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December 3, 1990


The opinion of the court was delivered by: Goettel, District Judge:


Chlordane is a member of a class of chlorinated hydrocarbon insecticides known generally as "cyclodienes" which were introduced into the marketplace for general use sometime in the late 1940s. Popular as a termiticide, the chemical would be injected, in a diluted form, into the subterrain surrounding residential and commercial structures, where after it dried, it would remain in the soil for years after. Chlordane is not biodegradable. Sometime between 1976 and 1986, chlordane was determined to be carcinogenic. Accordingly, it was listed as a hazardous substance by the United States Environmental Protection Agency in 1985 and by the New York State Department of Environmental Conservation ("NYSDEC") in 1986. Chlordane's use was restricted in 1988.

This case concerns a commercial site in Yonkers where sometime prior to 1987 chlordane contamination occurred. A clean-up of the site has been undertaken by the current owner pursuant to a consent degree entered into with NYSDEC. As is only too common, a tangle of litigation has emerged to determine responsibility for the contamination and to allocate the costs of the clean-up. However, regardless of the outcome, more often than not, the insurance industry is the ultimate bearer of the costs as a result of general comprehensive liability policies underwritten before it was known that easy solutions achieved with chemicals are time-bombs threatening public health. But rather than ponder such follies, we will turn our attention to the immediate problem.


Boyce Thompson Institute for Plant Research, Inc., a not-for-profit corporation, affiliated with Cornell University, engages in experimental plant and environmental research supported by New York State, federal agencies and private industry. During the period encompassing roughly 1924 to 1969, Boyce Thompson owned a 24 acre site in Yonkers, New York*fn1 which was used as a research and test farm. The site contained various fruit orchards, plantings of vegetables and a small number of elms which were used to evaluate numerous agricultural products including fungicides, insecticides and herbicides. Greenhouses were also on the site. Refuse from the operations was deposited in a landfill, located on the northern portion of the property.

In October 1969, Boyce Thompson sold the site to Gestetner Corporation which, in turn, sold the site to Wilmorite, Inc. in May 1986. When Wilmorite, a Rochester-based developer, sought to construct a mall on the site, it encountered community opposition. Wilmorite abandoned these plans and unsuccessfully tried to sell the property. Sometime during 1987, the developer learned that hazardous substances might be present on the site. Subsequent tests confirmed this suspicion. Chlordane was found in concentrations greater than one part per million in two sections of the site: the "ballfield" and the former "greenhouse."

After it contacted NYSDEC, Wilmorite entered into a consent decree in which it agreed to undertake a clean-up of the site. As of this date, the clean-up has consisted primarily of soil removal at a cost of over $1,000,000. Further testing is ongoing.

Boyce Thompson was notified by Wilmorite on April 12, 1988 of the hazardous substances on the site and requested to make contribution to the response costs. Boyce Thompson declined. In February 1989, Wilmorite filed suit against Boyce Thompson demanding that Boyce Thompson contribute to the clean-up as required by the Comprehensive Environmental Response, Compensation & Liability Act ("CERCLA"), 42 U.S.C. § 9601 et seq. See Wilmorite, Inc. v. Boyce Thompson Institute for Plant Research, Inc., 89 Civ. 1129 (GLG). The complaint alleges that Boyce Thompson used part of the site as a landfill into which large amounts of toxic substances, including chlordane, were deposited. Boyce Thompson filed a third party complaint against Gestetner Corporation which alleges that the contamination occurred during the latter's stewardship of the site.

This case arose when Boyce Thompson filed, on May 9, 1988, a Notice of Claim with Insurance Company of North America ("INA") through Harvey Dann & Co., which had served as its insurance broker since at least 1948. The Notice referred to policies OBP 4585, OBP 46480, OBP 66183 and OBP 106621 which were Office and Building policies purchased to provide property and comprehensive general liability ("CGL") insurance for Boyce Thompson. Boyce Thompson demanded coverage from INA for the claims asserted against it by Wilmorite; INA disclaimed coverage. In January 1990, Boyce Thompson filed a suit against INA. In its complaint, Boyce Thompson alleged that INA was obligated under the terms of the policies purchased during the years 1948 to 1975, to defend and indemnify Boyce Thompson against the claims made by Wilmorite.

Presented here are cross-motions by Boyce Thompson and INA for summary judgment. Boyce Thompson seeks a declaration that INA is contractually obligated to defend it in the Wilmorite suit and that INA has breached its duty to defend. INA opposes this motion on several grounds and wants a declaration that under the terms of three separate insurance policies sold by INA to Boyce Thompson covering the years 1966 to 1975, it has no duty to defend nor indemnify Boyce Thompson. It is obvious that the cross-motions concerning the duty to defend are mutually exclusive because if Boyce Thompson's motion is granted, then necessarily INA's motion must be denied, at least in part. Therefore, Boyce Thompson's motion will be considered first.


A.  Summary Judgment

Summary judgment is appropriate only when no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). The moving party carries the burden of demonstrating the absence of a material, factual dispute. Fed.R.Civ.P. 56(c). But if the non-moving party sets forth specific facts showing a genuine need for trial and these facts carry more weight than just some metaphysical doubts, then summary judgment is appropriately denied. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 1355, 89 L.Ed.2d 538 (1986). Where ambiguities exist, the court must necessarily resolve these and draw all inferences in favor of the non-moving ...

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