ELR Citation: ELR 21253
No(s). 90-7940 (2d Cir. Jun 25, 1991)

The court holds that the pollution exclusion clauses of insurance policies bar coverage of the insureds for claims by New York under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and common law. The court first holds that it has jurisdiction, because the district court properly certified its judgment in favor of the insurance companies as final under Federal Rule of Civil Procedure 54(b). The district court's judgment completely and finally disposed of the insureds' third-party claims against the insurers. Further, the possibility that the insurers may be impleaded in a second CERCLA action against the same defendants does not render a 54(b) certification impermissible. The court next holds that the "sudden and accidental" discharge exception to the pollution exclusion clauses in the insureds' policies does not apply to the discharge of pollutants on which the state's claims are based. The state's complaint alleges that the discharge was intentional and deliberate. That certain of the insureds may not have known where the discharged waste would end up does not make the release any more accidental. The complaint does not allege a sudden release, because it alleges that the insureds illegally disposed of wastes at the site for close to 30 years. Finally, the court holds that an insurer whose policy did not contain a pollution exclusion clause waived its defense that the insureds furnished it with an untimely notice of the discharge. In its letters to the insureds, the insurer asserted several grounds for disclaiming coverage without asserting late notice.

Counsel for Appellants
Hiram D. Gordon
Janvey, Bergals & Gordon
757 Third Ave., 18th Fl., New York NY 10017
(212) 750-1177

Counsel for Appellee
James M. Sweet, Paul McDonald, Paul St. Antoine
Drinker Biddle & Reath
1100 Philadelphia Nat'l Bank Bldg., Broad and Chestnut Sts.,
Philadephia PA 19107
(215) 988-2700

Andrew Feldman, Barbara L. Schifeling
Damon & Morey
1000 Cathedral Pl., 298 Main St., Buffalo NY 14202
(716) 856-5500

Conboy^*, J. (before Newman and Altimari, JJ.):