ELR Citation: ELR 20582
No(s). s. 88-2051, -2106 (6th Cir. Mar 1, 1990)

The court holds that an insurance policy's pollution exclusion provision bars recovery of an insured manufacturing company's nuisance settlement costs and industrial waste cleanup costs under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). The insured manufacturing company had liquid industrial waste removed from its manufacturing facility to a lagoon disposal site, where waste spilled onto the ground from draining hoses. The policy excluded coverage for damage caused by pollution, unless the damage was caused by a sudden and accidental discharge. The court holds that mere delivery of waste over a period of years to a waste storage facility is not a discharge of pollutants into the environment, and any discharges at the disposal site cannot be considered sudden and accidental. Construing Michigan law in a diversity action, the court reasons that the plain meaning of a sudden and accidental event is one that happens quickly, without warning, and fortuitously or unintentionally. The court holds, therefore, that the insured manufacturing company has no cause of action for costs arising from pollution damage associated with the nuisance or CERCLA cleanup actions, and any payments made to settle these actions were voluntary.

Counsel for Plaintiff-Appellant, Cross-Appellee
Wallace Sagendorph
5455 Corporate Dr., Ste. 301, Troy MI 48098
(313) 641-1860

Counsel for Defendent-Appellee, Cross-Appellant
Robert Brignall
Vandeveer & Garzia
333 W. Fort St., Ste. 1600, Detroit MI 48226
(313) 961-4880

Before: MERRITT, Chief Judge; RYAN, Circuit Judge; and BROWN, Senior Circuit Judge.