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Aerojet-General Corp. v. Industrial Underwriters Insurance Co.2/28/2002
only releases or threatened releases of hazardous substances from the Aerojet site, but also area-wide groundwater contamination.
Aerojet alleged the EPA actions are covered under Aerojet's standard-form liability insurance policies, which obligate the insurers to defend and indemnify Aerojet in connection with any actions alleging liability for damages because of property damage, bodily injury or personal injury . The insurers have denied coverage and refuse to defend or indemnify Aerojet in these actions.
Aerojet's first supplemental complaint alleged its insurance policies also provided coverage for "toxic tort" lawsuits that had been filed against Aerojet between July 1997 and July 1998, by various individuals who alleged, e.g., that Aerojet is liable for injuries caused by the release of hazardous substances, pollutants or contaminants at or from the Azusa site, which allegedly led to contamination of well water used by these individuals.
Aerojet's pleadings against the insurers alleged as separate causes of action: (1) declaratory relief with respect to the insurers' duty to defend; (2) declaratory relief with respect to the insurers' duty to indemnify Aerojet; (3) breach of contract; and (4) bad faith against two insurers who are not party to this appeal.
In June 1999, a defense motion for summary judgment or summary adjudication was filed by Transport Indemnity Company (Transport). Transport later settled out of the case and is not a party to this appeal, but the insurers who are parties to this appeal filed joinders in Transport's motion, with separate statements reflecting the exact language of their own insurance policies. Aerojet does not dispute the trial court's finding that the issues raised by Transport's motion are substantially identical with respect to all moving party insurers.
Tranport's notice of motion stated the motion was made on the ground that the pollution exclusion contained in the insurance policy precluded all coverage for the claims asserted against Aerojet as described in Aerojet's pleadings.
It is undisputed that the insurance policies at issue in this case contain pollution exclusions substantially providing as follows:
"It is agreed that this policy does not apply to personal injury or property damage liability arising out of: . . . [ ] . . . The discharge, dispersal, release, escape or seepage of smoke, vapors, soot, fumes, acids, alkalis, toxic chemicals, liquids or gases, waste material or other irritants, contaminants or pollutants into or upon land, the atmosphere or any watercourse or body of water, unless such discharge, dispersal, release or escape is sudden and accidental."
In their summary judgment motion, the insurers pointed to evidence of Aerojet's routine waste disposal activities and asserted the damage for which Aerojet sought coverage was caused by Aerojet's routine activities, not by any sudden and accidental event. The insurers also relied upon case law construing "sudden" to mean abrupt, and case law construing "accidental" to mean unexpected and unintended.
In support of summary judgment, the insurers' separate statement of undisputed facts identified Aerojet's alleged sudden and accidental events and asserted, among other things: "Aerojet contends that the `sudden and accidental' discharges it has identified did not damage or threaten third party property." The supporting evidence was Aerojet's answer to interrogatory number 179, as follows:
"INTERROGATORY NO. 179:
"Do YOU contend that any of the amounts for which YOU seek coverage resulted from or were caused by sudden and accidental discharges?
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