Citations
- 999 F. Supp. 2d 552
Full opinion text
OPINION & ORDER
KATHERINE B. FORREST, District Judge.
This environmental insurance coverage action was commenced in April 2012 by Travelers Indemnity Co. and various affiliated companies (together, “Travelers”) against Northrop Grumman Corp. and Northrop Grumman Systems Corp. (together, “Northrop” or, during discussions of historical points, “Grumman”), and Century Indemnity Co. (“Century”), eventual successor in interest to Insurance Company of North America (“INA”), as nominal defendant. Together, Travelers and Century issued insurance policies to Northrop spanning a period from 1950 to 1985.
Pending before the Court are various motions for summary judgment by Travelers and Century. This Opinion relates to Travelers’ motion for summary judgment with respect to an area that it refers to as the Bethpage Facility (“BF”) (ECF No. 358). The Court deals with the other motions in separate Opinions.
In this motion, Travelers argues that the statutory pollution exclusions effective for its policies issued between 1972 and January 1, 1983, along with pollution exclusions included in policies it issued between 1983 and 1985, are applicable to precisely the type of coverage claims that Northrop asserts with respect to the Bethpage Facility-
In addition, Travelers argues that summary judgment is separately warranted based on both late notice and violation of the so-called “voluntary payments” provisions in each of the policies at issue.
For the reasons set forth below, Travelers’ motion as to the Bethpage Facility is GRANTED.
I. FACTS
The area known here as the Bethpage Facility encompasses a 600-acre parcel of land on which Grumman commenced manufacturing operations in the 1930s. (Northrop Grumman’s Response to Travelers’ “Statement of Undisputed Material Facts Pursuant to Local Rule 56.1 in Supp. of Travelers’ Mot. for Summ. J. Regarding Bethpage Facility” (“NGC 56.1”) ¶ 4.) For purposes of this motion, it does not include the 18-acre parcel that Grumman donated to the Town of Oyster Bay in 1962. The Bethpage Naval Weapons Industrial Reserve Plant (“NWIRP”) was located on the grounds of the Bethpage Facility but operated by Grumman.
Grumman manufactured and tested airplanes, weapons and satellites at the Beth-page Facility. In connection with its operations, it used and stored contaminants such as trichloroethylene (“TCE”), a liquid used as a degreaser for metal parts. (Id. ¶ 5.) TCE is “toxic by inhalation, by prolonged or repeated contact with the skin or mucous membrane, or when taken by mouth.” (Calland Decl. Ex. 39, at Feenstra 005746; see also Calland Decl. Ex. 60, at Feenstra 005828.)
There is a large plume of groundwater contamination below the Bethpage Facility, and now extending beyond its boundaries. (NGC 56.1 ¶ 2.) More than 2000 acres on Long Island are now impacted. (Id.) This lawsuit concerns whether insurance policies issued by Travelers and Century (or Century’s predecessor, INA), cover liabilities that Northrop has and may have relating to clean-up and remediation.
Grumman’s use and storage of volatile organic compounds (“VOCs”), including TCE, at the Bethpage Facility, occurred particularly at plants #1, #2, #3, #5, and # 12. (Id. ¶¶ 5, 8, 214, 215.) Grumman concedes that it began using TCE at the BF in the 1940s. (Id. ¶ 9.) Grumman used TCE primarily as a cleaning solvent for metal parts. (Id. ¶ 10.) In particular, plants #1, #2, and # 3 each contained vapor degreasers that used TCE. (Id. ¶ 12.)
At least eight TCE degreasers operated in plant #2 from the 1960s through the mid-1990s. (Id.) At least six TCE degreasers operated at plant # 3 at various times spanning the 1960s through the 1980s. (Id.) Plant # 5 had at least one TCE degreaser between the 1960s and had two in the 1970s. (Id. ¶ 14.) In addition, plant #2 also used degreasers outfitted with spray wands that used TCE. (Id. ¶ 13.) Spray wands were used to degrease large parts, such as wings of planes. (Id.) To perform his task with a spray wand, a Grumman operator would stand on a platform along the side of the degreaser. (Id.)
