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Bradford Oil Co. v. Stonington Ins. Co.

Supreme Court of Vermont

September 9, 2011, Filed

No. 10-361

Opinion

 [*P1]  [***985]  [**332]    Dooley, J. This case considers who should bear responsibility for the cost of cleaning up petroleum contamination caused  [**333]  by releases from a gas station's underground storage tanks. The controversy in this appeal is between the State of Vermont, which runs the Vermont Petroleum Cleanup Fund (VPCF) and Stonington Insurance Co. (Stonington), which insured Bradford Oil, the owner of the underground storage tanks, for approximately a three-and-a-half-year period. The State appeals from the trial court's judgment limiting Stonington's liability to a 4/27 share of past and future cleanup costs and awarding the State $45,172.05. On appeal, the State argues: (1) this Court's application of time-on-the-risk allocation in Towns v. Northern Security Insurance Co., 2008 VT 98, 184 Vt. 322, 964 A.2d 1150,  [****2] does not preclude joint and several liability under all standard occurrence-based policy language; (2) the circumstances here, including the reasonable expectations of the insured and the equity and policy considerations, support imposing joint and several liability on Stonington for all of the State's VPCF expenditures; and (3) even if time-on-the-risk allocation would otherwise be appropriate, Stonington is not entitled to such allocation because it has failed to show sufficient facts to apply this allocation method in the present case. We conclude that Towns does control here, and we are unconvinced by the State's reasonable expectations, equity, and policy arguments to distinguish this recent decision. Accordingly, we affirm.

 [*P2]  Plaintiff Bradford Oil Company, Inc. (Bradford) owns a Mobil station in St. Johnsbury that is the site of the petroleum contamination at issue. According to the parties' experts, the contamination may have begun as early as the 1960s or as late as the end of the 1970s. The Agency of Natural Resources (ANR) placed the site on the Vermont Hazardous Waste Sites List when, in April 1997, petroleum contamination was discovered following the removal of three underground  [****3] storage tanks. In recent years, at the State's direction, Bradford has been paying to investigate and clean up the contamination, and the VPCF has reimbursed most of Bradford's expenses. Bradford initiated this case in 2006 to establish coverage for its cleanup liability under four commercial general liability policies from Stonington. The State cross-claimed seeking reimbursement to the VPCF from Stonington under the same policies. The coverage periods for the policies at issue began on July 18, 1994, and continued through December 1, 1997.

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2011 VT 108 *; 190 Vt. 330 **; 54 A.3d 983 ***; 2011 Vt. LEXIS 102 ****

Bradford Oil Company, Inc. v. Stonington Insurance Company and State of Vermont Agency of Natural Resources

Prior History:  [****1] On Appeal from Superior Court, Washington Unit, Civil Division. Geoffrey W. Crawford, J.

Disposition: Affirmed.

CORE TERMS

insured, coverage, contamination, policies, trial court, insurance policy, policy period, damages, joint and several liability, occurrence-based, time-on-the-risk, pollution, triggered, allocated, occurring, quotation, reasonable expectation, self-insure, occurrence, argues, cases, insurance coverage, summary judgment, cleanup costs, effective, carrier, method of allocation, commercial general, liability policy, burden of proof

Insurance Law, Types of Insurance, Property Insurance, Multiple Insurers, Civil Procedure, Summary Judgment, Entitlement as Matter of Law, General Overview, Appeals, Summary Judgment Review, Standards of Review, Standards of Review, De Novo Review, Contracts Law, Contract Interpretation, Claim, Contract & Practice Issues, Claims Made Policies, Occurrence Policies, Policy Interpretation, Reasonable Expectations, Ambiguous Terms, Unambiguous Terms, Allocation, Environmental Law, Hazardous Wastes & Toxic Substances, Cleanup, Alternative Risk Transfers, Self Insurance, Evidence, Burdens of Proof, Reviewability of Lower Court Decisions, Preservation for Review