The opinion of the court was delivered by: Wexler, District Judge.
In the above-referenced action, third-party plaintiff F & H
Manufacturing ("F & H") seeks recovery of defense costs against
third-party defendants American Motorists Insurance Company
("AMICO"), American Protection Insurance Company ("AMPICO"),
Michigan Mutual Insurance Company ("Michigan Mutual"),
Fireman's Fund Insurance Company ("Fireman's
Fund"), and Zurich Insurance Company ("Zurich") (collectively,
"the third-party defendants" or "insurers"). It is to be noted
that the primary action brought against F & H, which sought
damages pursuant to the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, ("CERCLA"), 42 U.S.C. § 9601
et seq., has been discontinued by the plaintiffs. During
the pendency of these actions, F & H withdrew its claims
against Zurich and Fireman's Fund. Currently before the Court
is a motion by F & H for summary judgment against all the
remaining third-party defendants; the third-party defendants
cross-move for summary judgment. For the reasons stated below,
summary judgment is granted to AMPICO; the summary judgment
motions by Michigan Mutual and AMICO are denied. Finally, F &
H's motion for summary judgment is likewise denied.
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
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
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.
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 ...