Grumman’s operations included painting airplanes. It had paint shops on the grounds of the Bethpage Facility for this purpose. (Id. ¶ 15.) TCE was used to clean the paint guns used in the paint booths. (Id.) To do this, the paint gun would be aimed at the paint curtain and discharged. (Id.) A “waterfall” in a paint shop was intended to keep sprayed paint from escaping. (Id. ¶ 16.) Water circulated through a closed system and cascaded down the sides of the paint shop to catch paint overspray; water also circulated through troughs on the floor of the paint shop and then back through the waterfalls. (Id. ¶ 17; see also Calland Decl. Ex. 3, at 146:0421.) The paint shop consisted of one room and three waterfalls. (NGC 56.1 ¶ 17.) Grumman’s practice was to clean each spray booth re-circulating tank weekly; the water residue would be pumped to the tank truck and taken to Grumman’s on-site waste treatment plant. (Calland Decl. Ex. 42, at Feenstra 000101; Calland Decl. Ex. 48, at Feenstra 000113.) Sludges collected in the bottom of the tank were pumped into big vats. (NGC 56.1 ¶ 18.)
Sludges from both the paint booths and the paint shop were treated in plant # 2; “remaining sludge” was cleaned from the floor of the paint booths using rags. (Id. ¶ 18.) Smaller parts were also cleaned at plant # 2 using rags and TCE. (Id. ¶ 20.)
John Cofman, a Northrop Grumman employee, testified that plant # 2 had a system to distill TCE, which was dirty with oil because it had been used in degreasers and for cleaning, so that the company could reuse the TCE. (Calland Decl. Ex. 4, at 372:20-373:08.) According to a schematic, Grumman used concrete foundations for TCE storage tanks. (Calland Decl. Ex. 63.)
On September 8, 1948, Fred J. Biele of Grumman received a letter “recommend[ing] that tests be made of [sludge] to determine whether same is in fact insoluble in water such as rain water and therefore will not pollute the ground water of the Island.” (Calland Decl. Ex. 43, at Dewling 000946.) On November 5, 1949, Biele sent a letter to Stanley T. Barker of NYSDOH notifying him that Grumman was “having tests made to determine the chromium strength of the discolored paint liquor,” and that samples had been taken for analysis. (Calland Decl. Ex. 48, at Feenstra 000113.) On November 21, 1949, Grumman received a permit to discharge sewage or wastes into New York state waters “in a manner which will not contaminate any ground or surface water supplies or injure fish life.” (Calland Decl. Ex. 49, at Feenstra 000116.)
Grumman dug “recharge basins” directly into the ground throughout the Beth-page Facility, which it used at least in part to dispose of wastewaters. (NGC 56.1 ¶ 21.) The discharge basins were designed to allow the wastewater to infiltrate back into the ground and return it to groundwater, (Id. ¶ 22.) There were at least a dozen recharge basins across the Bethpage Facility at various points in its operational history. (Id. ¶ 23.)
The volume of discharge water was significant. For instance, during the period before 1974, there were five million gallons of wastewater per week coming out of plant # 3. (Id. ¶ 25.)
When the discharge basins became clogged and water could no longer percolate into the ground, Grumman would use bulldozers to scrape the basins. (Id. ¶ 28.) The scrapings obtained from these discharge basins were then used to fill in other low-lying areas on the premises of the Bethpage Facility. (Id. ¶ 29.)
