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SAVOY MEDICAL SUPPLY, v. F & H MFG.

October 29, 1991

SAVOY MEDICAL SUPPLY CO., INC. AND SAVOY REALTY CORP., PLAINTIFFS,
v.
F & H MANUFACTURING CORP., HENRY D. JACKSON AND CATHERINE S. JACKSON, DEFENDANTS/THIRD-PARTY PLAINTIFFS, V. VINCENT P. SAVIA AND MARY SAVIA, THIRD-PARTY DEFENDANTS, V. MICHIGAN MUTUAL INSURANCE COMPANY, FIREMAN'S FUND INSURANCE COMPANY, ZURICH INSURANCE COMPANY, AMERICAN MOTORISTS INSURANCE COMPANY, AMERICAN PROTECTION INSURANCE COMPANY, THIRD-PARTY DEFENDANTS.



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

MEMORANDUM AND ORDER

BACKGROUND

As noted above, plaintiffs Savoy Medical Supply Co. and Savoy Realty Corp. ("Savoy") brought the underlying CERCLA action against F & H and its owners, Harry and Catherine Jackson. During the period from approximately 1966 to August of 1983, F & H manufactured ground support equipment for the United States Department of Defense. Their operations included milling, dulling, stamping, welding, painting, packaging and shipping.

On August 18, 1983, F & H sold the subject property to Vincent Savia and his wife, Mary Savia. At that time, F & H discontinued insurance coverage for the site in controversy.*fn1 Three years later, the Savias reconveyed the property to Savoy Medical Supply Co., Inc. and Savoy Realty Corp., corporations apparently controlled by the Savias. In July of 1987 analysis of ground samples taken from the site by Suffolk County authorities revealed the presence of various contaminants. In January of 1988, subsequent to negotiations with Suffolk County, Savoy arranged for the cleanup of the site and the testing of the groundwater. Plaintiffs thereafter filed the instant action against F & H and the Jacksons to recover damages for contamination of the property under CERCLA, and for reimbursement of the costs incurred in the investigation and cleanup of the site. Savoy additionally sought a declaratory judgment concerning future costs.

In the amended complaint, plaintiffs alleged in pertinent part:

  8. Defendant [F & H] conducted heavy industrial
  operations at the site during said time period.
  9. The Jackson defendants were aware of, and
  permitted defendant [F & H] to conduct heavy
  industrial operations at the premises during said
  time period.
  10. Defendant [F & H] caused and allowed
  contamination of the environment to occur at the
  premises during said time period.
  11. The Jackson defendants were aware of, and
  permitted defendant [F & H] to cause and allow
  contamination of the environment to occur at the
  premises during the said time period.

Amended Complaint at paras. 8-11.

F & H subsequently sought defense and indemnification from the third-party defendants, its insurers. Based on their disclaimers of liability, F & H commenced a third-party action against the insurers, seeking defense in the Savoy suit and indemnification of all sums paid as damages. All third-party defendants subsequently brought separate motions for summary judgment, and thereafter, F & H moved for partial summary judgment against third-party defendants. Since the filing of these motions and cross-motions, as noted above, plaintiffs have discontinued their underlying claims against F & H. However, although liability claims against F & H no longer exist, F & H continues to seek coverage to the extent of its defense fees incurred. Thus, the Court must determine whether the remaining insurers owed a duty to defend F & H.

DISCUSSION

A motion for summary judgment may be granted only when it is shown that "there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986); Donahue v. Windsor Locks Bd. of Fire Comm'rs, 834 F.2d 54, 57 (2d Cir. 1987); Winant v. Carefree Pools, 709 F. Supp. 57, 59 (E.D.N.Y.), aff'd, 891 F.2d 278 (2d Cir. 1989). The burden rests upon the moving party to clearly establish the absence of a genuine issue as to any material fact. Donahue, 834 F.2d at 57. Additionally, the Court must resolve all ambiguities and draw all reasonable inferences in favor of the non-moving party. Id. Furthermore, interpretation of insurance policies, similar to other contracts, may often raise pure questions of law properly decided by the ...


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