ELR Citation: ELR 20211
No(s). 84-5195 (6th Cir. Feb 4, 1985)

The court holds that the "vandalism and malicious mischief" clause in a municipal sewer district's insurance policy covers damage to a sewage treatment plant caused by a third party's illegal dumping of toxic chemicals into a sewer. Applying Kentucky law, the court holds that the clause does not require that the injury be an immediate or expected result of the vandalism; here, the injury occurred three miles from and several days after the dumping. Also, with regard to malice, the district does not have to prove the act was done with personal animosity against the district, so long as it proves the act was willful and unlawful. The court further holds that the insurer must reimburse the district for the costs it incurred in reaching a settlement with the generators and handlers of the chemicals. The insurer had a contractual obligation to cover the claim; the district's efforts reduced that obligation; and now equity demands that the insurer reimburse the district for the proportionate share of its litigation costs attributable to recovery for damage covered by the insurance policy.

[Related cases appear at 9 ELR 20700 and 11 ELR 20340.]

Counsel for Appellant
Henry A. Triplett
Bennett, Bowman, Triplett & Vittitow
3d Floor, 231 S. 5th St., Louisville KY 40202
(502) 583-5581

Counsel for Appellee
John S. Reed
Greenebaum, Doll & McDonald
3300 First Nat'l Tower, Louisville KY 40202
(502) 589-4200

Before: LIVELY, Chief Judge; WELLFORD, Circuit Judge; and ROSENN, Senior Circuit Judge.^*