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Devcon International Corp. v. Reliance Insurance Co.

June 8, 2010

DEVCON INTERNATIONAL CORPORATION; V.I. CEMENT & BUILDING PRODUCTS, INC. D/B/A MARK 21 INDUSTRIES, INC., D/B/A CONTROLLED CONCRETE PRODUCTS, INC., D/B/A SPRINGFIELD CRUSHER, APPELLANTS,
v.
RELIANCE INSURANCE COMPANY; VIRGIN ISLANDS INSURANCE GUARANTY ASSOCIATION, APPELLEES.



On Appeal from the District Court of the Virgin Islands (D.C. No. 01-cv-201) District Judge: Curtis V. Gomez.

The opinion of the court was delivered by: Jordan, Circuit Judge.

PRECEDENTIAL

Submitted Under Third Circuit LAR 34.1(a) May 6, 2010

Before: SMITH, CHAGARES and JORDAN, Circuit Judges.

OPINION OF THE COURT

Devcon International Corporation ("Devcon") appeals an order of the District Court of the Virgin Islands of the United States entering a declaratory judgment in favor of Reliance Insurance Company ("Reliance") on Devcon's claim that Reliance is required to defend and indemnify Devcon in a nuisance action brought against it in the Superior Court of the Virgin Islands ("the underlying action"). For the reasons that follow, we will affirm.

I. Factual Background

This case arises from an alleged nuisance caused by Virgin Islands Cement ("V.I. Cement"), a subsidiary of Devcon, at the Henry E. Rohlsen Airport ("the airport") on the island of St. Croix, Virgin Islands.

A. Facts Alleged In The Underlying Complaint

In September 1999, the Virgin Islands Port Authority ("VIPA"), which operates the airport, retained V.I. Cement to act as general contractor on a project to extend the airport's sole runway. Construction began the following month and generated large quantities of dust, which drifted over property belonging to the plaintiffs in the underlying action, all of whom live near the airport. The dust allegedly contaminated the plaintiffs' drinking water and cisterns and caused breathing disorders and other unspecified physical, emotional, and psychological damage. The plaintiffs also alleged that emissions from construction vehicles were causing similar problems, and that construction noise from the project deprived them of the quiet enjoyment of their properties.

In the spring of 2000, one of the plaintiffs filed a formal complaint with the Virgin Islands Department of Planning and Natural Resources ("DPNR"). DPNR investigators conducted an examination of the site and ordered VIPA to undertake immediate dust control measures and to submit a written plan for the relocation of residents during construction. On March 31, 2000, the DPNR issued a supplemental order that required VIPA to provide residents with uncontaminated potable water. On June 7, 2000, it rescinded its prior requirement that VIPA draft a plan for relocating residents, but it imposed additional dust remediation obligations. According to plaintiffs, neither VIPA nor its general contractor, V.I. Cement, ever fully remediated the dust problem, which continued despite the DPNR orders.

Plaintiffs filed the underlying suit on April 6, 2001, advancing various nuisance-related claims. The plaintiffs amended their complaint several times, the final version of which sets forth claims against V.I. Cement for nuisance, breach of the DPNR orders, trespass, negligence, and negligent and intentional infliction of emotional distress.

B. The Pollution Exclusion And Proceedings In The District Court

V.I. Cement, acting through its parent company, Devcon, tendered defense of the plaintiffs' claims to Reliance, which had issued a ...


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