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Aetna Casualty & Surety Co. v. Pintlar Corp.

Aetna Casualty & Surety Co. v. Pintlar Corp.

United States Court of Appeals for the Ninth Circuit

May 10, 1990, Argued and Submitted, Seattle, Washington ; November 7, 1991, Filed

Nos. 89-35286, 89-35287

Opinion

 [*1509]  POOLE, Circuit Judge

Gulf Resources & Chemical Corporation and its subsidiary Pintlar Corporation (collectively, Gulf) appeal the district court's grant of summary judgment absolving Aetna Casualty and Surety Company and Aetna Life Casualty Company (collectively, Aetna) and Continental [**2]  Re-Insurance Corporation, Pacific Insurance Company, and Fidelity & Casualty Company of New York (collectively, Continental) from their duty to defend and indemnify Gulf in connection with Gulf's potential liability for environmental contamination. 709 F. Supp. 958.

Facts and Procedural History

In October 1984, the Environmental Protection Agency (EPA) notified Gulf that it was deemed to be a potentially responsible party (PRP) in connection with the contamination of a twenty-one square mile area of northern Idaho known as the Bunker Hill Site. Gulf, its predecessors, or subsidiaries had owned and operated mining and smelting facilities at the Bunker Hill Site from approximately 1885 until 1982.

EPA did not immediately institute a civil action against Gulf. Instead, it pursued administrative remedies. In 1986, EPA initiated "Fast Track" removal actions at the Bunker Hill Site. The cost of these actions totaled $ 962,500.

In August 1986, EPA and Gulf commenced negotiations concerning Gulf's participation in a remedial investigation and feasibility study ("RI/FS") of the Bunker Hill Site. At that stage, should the PRP refuse to perform the RI/FS, EPA could order it to do so or perform the study [**3]  itself and then sue for reimbursement.

In May 1987, in connection with an EPA administrative consent order, Gulf agreed to perform and pay for a RI/FS of the non-populated areas of the Site. ] Under 42 U.S.C. § 9606(a), the government is authorized to "secure such relief as may be  [*1510]  necessary to abate such danger or threat" and the district court to "grant such relief as the public interest and the equities of the case may require." 42 U.S.C. § 9606 (a).

After discovering it was a PRP and following negotiations with the EPA, Gulf turned to its insurers for defense and indemnity costs in connection with the EPA's claims. The insurers in turn brought declaratory judgment actions seeking relief from any liability. The district court granted the insurers' motions for summary judgment, finding that as a matter of law the comprehensive general liability (CGL) policies could not be interpreted to provide coverage for CERCLA-related claims.

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948 F.2d 1507 *; 1991 U.S. App. LEXIS 26351 **; 34 ERC (BNA) 1604; 91 Cal. Daily Op. Service 8895; 91 Daily Journal DAR 13791; 22 ELR 20134

Aetna Casualty and Surety Co., Inc., a Connecticut corporation, Plaintiff-Appellee, v. Pintlar Corporation, a Delaware corporation; Gulf Resources and Chemical Company, a Delaware corporation, Defendants-Appellants. Continental Re-Insurance Corp., a California corporation; Pacific Insurance Company, a California corporation; Fidelity & Casualty Co. of New York, a New York corporation, Plaintiffs-Appellees, v. Pintlar Corporation, a Delaware corporation; Gulf Resources and Chemical Company, a Delaware corporation, Defendants-Appellants

Subsequent History:  [**1]  Amended Opinion Reported at: 1991 U.S. App. LEXIS 30068.

Prior History: Submission Vacated June 5, 1990. Resubmitted October 31, 1991. Appeal from the United States District Court for the District of Idaho. D.C. No. CV-87-3043-HLR. D.C. No. CV-87-3082-HLR. Harold L. Ryan, District Judge, Presiding.

Disposition:  REVERSED AND REMANDED.

CORE TERMS

insured, damages, policies, property damage, response costs, duty to defend, policy period, natural resources, district court, coverage, contamination, triggered, plain meaning, occurrence, environmental, insurance policy, notice, legally obligated to pay, hazardous substance, provide coverage, summary judgment, ordinary person, ambiguous, occurring, cleanup, costs, filing of the complaint, administrative claim, cleanup costs, equitable

Environmental Law, CERCLA & Superfund, Enforcement, Abatement, Insurance Law, Remedies, Declaratory Judgments, General Overview, Civil Procedure, Federal Declaratory Judgments, Judgments, Relief From Judgments, Hazardous Wastes & Toxic Substances, Defenses, Financial Responsibility, Administrative Proceedings & Litigation, Jurisdiction, Toxic Torts, Commercial General Liability Insurance, Coverage, Environmental Claims, National Contingency Plan, Business & Corporate Compliance, Cleanup Standards, Potentially Responsible Parties, Transporters, Cost Recovery Actions, Strict Liability, Appeals, Appellate Jurisdiction, Final Judgment Rule, Standards of Review, De Novo Review, Summary Judgment Review, Standards of Review, Summary Judgment, Entitlement as Matter of Law, Contracts Law, Contract Conditions & Provisions, Contract Interpretation, Ambiguities & Mistakes, Claim, Contract & Practice Issues, Policy Interpretation, Plain Language, Ambiguous Terms, Unambiguous Terms, Reasonable Expectations, Reasonable Person, Technical Constructions & Meanings, Cleanup Costs, Real Property Law, Environmental Regulations, Liabilities & Risks, Contractual Relationships, Damages, Liability & Performance Standards, Good Faith & Fair Dealing, Duty to Defend, Business Insurance