Insurer ordered to pay up in contamination case

By Kacie Whaley | May 10, 2017

HARRISBURG — The cost of contamination damages allegedly caused by the predecessor to chemical company Johnson Matthey Inc. will still be paid by the Pennsylvania Manufacturers’ Association Insurance Company now that the state Commonwealth Court has denied the latter the chance to escape responsibility. 

The decision was filed on April 21 and authored by Senior Judge James Gardner Collins.

On May 12, 2010, the Pennsylvania Department of Environmental Protection (DEP) sued Johnson Matthey (JMI) due to its predecessor company contaminating a site located in East Whiteland Township. The company was processing metal alloy tubes and related equipment from 1969 to 1974.

According to court documents, the company "used hazardous substances, including trichloroethylene (TCE)" at the site. DEP claimed that these substances were "disposed into the environment, including the Site’s soils and groundwater,” causing contamination of the surrounding groundwater and the aquifer under the site and under nearby properties. 

DEP found JMI and its predecessor company liable under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 and the Hazardous Sites Cleanup Act for the costs the department incurred for remediating the environmental damages.

The Pennsylvania Manufacturers’ Association Insurance Company agreed to defend JMI in 2010, but in 2015, the insurer declined to continue defending the company. The insurer claimed that the contamination of the site in question was not detected during the periods that its policy with JMI was in effect from April 1 1969, to April 1, 1971. The insurer claimed the first environmental testing that detected TCE occurred in 1988.

The suit against JMI alleges that the contamination occurred before and during the periods the company was insured under the Pennsylvania insurer. The insurer was unable to prove that the contamination did not occur during the policy periods or that it started before said periods.

The court found that due to issues with the policy's ambiguous language and because JMI had an occurrence policy, which "provides insurance coverage for liabilities arising while the policy is in effect," the insurer is still legally obligated to pay for JMI's damage under property damage coverage.

Want to get notified whenever we write about any of these organizations ?

Sign-up Next time we write about any of these organizations, we'll email you a link to the story. You may edit your settings or unsubscribe at any time.

Organizations in this Story

Pennsylvania Commonwealth Court Pennsylvania Department of Environmental Protection

More News

The Record Network