Until 1949, Grumman also used waste-waters containing chromium, a contaminant, generated through manufacturing operations at the Bethpage Facility, in recharge basins. (Id. ¶¶ 30, 198200.) In December 1947, the New York State Department of Health (“NYSDOH”) contacted Grumman regarding a detection of chromium in the local municipal water supply well. (Id. ¶ 31.) In its letter, the NYSDOH stated that it required Grumman to take action to prevent chromium wastes from being discharged into the waters of the State without proper treatment for the removal of chromium. (Id.) Three off-site wells were subsequently and permanently closed — one at which the chromium had been detected and two others. (Id. ¶ 32.)
In 1949, Grumman built an Industrial Wastewater Treatment Facility (“IWTF”) or Industrial Wastewater Treatment Plant (“IWTP”) at plant # 2 to remove chromic acid wastes from industrial wastewater. (Id. ¶ 33.) The IWTF did not treat waste-water for TCE contamination. (Id. ¶ 34.) Before 1981, water treated at the IWTF to remove chromium was directed to plant # 2 recharge basins. (Id. ¶ 35.)
One byproduct of the water treatment at the IWTF was sludge containing hexavalent chromium, which was further treated to become trivalent chromium; the sludge containing the trivalent chromium was then pumped into covered holding tanks outside of the IWTF. (Id. ¶¶ 36, 37.) This sludge was then further transported to areas within the 18-acre parcel that was transferred to the Town of Oyster Bay in 1962 and that became the Bethpage Community Park. (Id. ¶ 38.)
Grumman contends that state and county regulators were aware of and had approved its sludge drying process and the location of its sludge disposal areas. (Id.) Grumman also contends that regulators considered the sludge non-toxic. (Id. If 39.)
Starting in 1970, Grumman used a 4,000-gallon aboveground tank at plant #2 to store TCE. (Id. ¶ 43.) At some point, Grumman discovered that the tank was leaking and replaced the tank. (Id. ¶¶ 44, 48.) Grumman does not know the number of years that TCE had been leaking before it was discovered, but Grumman knew that it had unexplained “loss” of TCE for an estimated two or three years prior to discovery of the leak. (Id. ¶¶ 4446.) Grumman replaced that leaking tank after it had already discharged “a lot” of TCE. (Id. ¶ 48.) A former Grumman employee testified that when the tank was removed, the tank was “rotted out on the bottom.” (Travelers’ Reply to Grumman’s Response to Travelers’ Rule 56.1 Statement (“Travelers’ Reply 56.1”) ¶ 3; Cannella Deck Ex. 77, at 62:25-63:2.)
Grumman sprayed waste oil on dirt roads within the Bethpage Facility in order to control dust. (NGC 56.1 ¶ 49.) The Town of Oyster Bay also sprayed oil for dust control purposes during the same period. (Id.) “There could have been any number of contaminants in” the waste oil. (Id. ¶ 50 (emphasis removed).)
Starting in the early 1950s and continuing to 1982, Grumman maintained a drum marshaling area east of plant #8. (Id. ¶ 51.) Various solvents, including cyanide wastes and cadmium, were in these drums. (Id. ¶ 52.) The ground under the drums was cinder-covered. (Id.) Grumman kept the drums on the site until they could be treated or disposed of, including off-site. (Id.) By 1981, Grumman had added a “bermed concrete pad” and stored “drums on skids.” (Id. ¶ 53.)
Grumman also stored halogenated and non-halogenated waste solvents on a 100-foot-by-100-foot storage area from the early 1950s through 1969. (Id. ¶ 60.)
Three autoclaves for heating and hardening parts were installed before the mid-1960s; at least one was installed as early as 1955. (Id. ¶ 61.) Two of the three autoclaves used Therminol as a heat transfer fluid; 97-98% of Therminol consisted of PCBs. (Id. ¶ 62; Amended Statement of Undisputed Material Facts Pursuant to Local Rule 56.1 (“Travelers 56.1”) ¶ 62.) PCB-containing fluid was released into the storm water system via floor drains in plant # 3; the piping in the floor drains led to releases to the storm drains, which led to leaching pools that Grumman had constructed, and which ultimately led to the recharge basins. (NGC 56.1 ¶ 63.)
