AES CORP. v. Steadfast Ins. Co.
282 Va. 252
Va.
2011

Background

  • AES paid premiums for Steadfast's CGL policies (1996-2000, 2003-2008).
  • Kivalina filed a US district court complaint alleging AES's emissions caused global warming and coastal erosion/damages to the village.
  • AES sought defense/coverage; Steadfast agreed to defend under reservation of rights and filed for declaratory relief.
  • The circuit court granted Steadfast summary judgment, concluding the complaint did not allege an "occurrence" under the policies.
  • The Virginia Supreme Court applied the eight corners rule to determine whether the complaint, read with the policy, triggered Steadfast's duty to defend, focusing on whether the alleged injury was an accidental occurrence.
  • The court held that the complaints’ allegations of intentional emissions and their foreseeable global warming consequences do not constitute an "occurrence" under the CGL policies.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Whether the complaint alleges an "occurrence" covered by the CGL policies. Kivalina alleges intentional emissions with foreseeable damage; could still be an occurrence under negligent theory. Emissions were intentional; the resulting harm is the natural and probable consequence, not an accident. No occurrence; no defense obligation.

Key Cases Cited

  • Brenner v. Lawyers Title Ins. Corp., 240 Va. 185 (1990) (eight corners rule; insurer defense duty depends on pleadings and policy terms)
  • Reisen v. Aetna Life & Cas. Co., 225 Va. 327 (1983) (duty to defend varies with coverage and allegations)
  • Travellers Indem. Co. v. Obenshain, 219 Va. 44 (1978) (insurer duty to defend broader than indemnity; duty exists if allegations could fall within policy)
  • Norman v. Ins. Co. of N. Am., 218 Va. 718 (1978) (principle guiding eight corners analysis)
  • London Guar. & Accident Co. v. C.B. White & Bros., Inc., 188 Va. 195 (1938) (early articulation of coverage-analysis framework)
  • Town Crier, Inc. v. Hume, 721 F. Supp. 99 (E.D. Va. 1989) (instruction on insurer’s duty to defend under pleadings and policy terms)
  • American & Foreign Ins. Co. v. Church Schools in the Diocese of Va., 645 F. Supp. 628 (E.D. Va. 1986) (application of eight corners rule in declaratory actions)
  • Copp v. Nationwide Mut. Ins. Co., 279 Va. 675 (2010) (reasserts eight corners approach and coverage scope)
  • Utica Mut. Ins. Co. v. Travelers Indem. Co., 223 Va. 145 (1982) (definition of occurrence/accident; causation standards)
  • Parker v. Hartford Fire Ins. Co., 222 Va. 33 (1981) (distinguishes between intentional acts and accidental injuries for defense/coverage)
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