Insurance firm wins appeal on waste cleanup Sparks company's claim not binding, court rules

April 04, 1992|By Norris P. West | Norris P. West,Staff Writer

The Maryland Court of Special Appeals ruled yesterday that an insurance company is not obligated to pay damages for the cleanup of hazardous wastes at a Bausch & Lomb Inc. facility in Sparks.

The unanimous ruling by a three-judge panel of the state's second-highest court was a victory for the insurance industry in Maryland, which is involved in an ongoing battle over its obligations to cover comprehensive general liability policyholders.

The decision overturned a March 1991 judgment by the Baltimore County Circuit Court, which had ordered Utica Mutual Insurance Co. of New Hartford, N.Y., to pay $275,000 plus legal fees for the company's cleanup expenses at its former Diecraft site.

Bausch & Lomb, of New York, bought the site in 1965 to make parts for telescopes and microscopes.

It had comprehensive general liability insurance from Utica during a time when solvents and wastewaters were disposed of through a system that contained tanks, dry wells and a lagoon.

The manufacturer has sold the site but remains liable for damages that occurred while it operated there.

In 1982, an analysis of soil samples revealed high levels of cadmium.

The company informed the U.S. Environmental Protection Agency three months later.

In 1987, the Highlands Park I Limited Partnership, a neighboring landowner, alleged damage to ground water and threatened to sue.

Bausch & Lomb contacted Utica to alert it to a potential claim it might file to cover damages.

It asked the insurance company to honor its obligation to pay cleanup costs at the Diecraft site and on the neighboring land.

The Court of Special Appeals, in reversing the Circuit Court's decision, ruled that the damages were not covered under the comprehensive general liability policies.

The Court of Appeals is expected to rule soon on a larger question involving comprehensive general liability claims in a case involving Harford County and 13 other Maryland counties.

Those counties contend insurance companies are obligated to cover damages that occur during the term of their policies, including leaching landfills that are not discovered until after the policies expire.

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