The opinion of the court was delivered by: GRIESA
THE COURT: These are my findings and conclusions with respect to one of the issues left open in my July 3, 1997 opinion,* that is, whether Olin must be deemed to be a self-insurer during the years 1971 to 1985.
I am going to start by repeating something I just said in my discussion with Mr. Fournier, but let me go back to the jury verdict before I do that.
We must start with the framework we used at the trial, and the jury verdict at the end of that trial. The issue before the jury was whether there was accidental injury to property, or to put it in slightly different language, arising from the differently worded policy, whether there was property damage which was neither expected nor intended. Just as a shorthand, I am going to speak now of accidental injury because the real meaning of the coverage was not changed despite changes in language, at least the meaning for present purposes was not changed.
The jury found accidental injury to soil only for the years 1956 and 1957, and for purposes of my discussion here, I am going to ignore that injury to soil. I am going to deal with the finding of the injury about groundwater because I think it will illustrate the issues which I believe are of a general nature. Thus, although I am going to discuss what the jury found with respect to the site involved in the recent trial, I am going to refer to these matters as illustrations of what I believe are general considerations.
The jury found that there was accidental injury to groundwater commencing in 1958 and going through 1971. It was conceded that, commencing in 1971, a pollution exclusion appeared applicable to certain policies, and as a result of the jury's findings it is now established that the pollution exclusion was effective in all policies beginning in 1971.
The jury further found that there was injury to property which was a cause of cleanup cost to Olin for the years 1972 through 1985. What this means is that, according to the jury's finding in this case, there was injury to property covered by the insurance for the years 1958 through 1985. The jury further found that there was injury to property although it was not covered by the insurance, and that injury to property extended during the remaining years through 1985.
Due to the nature of gradual pollution, and under the framework which we have used in this case, this was not a situation where there was one injury with consequential damages. This was a situation where there were continual instances of injuries, each of which would be sufficient to be a separate trigger for liability under a policy if the policy were in effect during the particular year.
We start with the proposition that the insurance company is normally liable only for injury occurring during the time covered by the insurance under a general comprehensive liability policy. If the injury or the occurrence does in fact happen during the period of the policy, then there is coverage. If it occurs or happens after the conclusion of an insurer's policy period, it is not the responsibility of that insurance company. This case involves annual policies, and thus, if the occurrence or injury did not happen during the year of coverage, it is not covered by that policy.
If we apply that basic contractual consideration to the present case, we would find that the insurance company was liable for injuries and occurrences happening from 1958 through 1970 because there was coverage and there was no pollution exclusion. If we apply the contracts according to their terms, we could not find coverage for injuries or occurrences happening beginning in 1971 because the pollution exclusions came into effect. So for the period from 1971 through 1985, Olin was simply not covered for gradual pollution under general comprehensive liability policies.
Commencing in 1985, there were orders by governmental agencies for clean-up which imposed costs on Olin. The cost of the groundwater clean-up was about $ 400,000. According to the jury's findings, this was the result of gradual pollution -- a series of "injuries" -- occurring over the years 1958-1985.
We know that the nature of gradual pollution does not permit us to literally learn what particular injury occurs in a particular year leading to what particular monetary amount of damages. So proration is necessary. This means dividing the total damages -- here $ 400,000 -- by the appropriate number of years, and assigning to each year its share.
If we apply the proration concept as closely as possible to the terms of the insurance contracts, we would prorate the loss in the situation I am talking about over a period of years from 1958 through 1985, and we would assign a portion of that to the insurance company for the years 1958-1970, and we would assign a portion to ...