ELR Citation: ELR 21000
No(s). 88 Civ. 1041 (JFK) (S.D.N.Y. Nov 27, 1991)

The court, on reargument of summary judgment motions necessitated by intervening Michigan Supreme Court decisions, holds that insurers of a beer manufacturer are not required to provide the manufacturer with coverage under its comprehensive general liability (CGL) insurance policies containing pollution exclusion clauses for the manufacturer's expenses and defense costs in the cleanup of a state-approved toxic waste dump in Michigan. Predecessors of the beer manufacturer had employed a waste hauler to transport used bottle wash to the waste dump, which the U.S. Environmental Protection Agency later placed on the National Priorities List under the Comprehensive Environmental Response, Compensation, and Liability Act. After the court originally denied motions for summary judgment and granted defendant insurers' motion for reargument, the Michigan Supreme Court decided three cases interpreting pollution exclusion clauses in CGL policies. Applying those decisions, the court holds that the pollution exclusion clause in the insured's policies precludes coverage by the insurers. The record shows that the initial discharge of waste into the environment was the dumping of waste directly into earthen lagoons at the dump site, that the discharge was not sudden because waste was deposited repeatedly over an extended period of time, and that the discharge was not accidental because the waste was deliberately dumped into the earth. Thus, the "sudden and accidental" exception to the pollution exclusion clause does not apply, and plaintiff's costs are excluded from coverage.

Counsel for Plaintiff
Lynne M. Fischman
Andrews & Kurth
747 Third Ave., New York NY 10017
(212) 888-7800

Counsel for Defendant
Carl Pernicone
Wilson, Elser, Moskowitz, Edelman & Dicker
150 E. 42nd St., New York NY 10017
(212) 490-3000