August 22, 1978 until August 22, 1980; National Union Fire Insurance Company ("National Union") provided coverage from August

22, 1980 to June 30, 1982; and Home provided it from June 30, 1982 to July 1, 1983.

Between April 1978 and March 1979 Solvents shipped waste to the Ottati & Goss site. By letters dated October 4, 1982 and November 23, 1982 Solvents gave notice of the Ottati & Goss action to Midland. Midland notified Solvents by letter dated December 6, 1982 that it disclaimed coverage and would not assume Solvents' defense in the pending action.

The United States District Court bifurcated trial of the action. The liability portion of the trial lasted over 113 days during 1983 and 1984. On December 9, 1985 Solvents was held strictly liable as a generator of hazardous waste that was deposited at the site. The damages trial of the action commenced on February 1, 1987.

Home became aware of the Ottati & Goss litigation on November 12, 1985 when National Union filed a declaratory judgment action against Home. Home has not attempted to enter the Ottati & Goss action.

Count Three of plaintiffs' declaratory judgment complaint involves the site of Environmental Conservation and Chemical Corporation, formerly Enviro-Chem Corporation ("Enviro-Chem"), a solid waste disposal facility in Zionsville, Indiana. Solvents had shipped waste material ...


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