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Emerson Electric Co. v. Aetna Casualty and Surety Co.8/30/2004
in 1976. That facility began operations in 1976 and manufactured electrical resistance heating units.
In 1981, Wiegand constructed a state-licensed concrete storage pad that was designed to hold virgin and waste materials, including oils, trichloroethylene (TCE) and trichloroethane (TCA). The storage pad, surrounded by a concrete curb, contained no passageways, such as pipes or drains, through which chemicals could have traveled to other parts of the site. A grated concrete containment trench was built around the storage pad. The trench was built specifically to contain discharges that otherwise might have been released from the storage pad.
TCA was stored on the storage pad in 55-gallon drums, and TCE was stored in a 5,000-gallon aboveground storage tank. TCE was delivered to the aboveground storage tank via a truck and distributed throughout the plant by an underground pipe.
Sometime in 1981 or 1982, Vernon's coordinator of environmental compliance observed stained soil around the storage pad. The soil was eventually removed and disposed of as hazardous waste. In the mid-1980s, the compliance coordinator also learned that some employees had, on an unspecified number of occasions, poured small amounts of spent TCA onto the ground near the storage pad, as was evidenced by dead grass.
At some point, a sump was constructed in the concrete storage pad to collect rainwater and other materials that would spill onto the storage pad. There was no drain or outlet from the sump. Liquids collected in the sump were periodically pumped out and discharged into a sanitary sewer. Visible staining of the soils showed that the sump may have overflowed in the past. In the event of an overflow, the water from the storage area would flow across an adjacent unpaved area for approximately 40 feet to a paved road. The water would then flow along the curb of the road to the point where the road ended. From the end of the road, the water would flow some 100 yards to a neighboring small creek. Republic alleged that overflows were routine occurrences over the years whenever heavy rains fell, resulting in contaminated water flowing down the road and toward the creek.
In 1988, Wiegand constructed a hazardous waste storage pad adjacent to the concrete storage pad. That hazardous waste storage pad, where spent TCE was stored, did not contain a sump or a trench.
In July of 1989, outside the coverage period of the policies at issue, Emerson's corporate representative conducted an internal environmental compliance audit of the facility. It appears that in his report he stated that he observed a leak in one of the pump seals to the 5,000-gallon TCE above-ground storage tank, a rusted drum containing TCE and other material dripping onto the concrete storage pad, and staining of the concrete storage pad and surrounding soil.
After the audit, in 1990, Emerson retained Radian Corporation (Radian) to conduct an investigation of Wiegand's operations. Radian determined that the staining around the concrete storage pad was due to leakage from the underground pipeline, leakage from an aboveground pipe connected to the pipeline, as well as storm water runoff from the pad. Radian also discovered on-site and off-site soil and groundwater contamination caused by total petroleum hydrocarbons and volatile organic compounds, including TCE and TCA. Although plaintiffs have admitted that the contamination at the Vernon facility was the result of slow leakage over a considerable period of time, plaintiffs claim that long-time Wiegand employees had also identified at least two abrupt, unexpected, and unintended releases of TCE during plant operations, which may have contributed to
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