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Boeing Co. v. Aetna Casualty & Sur. Co.

Supreme Court of Washington

January 4, 1990

No. 55700-4

Opinion

 [**509]  [*873]   The United States District Court for the Western District of Washington has certified the following question of state law to this court:

Whether, under Washington law, the environmental response costs paid or to be paid by the insureds, as the result of action taken by the United States and the State of Washington under CERCLA, 42 U.S.C. § 9601 et seq., constitute "damages" within the meaning of the comprehensive general liability policies issued by the insurers.

Answer: Yes.

Facts

In 1983, the United States Environmental Protection Agency designated the Western Processing hazardous waste facility at Kent, Washington, as one of 400 hazardous waste sites requiring cleanup. On February 25, 1983, the EPA filed a complaint [***7]  against Western Processing and its owners in the United States District Court for the Western District of Washington. In May 1983, pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA), 42 U.S.C. § 9601 et seq., the EPA notified the appellants (hereinafter policyholders) that they were generators of hazardous waste at the Western Processing site and were responsible parties for the "response costs" at this site. On July 17, 1984, the EPA and the State of Washington, as an additional plaintiff, named the policyholders in a "Second Amended Complaint" as "'generator and transporter defendants' facing potential liability for all monies expended by the government at the Western Processing site." Certification order app., at 141. On August 28, 1984, the court entered a "Partial Consent Decree" between the EPA and the policyholders for the cleanup of the surface of the Western Processing site. On April 13, 1987, the  [*874]  court entered a "Consent Decree" between EPA and policyholders for the cleanup of hazardous waste contamination of the subsurface of the Western Processing site.

EPA, in its complaint, alleged that the policyholders [***8]  generated or transported hazardous substances found at the site. Further, that the migration of such wastes has contaminated the groundwater, aquifer (water-bearing geological zone), commercial and agricultural property adjoining the site, and nearby surface waters. Certification order app., at 324-73, "Third Amended Complaint" filed by United States Attorneys in United States v. Western Processing Co. It further alleged that the United States, in order to combat the effects of contaminated groundwater, aquifer and property adjoining the site, had incurred and was incurring "response costs" as defined by CERCLA for which policyholders were liable. ] CERCLA defines the costs of "response" to include costs of removal of hazardous substances from the environment and the costs of other remedial work. 42 U.S.C. § 9601(25). ] CERCLA provides that any person or business entity responsible for a release or threatened release of hazardous substances "shall be liable for . . . all costs of removal or remedial action incurred by the United States Government or a State . . .". 42 U.S.C. § 9607(a)(4)(A). Pursuant to the action by EPA, the policyholders have paid and will continue to pay environmental [***9]  response costs relating to the Western Processing hazardous waste facility.

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113 Wn.2d 869 *; 784 P.2d 507 **; 1990 Wash. LEXIS 1 ***; 87 A.L.R.4th 405; 20 ELR 20362; 30 ERC (BNA) 2001

Certification From the United States District Court for the Western District of Washington in The Boeing Company, Plaintiff, v. Aetna Casualty and Surety Company, et al, Defendants. Northwest Steel Rolling Mills, Inc., Plaintiff, v. Fireman's Fund Insurance Company, et al, Defendants. RSR Corporation, Plaintiff, v. Granite State Insurance Company, et al, Defendants. John Fluke Manufacturing Company, Inc., Plaintiff, v. Hartford Accident & Indemnity Company, et al, Defendants. Hartford Accident & Indemnity Company, Plaintiff, v. John Fluke Manufacturing Company, Inc., et al, Defendants. Davis Walker Corporation, Plaintiff, v. Aetna Casualty and Surety Company, Defendant

Subsequent History:  [***1]  Reconsideration Denied April 11, 1990.

CORE TERMS

damages, insurers, response costs, policyholders, costs, property damage, policies, pollution, restitutionary, dictionary, insurance policy, hazardous waste, coverage, contamination, equitable, remedies, ambiguous, environmental, responsible party, restitution, detriment, cases, site, cleanup costs, natural resources, provide coverage, legally obligated to pay, insurance contract, parties, hazardous substance

Environmental Law, Hazardous Wastes & Toxic Substances, CERCLA & Superfund, General Overview, Enforcement, Cost Recovery Actions, Strict Liability, Potentially Responsible Parties, Transporters, Financial Responsibility, Real Property Law, Environmental Regulations, Liabilities & Risks, Contractual Relationships, Insurance Law, Claim, Contract & Practice Issues, Policy Interpretation, Entire Contract, Ordinary & Usual Meanings, Plain Language, Cleanup, Technical Constructions & Meanings