Harry J. Frizzell, cited the pollution exclusion clause in the General Liability policy as the reason for the denial of coverage. Item 15, P 14, Ex. F. The letter failed to identify any clause in the Umbrella policy which would exclude coverage of the Miller action.
Upon Michigan Mutual's refusal to defend Freedom on the grounds of a noncovered event, Freedom hired the law firm of Devorsetz, Stinziano & Smith to represent it in the underlying action. Item 12, Alderman Aff., P 8. Freedom obtained a stipulation of discontinuance from the Millers on April 3, 1991. Item 12, Alderman Aff., P 10. In return, Freedom purchased the Millers' property for $ 52,000 and made a cash payment of $ 33,000 for all past, present and future expenses and damages allegedly suffered by the Millers and their children. Item 12, Statement of Material Facts, P 9.
Freedom commenced this action on April 2, 1991, alleging that defendants breached their duties under the insurance contract; that defendants negligently, intentionally, and maliciously refused to defend the plaintiff; and that they engaged in unlawful and deceptive acts under N.Y. Gen. Bus. Law § 349(a). Item 1, Compl.
Defendants readily admit that Freedom held the General Liability and Umbrella insurance policies through Michigan Mutual continuously from December 30, 1988, to December 30, 1990. Defendants also admit that Michigan Mutual denied coverage under the General Liability policy. Defendants raise, as a separate defense, that since Amerisure Insurance Co., Amerisure Inc., and Amerisure Re (Bermuda) Ltd. were not named on any insurance contract held by Freedom, Freedom is precluded from alleging a cause of action against any defendant but Michigan Mutual.
At the outset, it is important to note that Freedom purchased the two liability insurance policies at issue from defendant Michigan Mutual, the parent company of the various defendant Amerisure wholly owned subsidiaries. No contract of insurance was purchased from the various Amerisure entities listed as defendants in the complaint. Plaintiff was advised by the Superintendent of Insurance that Amerisure, Inc., and Amerisure Re (Bermuda) Ltd. are not authorized to do business in New York. Item 15 at 4 and Ex. I. Moreover, the Superintendent of Insurance never received an acknowledgement of service in regard to Amerisure Life Insurance Company. Id. at 5. Plaintiff does not challenge this, therefore, for failure to state a claim, the Amerisure entities are dismissed. Any other reference to defendant in this order will apply only to Michigan Mutual.
Plaintiff's motion seeks partial summary judgment under Fed. R. Civ. P. 56(a) on the ground that defendants owed plaintiff a duty to defend. Defendants cross-move for complete summary judgment on the grounds of not having any duty to defend nor indemnify plaintiff.
As to a motion for summary judgment, it will be granted if it is shown "that there is no genuine issue as to any material fact and that the moving party is entitled to summary judgment as a matter of law." Fed. R. Civ. P. 56(c) See generally, Celotex Corp. v. Catrett, 477 U.S. 317, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986). "The mere existence of some alleged factual dispute will not defeat an otherwise properly supported motion for summary judgment; the requirement 'is that there be no genuine issue of material fact.'" Olin v. Corp. v. Insurance Co. of North America, 762 F. Supp. 548, 557 (S.D.N.Y. 1991) quoting Anderson v. Liberty Lobby, 477 U.S. 242, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). The court must resolve all ambiguities and draw all reasonable inferences in favor of the non-moving party. Donahue v. Windsor Locks Bd. of Fire Comm'rs, 834 F.2d 54, 57 (2d Cir. 1987). Moreover, use of the summary judgment vehicle is particularly appropriate in the resolution of insurance contract coverage disputes. McGinniss v. Employers Reins. Corp., 648 F. Supp. 1263, 1266 (S.D.N.Y. 1986).
It is undisputed that Freedom purchased the General and Umbrella Liability insurance policies from defendant which were effective during the period covering December 30, 1980 through December 30, 1990. It is also undisputed that the allegations of the underlying complaint set out an "occurrence" during the period of policy coverage.
The nature of the two liability policies is such that the Umbrella Liability policy acts as an excess liability policy for claims exceeding the $ 1 million-per-occurrence, two-occurrence-cap limits. The motions before this court require the interpretation of several of the policies' clauses commonly included in commercial insurance policies: the pollution exclusion clause and those clauses which "trigger" coverage under the Umbrella Liability policy.
Each policy contains a clause known as a "pollution exclusion." The General Liability policy's blanket pollution exclusion is without exception and very broad:
"This insurance does not apply to:
f. (1) "Bodily injury" or "property damage" arising out of the actual, alleged or threatened discharge, dispersal, release or escape of pollutants:
(a) At or from premises you own, rent or occupy;