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Key Tronic Corp. v. Aetna Fire Underwriters Insurance Co.9/9/1994
BRACHTENBACH, J. --The trial court granted summary judgment in favor of six insurers, holding that as a matter of law pollution exclusions in their insurance policies preclude coverage for damage due to groundwater contamination resulting from leachates from toxic wastes disposed of at a Spokane County sanitary landfill by Key Tronic Corporation.
We reverse the trial court, and remand in light of our analysis herein and in Queen City Farms, Inc. v. Central Nat'l Ins. Co. of Omaha, 120 Wash. 2d 1025, 847 P.2d 481 (1993). Plaintiff Key Tronic Corporation, Inc. (Key Tronic), is a Washington corporation which manufacturers computer keyboards in Spokane. As part of the manufacturing process, Key Tronic used a number of chemicals, including 1,1,1 Trichloromethane (1,1,1 TCA) and methylene chloride. These chemicals would become saturated with residue materials in the process, and become unusable. From about 1973 to 1975 Key Tronic hauled these wastes in 55-gallon drums to the Mica landfill in Spokane.
In 1975, Spokane County directed Key Tronic to deliver the liquid waste to a licensed sanitary landfill at Colbert rather than to the Mica site. The Colbert site was established in 1968. The Spokane County Health Department issued the operating permit for the Colbert site, while Spokane County owned and operated the landfill. Key Tronic hauled the wastes in barrels to the Colbert landfill and dumped the contents into the landfill. Key Tronic was instructed to open the barrels and drain them into the landfill.
During the period from 1975 to 1980 Key Tronic averaged one trip every 6 weeks to the landfill, annually disposing of thousands of gallons of liquid waste containing 1,1,1 TCA and methylene chloride. 1,1,1 TCA is an extremely hazardous waste.
In the fall of 1980, the Washington State Department of Ecology tested wells around the landfill and found that 1,1,1 TCA was present in higher than acceptable quantities. Numerous third party suits were brought against Key Tronic for personal injury and property damage resulting from groundwater contamination due to leaching of the waste chemicals from the landfill. One group of plaintiffs obtained a jury verdict which was upheld in Wilson v. Key Tronic Corp., 40 Wash. App. 802, 701 P.2d 518 (1985).
In August 1983, Colbert was designated as a national priority list site under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA), 42 U.S.C. ยงยง 9601 et seq. (1980). In 1986, Key Tronic was notified it was a potentially responsible party under CERCLA, and in 1988 Key Tronic entered into a consent decree with the Department of Ecology and the United States Environmental Protection Agency under which it was obliged to pay $4.2 million to clean up the groundwater in and around Colbert.
Key Tronic was insured by several companies during the relevant period. On November 17, 1987, Key Tronic brought a declaratory judgment action against 11 of its primary and excess liability insurers, requesting clarification of the insurers' obligations to indemnify Key Tronic for damages and clean-up costs due to the groundwater contamination resulting from disposal of the wastes at the Colbert landfill. Six of the insurers remain in the action.
The six insurers moved for summary judgment, arguing that the policies issued to Key Tronic did not provide coverage for liability resulting from Key Tronic's intentional discharge of chemical wastes into the Colbert landfill. Although there are some variations in language in the policies, the trial court held, and there is no dispute about that holdi
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