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Emerson Electric Co. v. Aetna Casualty and Surety Co.8/30/2004
tio, unless the parties intended the known loss to be covered. [Citations.]" (Emphasis in original.) Outboard Marine Corp., 154 Ill. 2d at 103-04, 607 N.E.2d at 1210.
In the context of coverage under a CGL policy for environmental contamination, the supreme court stated:
" he known loss doctrine may be invoked if the insurers demonstrate that [the insured] knew or had reason to know, at the time it purchased the CGL policy, that there was a substantial probability that loss or liability would ensue due to the * contamination for which it is seeking coverage." Outboard Marine Corp., 154 Ill. 2d at 107, 607 N.E.2d at 1212.
The supreme court further found that coverage is barred if the insured, prior to the commencement of the policy, received an administrative order from the EPA confirming environmental contamination due to the insured's operations-because such an order, as a matter of law, gives the insured knowledge of a substantial probability that claims would be made against it. Outboard Marine Corp., 154 Ill. 2d at 105-06, 607 N.E.2d at 1210-11.
For the reasons stated below, Republic is entitled to summary judgment under the "known loss" doctrine with respect to the Erie, Pennsylvania, site, but is not entitled to summary judgment with respect to the Dixiana, South Carolina, site. As previously noted, the trial court in the instant case, albeit as part of the "occurrence" determination, made a finding of fact that the property damage at the Erie, Pennsylvania, site was expected and intended in light of the facts that, prior to the policy's inception in November of 1983, the site was placed on the National Priorities List, Urick was named as a potentially responsible party, and Urick was sued by neighboring landowners. The trial court similarly found that the property damage at Dixiana, South Carolina, site was expected and intended because in 1978 a state court ordered that operations at the Dixiana site cease, by 1980 water contamination was confirmed, and in 1982 plaintiffs began defending themselves against the EPA for the pollution at the site. Plaintiffs, nevertheless, argue that summary judgment in favor of Republic would be inappropriate. While plaintiffs acknowledge that the facts involved are undisputed, they argue that reasonable minds could disagree as to the proper inferences to be drawn from these undisputed facts. Plaintiffs contend that the following inferences could reasonably be drawn from the undisputed facts concerning the Pennsylvania site: (1) prior to the inception of the 1983-84 policy on November 1, 1983, Urick had no reason to believe or anticipate that its wastes caused property damage at the Millcreek Landfill, and (2) prior to the inception of the 1983-84 policy, Urick had no reason to anticipate liability in connection to its shipment of wastes to the site. It is, therefore, plaintiffs' position that summary judgment at this juncture was inappropriate.
In support, plaintiffs point to the evidence that prior to July of 1983, Urick was unaware of the allegations that Sitter had commingled Urick's foundry sand and non-hazardous wastes with those of other companies and had disposed of the wastes improperly at the site. Plaintiffs admit that in July of 1983, Urick received a copy of a complaint in a contribution action which was brought against any persons who may have used Sitter for waste disposal. However, plaintiffs claim that it was not until Urick received the EPA's September 16, 1983, notice letter, that it became aware of the "EPA's belief that Urick's non-hazardous waste may have been disposed of that the site." Although plaintiffs further admit that, shortly thereafter, Urick discussed the matter with its counsel, they
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