Civil Action No. 01-11961-RWZUnited States District Court, D. Massachusetts.
October 28, 2002
MEMORANDUM OF DECISION AND ORDER
RYA W. ZOBEL, United States District Judge
On June 8, 2000, a foreman for plaintiff Rev-Lyn Contracting Company (“Rev-Lyn”) noticed fuel oil seeping from a seawall on the company’s East Boston property[1] into Belle Isle Inlet, on the northern edge of Boston Harbor. The oil was traced to an abandoned and apparently forgotten 1,000-gallon storage tank on the property. A broken vent on the tank allowed surface water to displace fuel oil, and over an unspecified period of time,[2] the oil gradually migrated underground 65 feet across the property and into the Inlet.
Within 24 hours of the June 8 sighting, Rev-Lyn notified its insurer, defendant American Home Assurance Company (“American Home”), of the spill. When American Home refused to pay the claim, plaintiffs brought the instant action in Massachusetts Superior Court, seeking $89,218.69 in remediation costs as well as treble damages and interest, costs, and attorney’s fees. Defendant, a New York corporation, timely removed the case to this Court on diversity grounds. Both sides have now filed cross-motions for summary judgment. The only question raised is whether plaintiffs’ claim falls within the pollution exclusion clause of their comprehensive marine liability policy.
The pollution exclusion clause in this case excludes coverage for “any claim arising out of the discharge, dispersal, release or escape of . . . oil . . . into or upon land, the atmosphere, or any watercourse or body of water.” An exception to the exclusion exists solely for “accidental” discharges that “can be identified as commencing at a specific time and date” during the term of the policy and that “became known to the Assured within 72 hours after its commencement.” The summary judgment motions are limited to what constituted the “discharge, dispersal, release or escape” of fuel oil for the purposes of the pollution exclusion clause. If the Belle Isle Inlet spill constituted the “discharge,” plaintiffs’ claim falls within the exception to the exclusion. But if the discharge commenced when the oil leaked out of the abandoned storage tank, plaintiffs cannot identify when the leak began, nor did they know of the discharge within 72 hours of its commencement.
Massachusetts courts have rejected arguments that coverage is triggered when damage is discovered rather than when pollution begins. See, e.g., Trustees of Tufts University v. Commercial Union Ins. Co., 415 Mass. 844, 848-52 (1993). More specifically, the First Circuit has held in cases involving chemical leakages from landfills that a “dispersal, release, or escape” occurred when chemicals were first poured into a landfill rather than when they escaped the landfill and into the surrounding environment — that is to say, when the chemicals were free and uncontained and not merely when they crossed a particular property boundary. St. Paul Fire Marine Ins. Co. v. Warwick Dyeing Corp., 26 F.3d 1195, 1204-05
(1st Cir. 1994); see also Millipore Corp. v. Travelers Indemnity Co., 115 F.3d 21, 32-33 n. 18 (1st Cir. 1997). To hold otherwise “would eviscerate the important distinction established between . . . damages and . . . discharges.” Warwick Dyeing Corp., 26 F.3d at 1204.
Just as Warwick Dyeing Corp. rejected attempts to define the landfill as a “containment vessel,” id. at 1205, this Court must reject plaintiffs’ conception of their East Boston property as a container from which the fuel oil spilled into Belle Isle Inlet. The “discharge, dispersal, release, or escape” began when the fuel oil was displaced from the abandoned storage tank. By the time the oil reached Belle Isle Inlet, the spill had been ongoing for more than 72 hours and thus did not fit within any exception to the pollution exclusion. On this basis, defendant properly denied coverage.
Accordingly, plaintiffs’ motion for summary judgment is denied, and defendant’s cross-motion for summary judgment is allowed. Judgment may be entered for defendant.