Last month, a California jury dismissed from an environmental contamination lawsuit several companies that were in the chain of manufacture, distribution, and ultimate use of perchloroethylene, finding that there was insufficient evidence that these companies were responsible for the environmental contamination. During the trial, the city of Modesto, California (the plaintiff) contended that these companies were liable for the city’s tainted groundwater and contaminated soil because these chemical manufacturers had wrongfully told several local drycleaners (who were also sued by the city) that they could dispose their perc waste into Modesto’s sewer system without concern that it would contaminate the local environment or water.

Although this verdict was a setback for the City of Modesto, California (who is the plaintiff in the lawsuit), who claimed that these companies had manufactured, sold and used a defective product, and that the defendants’ mishandling and misuse of the defective product had tainted the City’s water supply, the City had previously been awarded well over $21 million in compensatory and punitive damages in their claims against defendants Dow Chemical, PPG and Vulcan Chemical.

Not suprisingly, counsel for Modesto, as well as corporate giants Down Chemical and PPG have indicated that this lawsuit is far from over, as they all intend to appeal.

Post Footer automatically generated by Add Post Footer Plugin for wordpress.

In a big victory for a property owner who brought a breach of insurance contract lawsuit against their insurance company (State Farm), New York’s highest court held invalid State Farm’s disclaimer of coverage for the building owner’s claims that they sustained damage to the foundation when improper excavation work that was done on the immediately adjacent lot caused the earth beneath the plaintiff’s building to slide away.  In its disclaimer, State Farm argued that they were not required to pay on the claim because the insurance policy contained a provision that excluded coverage for any claim arising out of ”earth movement,” such as the shifting, contracting or sinking of earth, including from earthquake or erosion.

Conversely, the plaintiff apartment building asserted that this exclusion was at best vague, and in any event inapplicable to these facts, because unlike the examples in the policy describing “earth movement,” this case involved a contractor’s purposeful excavation of property. In affirming the trial and appellate courts’ finding for the plaintiff, the Court of Appeals adhered to the general rule that “all ambiguties in a contract must be construed against the drafter,” which in this context, is the insurer. Thus, since the specific type of claim in this case was not clearly and unambiguously excluded from coverage, State Farm was obligated to pay the claim. A copy of the Court’s opinion can be read by clicking on this link.

This story is yet another example (see our other blog) of why you should never accept an insurer’s disclaimer or denial of coverage at face value; it may pay to fight them.

Post Footer automatically generated by Add Post Footer Plugin for wordpress.