In 1962, Grumman transferred an 18-acre parcel of land to the Town of Oyster Bay. (Id. ¶¶ 64, 65.) After 1962, Grumman therefore no longer owned the 18-acre parcel and performed no operations on the parcel. Grumman then created four new sludge-drying beds at plant # 3. (Id.) It dug these new drying beds directly in the ground. (Id. ¶ 65.)
In approximately 1973, Grumman’s manager of environmental protection, John Ohlmann, learned of taste and odor problems at a newly-opened well at the Beth-page Facility, and reported these issues to NCDOH. (Id. ¶ 71.) One former Grumman employee testified that after he would drink the water he would burp, and that his burp smelled like TCE. (Travelers 56.1 ¶ 68; NGC 56.1 ¶ 68.) This employee reported his experience to his supervisor in the 1970s. (/¿¶69.)
In 1975, Grumman detected “in their own analysis [of the groundwater on-site] ... the presence of three hydrocarbons ... methane, ethylene and either methyle propane or propadiene.” (Id. ¶ 72; Cannella Decl. Ex. 43, at NGINS000210674.) Samples collected by the Bureau of Water Resources from wells 8 and 14 in August 1975 contained TCE, tetra-chloroethylene, dichlorethylene, and vinyl chloride. (NGC 56.1 ¶ 74.) The NCDOH made a preliminary determination that the “discharge of sanitary and industrial wastes at and in the vicinity of the Grumman Corporation is considered responsible for the degradation in quality of Grumman Corporation wells.” (Id. ¶ 77.)
In May 1975, the Bureau of Water Resources for the NCDOH prepared a “Pre-Hminary Report, Groundwater Contamination, Grumman Aerospace Corporation.” (Cannella Decl. Ex. 1.) In the “Summary and Conclusions,” the report states:
Water quality at the Grumman Aerospace Corporation has continued to decline to the extent that the most serious and severe instance of Magothy aquifer contamination in Nassau County is now evident....
The discharge of sanitary and industrial wastes at and in the vicinity of the Grumman Corporation is considered responsible for the degradation in quality of the Grumman Corporation wells....
(Id. at NCDOH-OOH455.) A portion of the report labeled “Sources of Contamination” states:
Grumman Aerospace Corporation wells are located within the large, as yet unsewered portion of Sewer District No. 3 in the Town of Oyster Bay. As a result, all industrial and domestic wastes in the vicinity are discharged after treatment on site to surface or subsurface disposal systems which are considered potential sources of pollution to the groundwater.
(Id. at NCDOH-0011463.) In its “Discussion of Results,” the report states:
Probable contamination of groundwater by industrial sites is indicated with the detection of the Environmental Protection Agency of organic contaminants in the Hooker Chemical Corporation lagoons and sewer recharge basins of the Grumman Corporation.
(Id. at NCDOH-0011464.) This report was shared with Grumman. (See, e.g., NGC 56.1 ¶ 76.)
Hooker Chemical Corp. was a business unrelated to Grumman and had a facility adjacent to the northwest piece of the Bethpage Facility. In 1975 and 1976, Hooker Chemical Corp. was also considered a source of the groundwater contamination. (Cannella Ex. 1, at NCDOH0011464; NGC 56.1 ¶ 77.)
A November 5, 1975 “Summary of Groundwater Quality” states that a “most serious instance of Magothy aquifer contamination is now evident at the Grumman Aerospace Corporation.” (Calland Decl. Ex. 86, at NGINS000619195.)
In June 1976, a groundwater consulting firm hired by Grumman, Geraghty & Miller, sent Grumman a memorandum that stated that it had “interpreted from the available data the ground-water quality situation at Grumman as resulting from one of two possibilities.” (Cannella Decl. Ex. 3, at NGINS001899582.) The first was a “slug” of contamination that had gathered in the shallow aquifer underlying at least part of the Bethpage Facility and that was moving southeast, “following the regional pattern of the ground-water flow.” (Id.) The second possibility was “the same as the first” except that the “water has moved vertically downward and affected water quality in portions of the intermediate and deep aquifers on the site.” (Id.)
