R.L. Vallee, Inc. v. Am. Int'l Specialty Lines Ins. Co.

R.L. Vallee, Inc. v. Am. Int'l Specialty Lines Ins. Co.

Opinion

 [*431] MAGISTRATE JUDGE'S REPORT & RECOMMENDATION

(Document 7)

Plaintiff R.L. Vallee, Inc. ("Vallee"), for itself and as assignee of MacIntyre Fuels, Inc. ("MFI"), filed this diversity action against American International Specialty Lines Insurance Company ("AISLIC"). Vallee alleges that AISLIC breached an insurance policy with MFI by denying coverage and failing to offer a defense to MFI in a state court action alleging pollution damage. The case is currently before this Court on AISLIC's motion to dismiss for failure to state a claim under Fed. R. Civ. P. 12(b)(6).

For the following reasons, I recommend [**2]  that AISLIC's motion be GRANTED in part and DENIED in part.

 [*432] BACKGROUND

For the purposes of this motion, the following facts are taken as true.

MFI is a Vermont corporation whose majority stockholders are Roch and Joy MacIntyre ("MacIntyres"). (Doc. 1-3, P 6). MFI leased and operated a gasoline station in New Haven, Vermont on property owned by the MacIntyres. (Id. at P 9). In 1992, MFI removed four underground gasoline storage tanks ("UST") and replaced them with above ground storage tanks ("AST"). (Doc. 1, PP 13, 15). MFI also installed new underground piping running from the ASTs to the pump islands. (Id. at P 15). Griffin International, Inc. ("Griffin"), an environmental consultant retained by MFI, reported that there had been a petroleum leak from the USTs that required removing 110 cubic yards of contaminated soil. (Id. at P 14). Even after the removal, there was residual contamination at the site. (Id. at P 17). From 1992 through 1995, MFI and Griffin continued to work to remedy the UST contamination. (Id. at P 18).

On June 30, 1995, MFI and the MacIntyres sold the station with all improvements to Vallee. (Id. at P 19). Even after the sale, MFI [**3]  was responsible for monitoring, conducting investigations and removing residual UST contamination to the satisfaction of the Vermont Department of Environmental Conservation, Waste Management Division, Site Management Section ("SMS"). (Id. at P 20).

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