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G. HEILEMAN BREWING CO. v. ROYAL GROUP

November 27, 1991

G. HEILEMAN BREWING COMPANY, PLAINTIFF,
v.
ROYAL GROUP, INC., ROYAL INSURANCE GROUP, ROYAL INSURANCE COMPANY OF AMERICA, ROYAL INDEMNITY COMPANY, DEFENDANTS.



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

OPINION AND ORDER

On June 21, 1991, this Court issued an Opinion and Order denying the motions of plaintiff and defendants for summary judgment. Following that decision, the Court granted defendants permission to file a motion to reargue. On August 26, 1991, as that motion was being submitted, a trio of decisions was handed down by the Supreme Court of Michigan. Defendants requested, and the Court granted, leave to file an amended motion to reargue. Before the Court is the motion of defendants, Royal Group, Inc., Royal Insurance Group, Royal Insurance Company of America, and Royal Indemnity Company (collectively "Royal") for reargument of the Court's June 21, 1991 decision in light of the August 26, 1991 decisions of the Supreme Court of Michigan.

The Court heard oral argument on this motion on November 18, 1991. Decision was reserved. For the reasons set forth below, defendants' motion is granted. In light of the decisions of the Michigan Supreme Court in The Upjohn Company, et al. v. New Hampshire Insurance Company, et al., 438 Mich. 197, 476 N.W.2d 392 (1991), Protective National Insurance Company v. The City of Woodhaven, et al., 438 Mich. 154, 476 N.W.2d 374 (1991), and Polkow v. Citizens Insurance Company of America, 438 Mich. 174, 476 N.W.2d 382 (1991), defendants' motion for summary judgment is granted.

Background

For purposes of this motion, familiarity with this Court's Opinion of June 21, 1991 is assumed. A brief restatement of the facts and issues of the case, however, would be helpful to understanding the instant motion.

Plaintiff brought suit seeking an order declaring that Royal, plaintiff's former insurance carrier, was required to provide coverage for plaintiff's expenses and defense costs incurred and to be incurred in the cleanup of a state-approved toxic waste dump in Otisville, Michigan. Predecessors of the plaintiff, a corporation engaged in brewing and distributing beer, had employed a waste hauler to transport used bottle wash to the site in the 1970's.

In September 1983, five years after it closed, the dump site was placed by the Environmental Protection Agency ("EPA") on the National Priorities List under the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"). In 1985 and 1986, the EPA notified companies that had used the dump and that could be held liable for cleanup costs, entities called Potentially Responsible Parties ("PRPs"), that the EPA would either clean up the Otisville site itself and seek reimbursement from the PRPs or permit the PRPs to conduct an EPA-supervised cleanup themselves. Heileman was identified as a PRP.

After its designation as a PRP, Heileman sought to have its share of the cleanup costs covered by its insurance carriers. Heileman and its predecessors had two types of insurance coverage: general liability coverage and excess or umbrella coverage. Plaintiff's comprehensive general liability ("CGL") coverage from Royal provided up to $250,000 in coverage for property damage or bodily injury. The policies contained a pollution exclusion clause, which provided that the CGL would not apply

  "(f) to bodily injury or property damage arising
  out of the discharge, dispersal, release or
  escape of smoke, vapors, soot, fumes, acids,
  alkalis, toxic chemicals, liquids or gasses,
  waste materials or other irritants, contaminants
  or pollutants into or upon land, the atmosphere
  or any water course or body of water; but this
  exclusion does not apply if such discharge,
  dispersal, release or escape is sudden and
  accidental."

(emphasis added).

Recent judicial definitions of "sudden and accidental" are the focus of this motion.

Plaintiff brought this action seeking a declaration that defendants were required to reimburse plaintiff for costs incurred in carrying out the EPA's mandate. Both plaintiff and defendant moved for summary judgment. After concluding that Michigan law applied to this dispute, the Court found that the case involved disputed issues of fact that precluded summary judgment. The Court denied both motions in their entirety on June 21, 1991. June 21, 1991 Order at 10, 1991 WL 120366.

Defendants now seek reargument of their summary judgment motion based on three recent decisions of the Supreme Court of Michigan, announced on August 26, 1991, which discuss the scope and applicability of pollution exclusion clauses identical to the one at issue in this action. Defendants contend that the three cases make it clear that, as a matter of law, they have no obligations to plaintiff arising out ...


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