On August 6,1976, Michael J. Alarcon of the NCDOH sent Harry F. Smith of EPA a “description of the problem of groundwater contamination at the Grumman Aerospace Corporation, accompanied by a proposal for a water quality study in the Bethpage area of Nassau County”; that letter was intended “to determine what possible means are available to obtain Federal financing” through the EPA. (Calland Decl. Ex. 92, at NCDOH-0002710.)
On November 30, 1976, the NCDOH issued a written “Synopsis of [the] Well Contamination Problem at Grumman Aerospace Corporation Facilities in Beth-page.” (Cannella Decl. Ex. 4.) The paper states that practices at both Hooker Chemical Corporation and Grumman may be contributors to the pollution:
The specific organic chemicals found in Grumman wells have been identified in the recharge basins of the Hooker Chemical Company which is located adjacent and to the east of the Grumman Plant. Some of these chemicals have also been found in the recharge basins on the Grumman property. The present preliminary indication is that the primary source of the chemicals is the Hooker waste discharges with the possible implication of Grumman discharges.
(Id. at NCDOH-0002943.) The paper also stated that sampling results showed TCE at wells no. 1, 5, 8, 14, and in a Grumman basin, and tetra chloroethylene at wells no. 5, 8, 14, and in the basin. (Calland Decl. Ex. 95, at NCDOH-028205.)
On December 13,1976, Francis V. Padar of the NCDOH presented a comprehensive public statement on the presence of trace organic chemicals in groundwaters, in which he stated that the Hooker Chemical Company was implicated at that time “as the major, if not the total source, of the vinyl chloride and the chloroethylenes.” (Calland Decl. Ex. 98, at NCDOH0002993-NCDOH-0002994.) However, Padar stated that the “Grumman industrial operations ... use similar chemical compounds which may be contributing to the' problem.” (Id. at NCDOH-0002994.) That statement also noted that the “general groundwater movement is southerly at a rate of movement in the Bethpage area of one to two feet per day.!’ (Id. at N CDOH-0002996.)
In December 1976, Grumman attended a meeting at which 11 local, state and federal agencies were represented regarding the contamination of the well water. (NGC 56.1 ¶ 82.) NYSDOH was one of the agencies with a representative at the meeting. (Id. ¶ 83.) There were a number of news articles in November and December 1976, which Grumman clipped and maintained in its files, discussing the groundwater contamination issue at Grumman’s wells. (Cannella Decl. Ex. 6.)
In 1977, the New York State Department of Environmental Conservation (“NYSDEC”) requested that Grumman test water on its site; it suggested that Grumman have the samples tested for, inter alia, TCE. (Id. ¶ 87.) Samples reflected a presence of TCE. (Id. ¶ 88.) In one instance, water that had been “recharged” and returned to the ground was found to have a higher level of TCE than water pumped from the ground. (Id.) Grumman’s study concluded that the instance in which water that had been recharged had a higher level of TCE was derived from “housekeeping practices” and stated that the “[s]olution to the problem of excess concentrations of certain compounds in the recharge water lies in modifying selected housekeeping procedures.” (Id. ¶ 90.) The same study distinguished housekeeping practices such as “spills, cleanup of equipment, etc.” from Grumman’s production operations. (Id.)
On January 5, 1978, Geraghty & Miller provided Grumman with the results of a three-day “intensive monitoring program” it had performed at the Bethpage Facility. (Cannella Decl. Ex. 8, at NGINS000768958.) Among the chemicals for which Geraghty & Miller tested was TCE. TCE and certain other chemicals were found to be present “in greater amounts, for at least one sampling, in recharge water than in” water pumped from the wells. (Id. at NGINS000768972.) In addition, the report stated that:
There was no apparent single source in the plant as all of the outfalls yielded one or more of these constituents in greater-than-pumped quantity.... These occasional excess amounts suggest that these compounds are not being contributed through production operations. They are probably derived from housekeeping practices (spills, cleanup of equipment, etc.) or some intermittent activity of an unknown kind.
