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Bellaire Corp. v. Am. Empire Surplus Lines Ins. Co.

Court of Appeals of Ohio, Eighth Appellate District, Cuyahoga County

June 28, 2018, Released; June 28, 2018, Journalized

No. 106243

Opinion

 [**807]  JOURNAL ENTRY AND OPINION

EILEEN T. GALLAGHER, J.:

 [*P1]  Plaintiff-appellant, Bellaire Corporation, appeals an order granting summary judgment in favor of defendants-appellees, Federal Insurance Company ("Federal"), American Empire Surplus Lines Company ("American"), and First State Underwriters Agency of New England Corporation ("First State") (collectively "the Insurers"). Bellaire claims the following two errors:

1. The trial court erred by granting summary judgment in favor of the appellee insurers and against Bellaire Corporation.

2. The trial court erred by failing to consider all arguments presented in the summary judgment.

 [*P2]  We find no merit to the appeal and affirm the trial court's judgment.

I. Facts and Procedural History

 [*P3]  Bellaire is an Ohio corporation. Its corporate predecessor, The North American Coal Company ("NACCO"), operated a bituminous coal mine known as Conemaugh Mine No. 1 in west central Pennsylvania from 1968 to 1981. While the mine was in [***3]  operation, it regularly filled with groundwater that needed to be pumped out and discharged. However, before discharging the water into local waterways, the water had to be treated because, as is common with mines, the water becomes acidic as it mixes with oxygen and elements in the mine. This phenomenon is known in the mining industry as "acid mine drainage."

 [*P4]  Ralph Shank, Bellaire's chief mining engineer, explained during his deposition that regulations, such as the Clean Steam Laws, have been governing mining operations and the treatment of acid mine drainage since the mid-1960s. (Shank depo. at 19, 46-48, describing Clean Stream Laws.) In accordance with those regulations, Bellaire obtained a mining permit in 1968 known as Permit No. 367M045 "Authorizing the Operation of a Coal Mine," to operate the Conemaugh Mine No. 1 ("the Permit"). Under the terms of the Permit, Bellaire is responsible for acid mine drainage both while the mine is in operation and after its closure. (See the Permit marked  [**808]  as BEL567 attached to Federal's motion for summary judgment; Shank depo. 18, 56, 176-177; Kranz depo. 57-60.) Thus, Bellaire treated the acid mine drainage from the Conemaugh Mine No.1 at the [***4]  nearby Hices Run Mine Drainage Treatment Plant, which was built for that purpose.

 [*P5]  When Bellaire closed the mine in December 1981, Bellaire and the Pennsylvania Department of Environmental Resources ("PADER") formulated a plan to seal the mine to prevent the discharge of acid water from the mine that could pollute adjoining areas. An internal memorandum suggests that personnel within Bellaire anticipated seepage of acidic water after the mine's closure and believed the Hices Run treatment plant should remain open to deal with that contingency. (Shank depo. 87-90.) The internal memorandum, dated May 21, 1982, states: "Current plans are to leave the plant intact. Plant may be needed in the future if NACCO1 is required to treat mine water." (Shank depo. 87-90; Internal Memorandum dated May 21, 1982 titled "Conemaugh Mine No.1 Mine Closing Questionable Areas with Penelec."2) Despite the precautions set forth in the memorandum, Bellaire sealed the mine by filling its boreholes with cement and tore down the Hices Run treatment plant.

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2018-Ohio-2517 *; 115 N.E.3d 805 **; 2018 Ohio App. LEXIS 2706 ***; 2018 WL 3201735

BELLAIRE CORPORATION, PLAINTIFF-APPELLANT vs. AMERICAN EMPIRE SURPLUS LINES INSURANCE COMPANY, ET AL., DEFENDANTS-APPELLEES

Subsequent History: Discretionary appeal not allowed by Bellaire Corp. v. Am. Empire Surplus Lines Ins. Co., 153 Ohio St. 3d 1505, 2018-Ohio-4285, 2018 Ohio LEXIS 2513, 109 N.E.3d 1261 (Ohio, Oct. 24, 2018)

Prior History:  [***1] Civil Appeal from the Cuyahoga County Court of Common Pleas. Case No. CV-13-816172.

Disposition: AFFIRMED.

CORE TERMS

Insurers, occurrence, acid, policies, property damage, treatment plant, drainage, costs, summary judgment, trial court, damages, depo, pollution, coverage, environmental, conditions, flooding, lawsuit, argues, property damage claim, repeated exposure, business expense, power company, remediate

Civil Procedure, Appeals, Standards of Review, De Novo Review, Summary Judgment Review, Standards of Review, Summary Judgment, Entitlement as Matter of Law, Appropriateness, Genuine Disputes, Legal Entitlement, Materiality of Facts, Contracts Law, Contract Interpretation, Intent, Insurance Law, Policy Interpretation, Ambiguous Terms, Construction Against Insurers, Unambiguous Terms, Claim, Contract & Practice Issues, Plain Language, Ordinary & Usual Meanings, Business Insurance, Commercial General Liability Insurance, Damages, Occurrences