Thursday, December 20, 2012

Olin Corp. v. Am. Home Assurance Co.

Dec 19: In the U.S. Court of Appeals, Second Circuit, Case No. 11-4055. Appealed from an order of the United States District Court for the Southern District of New York. The district court granted summary judgment to American Home Assurance Company (American Home) on the ground that the attachment point for its excess insurance policies could not be reached by the alleged environmental damage at Olin Corporation's (Olin) site at Morgan Hill, California. In brief, the Appeals Court ruled, "We hold that the plain language of Olin's policies with American Home requires American Home to indemnify Olin for that damage. Accordingly, the judgment of the district court is vacated and the case is remanded for further proceedings."
    In concluding the Appeals Court said, ". . .we conclude that the district court's basis for granting summary judgment was in error. Condition C obligates American Home to indemnify Olin not only for property damage occurring during the policy period, but also for property damage arising from covered occurrences that continues after the policy period. Three decades of perchlorate exposure and the damage it created are treated as a single, multi-year occurrence for the purposes of this policy. And because this single, multi-year occurrence took place in part during each of the two policy periods here, the district court was incorrect to conclude that neither policy would be reached because of the allocation method. On the record before the district court, $72.6 million in damage falls within the coverage of the 1966-69 policy, while $62.7 million falls within the coverage of the 1969-72 policy. These figures exceed the American Home policies' $30.3 million attachment points. On remand, American Home may demonstrate that these attachment points cannot be reached for other reasons. For example, this estimate of the years in which property damage occurred may be inaccurate. Or the evidence may permit the court to assign greater damage to the years before the inception of the two policies. We decide only that issues of material fact remain regarding American Home's liability."
    Access the complete opinion (click here). [#Remed, #CA2]
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