54 A.3d 983
Vt.2011Background
- Bradford Oil Co. owns a Mobil station in St. Johnsbury with underground storage tanks that allegedly caused petroleum contamination.
- Contamination may have begun in the 1960s or 1970s; ANR listed the site on the Vermont Hazardous Waste Sites List in 1997 after tank removal.
- Bradford has been paying cleanup expenses with reimbursement from the Vermont Petroleum Cleanup Fund (VPCF).
- Bradford filed suit in 2006 seeking coverage under four Stonington Insurance Co. commercial general liability policies (July 18, 1994–December 1, 1997).
- Stonington admitted coverage but disputed how to allocate cleanup costs; trial court later fixed Stonington’s liability at 4/27 of costs.
- This appeal addresses whether time-on-the-risk allocation from Towns v. Northern Security Insurance Co. should govern, and whether other factors support a different allocation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Towns time-on-the-risk applies here | State contends Towns governs choosing time-on-the-risk allocation for continuous pollution. | Stonington argues for time-on-the-risk allocation based on standard occurrence-based language. | Towns controls; time-on-the-risk allocation adopted. |
| Whether joint and several liability should apply given policy language | State seeks joint and several liability for all costs within policy limits regardless of timing. | Stonington argues for time-on-the-risk pro-rata allocation under occurrence-based policies. | Allocation is governed by Towns' time-on-the-risk approach, not joint and several liability. |
| Whether insured's reasonable expectations justify departure from Towns | State contends insured expectations and policy norms warrant broader recovery. | Stonington argues reasonable expectations cannot override unambiguous policy terms. | Reasonable expectations do not override Towns; cannot distinguish this case. |
| Whether the State may recover full policy limits from Stonington irrespective of duration | State argues VPCF should recover to full policy limits regardless of timing. | Stonington asserts recovery is limited to its time-on-the-risk share. | Recovery limited to proportionate share under time-on-the-risk, not full policy limits. |
| Whether preservation forecloses arguments about pollution endorsements | State claims pollution endorsement affects whether policies are occurrence-based or claims-made. | Stonington contends endorsement issues were not properly preserved for appeal. | Issue not preserved; not reached on appeal. |
Key Cases Cited
- Towns v. Northern Security Insurance Co., 184 Vt. 322, 964 A.2d 1150 (2008) (continuous-trigger and time-on-the-risk allocation for environmental contamination)
- Montrose Chem. Corp. v. Admiral Ins. Co., 913 P.2d 878 (Cal. 1995) (continuous-trigger and occurrence-based policy interpretation)
- Boston Gas Co. v. Century Indem. Co., 910 N.E.2d 290 (Mass. 2009) (reasonable expectations regarding coverage limits under multiple policies)
- Owens-Illinois, Inc. v. United Insurance Co., 650 A.2d 974 (N.J. 1994) (orphan shares and insurer burden in allocation debates)
- Northern Security Insurance Co. v. Stanhope, 2010 VT 92 (2010) (burden-shifting in allocation and related Vermont precedent)