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Aetna Casualty & Surety Co.3/8/2002
I. AFFIRMING ON THE DIRECT APPEAL AND ON CROSS-APPEAL NOS. 2000-CA-000213-MR AND 2000-CA-000215-MR AND II. AFFIRMING IN PART, REVERSING IN PART, AND REMANDING AS TO CROSS-APPEAL NO. 2000-CA-000214-MR
The appellant, an unincorporated association of insurance companies, collectively known as American Nuclear Insurers (ANI), appeals from the final judgment of the Jefferson Circuit Court which determined it to be liable to its insureds under policies insuring against nuclear hazard liability. ANI challenges the propriety of the declaratory relief and the trial court's determination that it must reimburse all of the appellees for costs incurred in defending themselves in administrative proceedings brought by the United States Environmental Protection Agency (EPA) pursuant to the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA), 42 U.S.C. 9601, et seq. ANI also alleges that the trial court erred in ruling that it must indemnify some of the appellees for their share of the costs of the environmental cleanup at Maxey Flats Low-Level Radioactive Waste Disposal Facility (Maxey Flats) -- costs which also were incurred as a result of the CERCLA proceedings.
The Commonwealth has cross-appealed. It attacks that portion of the judgment (entered pursuant to the jury's verdict) absolving ANI of any duty to indemnify it for costs incurred in connection with the remediation of Maxey Flats. The remaining cross-appellants challenge certain rulings pertaining to the amount of damages. We affirm in part and reverse in part.
The facts which we shall set forth are not in dispute. In preparing this introduction, we have relied extensively on the list of sixty-eight stipulations of facts compiled by the parties.
Based on enabling legislation and by agreement with the Nuclear Regulatory Commission, Kentucky in 1962 became the first state to assume authority over the licensing and regulation of certain nuclear materials. Maxey Flats was a 252-acre facility operated by Nuclear Engineering Company, Inc., a predecessor of U.S. Ecology. Located on land owned by the Commonwealth in Fleming County, Maxey Flats began accepting radioactive wastes for burial in 1963. During the next fourteen years, a quantity comprising approximately 4.75 million cubic feet of low-level radioactive waste, both solid and liquid, was buried in trenches at Maxey Flats.
Tragically, rain water penetrated the large, unlined trenches, mixed with the radioactive waste, and leached out of the trenches and beyond the facility. In 1977, the Commonwealth became alarmed at the level of radioactive contaminants migrating from the site. It was also concerned about the ability of U.S. Ecology to achieve and maintain compliance with the conditions of its license. Accordingly, the Commonwealth issued an order suspending the facility's license to accept additional waste. No nuclear waste was received at the facility after 1977. In 1978, the Commonwealth began to negotiate with U.S. Ecology for the purchase of its leasehold rights and equipment. By July 1979, the Kentucky Natural Resources and Environmental Protection Cabinet assumed responsibility for the care and maintenance of Maxey Flats.
ANI issued two types of liability policies to the appellees: (1) a Facility Form, in force at all times relevant to this appeal, was issued to protect the owners, operators, and any "person or organization" legally responsible for damages arising out of the nuclear energy hazard at Maxey Flats, including the named insureds - the Commonwealth of Kentucky and U.S. Ecology; and (2) a Supplier's and Transporter's (S&T; policy covered entities in the business of hauling nuclear wa
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