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Quincy Mutual Fire Insurance Company v. Borough of Bellmawr

March 20, 2001

QUINCY MUTUAL FIRE INSURANCE COMPANY, PLAINTIFF-APPELLANT,
v.
BOROUGH OF BELLMAWR, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY; CENTURY INDEMNITY COMPANY F/K/A CIGNA COMPANIES F/K/A THE INSURANCE COMPANY OF NORTH AMERICA; HARLEYSVILLE INSURANCE COMPANY; AND CAMDEN COUNTY JOINT INSURANCE FUND, DEFENDANTS-RESPONDENTS, AND MARINCO, INC., DEFENDANTS.



On appeal from Superior Court of New Jersey, Law Division, Camden County, Docket No. CAM-L-8252-96.

Before Judges Skillman, Wecker and Lesemann.

The opinion of the court was delivered by: Lesemann, J.A.D.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued October 3, 2000

This appeal concerns allocation of insurer responsibility for environmental pollution liability of the Borough of Bellmawr (Bellmawr) caused by the Borough's dumping municipal waste into a landfill facility. The trial court held that Quincy Mutual Fire Insurance Company (Quincy) bore all of that responsibility. Quincy appeals that determination, claiming that Century Indemnity Company (Century) had insured Bellmawr during some of the time when the Borough was dumping waste into the landfill which subsequently "leaked" and permitted leaching of contaminants into ground water and the surrounding environment. Quincy argues that the trial court erred in concluding that an "occurrence" triggering Bellmawr's liability, and thus triggering insurance company liability, took place only when the contaminants from the landfill first reached the ground water, approximately 200 days after dumping began. By that time Quincy (not Century) was insuring Bellmawr, and the trial court held that Quincy was therefore obligated to defend and indemnify Bellmawr.

We agree with the trial court's conclusion. We are satisfied that under the principles set out in Owens-Illinois, Inc. v. United Ins. Co., 138 N.J. 437 (1994), Hartford Accident & Indemnity Co. v. Aetna Life & Cas. Ins. Co., 98 N.J. 18 (1984), and Astro Pak Corp. v. Fireman's Fund Ins. Co., 284 N.J. Super. 491 (App. Div.), certif. denied, 143 N.J. 323 (1995), a triggering occurred only when the leaching from the landfill caused "damage," and not at the earlier time when Bellmawr simply deposited municipal waste into a landfill designed for that purpose. Thus, we affirm the determination that Century has no obligation to Bellmawr directly, or to Quincy by way of contribution.

We are also satisfied that under principles of res judicata, Quincy cannot now maintain an action against Bellmawr or against Harleysville Insurance Company (Harleysville), an insurer who came "on the risk" after Quincy, since the claims raised in those actions were previously resolved and may not now be re-litigated.*fn1 Finally, we conclude that the last insurer involved, Camden County Joint Insurance Fund (JIF) is absolved from any responsibility by the "absolute pollution exclusion" language in its policy. Thus, we affirm the decision under appeal in its entirety.

I.

As they relate to this appeal, the facts of the case are not complicated. Sometime between April 27, 1978 and early May 1978, Bellmawr began dumping its municipal waste at a facility known as the Kramer Landfill. In early 1981, complaints were registered respecting the Kramer Landfill, and Bellmawr ceased dumping there at the end of January 1981. On March 3, 1981, the landfill was closed pursuant to a court order and, thereafter, the United States Environmental Protection Agency (EPA) ordered a series of remedial actions designed to clean up the contamination that had emanated from the site.

The EPA then instituted cost recovery proceedings against a number of parties which had allegedly contributed to the Kramer contamination. Bellmawr was one of those parties and, along with several other defendants and third party defendants, it settled its dispute with the EPA by making a financial contribution ($449,036) to the cleanup expense.

During the time it was dumping at the Kramer site (and thereafter while the cleanup took place), Bellmawr maintained, sequentially, liability insurance with a number of different carriers. The companies, and their respective coverage periods are as follows:

Insurer Policy Period

Century 6/18/77 - 6/18/78

Quincy 6/18/78 - 6/18/81

Harleysville 6/18/81 - 6/18/85

Marinco, Inc.*fn2 6/18/85 - 12/31/86

No Insurance: Bellmawr was uninsured 1/1/87 - 1/31/87

JIF 2/1/87 - 12/31/90

Those coverage periods present one of the two time factors critical to fixing insurer responsibility for Bellmawr's loss. The other is embodied in the trial judge's finding that,

based on the stipulation [of the parties] and the testimony, particularly that of [Century's expert witness] Dr. Lee Snyder, . . . any contaminants placed in the landfill during May and June of 1978, would take approximately 200 days from the beginning of May to reach and pollute the ground water.

Thus, while contaminated refuse was deposited at the Kramer Landfill by the Borough during the last two months of Century's policy, it did not cause pollution or damage to the ground water and surrounding area until October or November of 1978 [by which time Quincy was providing the Borough's insurance].

On that basis the trial court held, and we agree, that Quincy, not Century is responsible for Bellmawr's loss. That is so because insurer liability is based not on when dumping took place, but on when "damage" occurred. And here, damage occurred when the leaching contaminants reached ground water, at a time when Quincy's policy was in effect.

This issue—-when an "occurrence" takes place to trigger liability insurance coverage—-was first addressed by our Supreme Court in Hartford Accident and Indemnity Co. v. Aetna Life and Casualty Ins. Co., supra. There, the Court held such a triggering event takes place when injury is inflicted upon a victim. In that case, a child had been exposed to a potentially dangerous drug at a time when plaintiff Hartford was insuring the drug manufacturer. However, the child suffered injury from the drug only at some point thereafter, when Aetna's policy was in effect. The Court held that the time of the "occurrence," which precipitated liability and determined which insurer was "on the risk," turned on when the victim was ...


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