Friday, September 10, 2010

Scottsdale Insurance Co. v. Universal Crop Protection

Sep 8: In the U.S. Court of Appeals, Eighth Circuit, Case No. 09-1774, appealed from the District of Minnesota. Scottsdale Insurance Company (Scottsdale) issued a general commercial liability insurance policy for the benefit of Universal Crop Protection Alliance, LLC (UCPA). The policy contained a pollution exclusion. In 2007, scores of Arkansas farmers sued UCPA, alleging one of UCPA's herbicides destroyed their cotton crops. Scottsdale then brought the instant declaratory judgment action against UCPA, seeking a ruling that the pollution exclusion relieved Scottsdale of any obligation to defend or indemnify UCPA. Scottsdale moved for summary judgment, which the district court granted. UCPA appealed, arguing the district court lacked jurisdiction and construed the pollution exclusion too broadly. The Appeals Court affirmed the district court decision.
    The Appeals Court said, "The Policy's pollution exclusion is broad and unambiguously relieves Scottsdale of any obligation to defend or indemnify UCPA from the cotton farmers' claims -- under either the off target drift or relofting theories of migration. . . Neither theory 'arguably' falls outside the scope of the exclusion. . . The Policy plainly excludes coverage for 'property damage which would not have occurred . . . but for the . . . migration . . . of pollutants, defining pollutants in relevant part as including any solid, liquid, gaseous or thermal . . . contaminant, including . . . . chemicals. Again, the cotton farmers' relofting theory is concerned only with the migration of a chemical, i.e., 2,4-D. This is not a case in which the plaintiffs in the underlying litigation have made vague allegations that might permit a construction arguably falling outside of the governing pollution exclusion." [internal quotations omitted].
    Access the complete opinion (click here).

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