(Id. at NGINS000768975.) At least one of the wells with elevated levels (well no. 16) was upgradient from Hooker Chemical’s plant: the water flow was southeast, but Hooker was to the west of Grumman. (See Cannella Decl. Ex. 3, at NGINS001899582; Scanlon Decl. Ex. 5 (Langseth Decl.) ¶ 4.) Thus, the contamination in that well could not have come from Hooker.
On January 26, 1979, as part of an environmental permitting process, Grumman presented the results of the three-day study to NYSDEC. (Cannella Decl. Ex. 11, at NGINS000619272.) The report “diseuss[es] the control technologies by which Grumman proposes to reduce or eliminate contaminants from” certain sources, including TCE. (Id. at NGINS000619272.) Specifically, Grumman set forth various ways to reduce the listed chemicals in its “effluents.” (Id. at NGINS000619273.) The report continues, “[a]s discussed in our first report, several sources of potential discharge exist in our plants.... The sources we listed previously are: 1. Well water supply; 2. Paint booth wastes (water curtain type); 3. Open plant drains and sinks.” (Id.) In terms of paint booth wastes, the report states that the water curtains are “a possible source of organic chemical contamination,” that Grumman had “performed several analyses of the waste waters” from the curtains, and that in all cases “the treated effluents were within discharge standards.” (Calland Decl. Ex. 116, at NGINS000619273.) In terms of open plant drains and sinks, the report states:
As previously mentioned, there are times when trichloroethylene, 1,1,1-tri-chloroethane and methyl ethyl ketone have been found in the discharge in greater amounts than introduced. The fact that the occurrences have been temporary, rather than continuous, points to a housekeeping problem within our production plants. To correct this problem and prevent future discharges, Grumman has embarked on a comprehensive course of action designed to eliminate spills and dumps throughout the plant facilities and to restrict, through various control measures, the use of chemicals within the plant....
(Cannella Decl. Ex. 11, at NGINS00061927576.)
The report lists several courses of action, including:
1. Chemical Waste Collection System Grumman has revised its formal chemical waste collection system throughout the major production plants and laboratories. This revision provides for an easy, more positive method of collection of waste organic materials such as solvents and cleaners.... Through company-wide employee training and appropriate management controls, this policy should minimize if not eliminate unauthorized dumping....
2. Control of Access to Chemicals ...
3. Training of Employees
... Grumman’s Training Department has developed several training courses.... Through the application of these programs, we are confident that housekeeping problems with chemical discharges will be eliminated.
(Id. at NGINS00061927677.) The report then summarizes, “The additional technologies described above ... will substantially eliminate the problem of intermittent spills of chemicals within our plants.” (Id. at NGINS000619278.)
In 1979, the EPA gave NYSDOH to assess water supply programs and to assess surface disposal sites, including Grumman’s Bethpage Facility. (NGC 56.1 ¶ 95.) The NYSDOH found that Grumman’s “ground-water pollution potential” was “slightly higher than average.” (Id. ¶ 97.) The NYSDOH then took and tested sludge samples. (Id. ¶ 98.)
In 1979, Grumman agreed to perform a “sludge leachability test” for NYSDEC. (Id. ¶ 100.) By 1980, NYSDEC and NY-DOH had reviewed the results of testing. (Id. ¶ 94.) The results were sent to the EPA, which deemed the Bethpage Facility a “low priority for further EPA involvement at [that] time.” (Id.)
In June 1980, the NYSDEC, in cooperation with the NYSDOH, published a report naming Grumman’s Bethpage Facility as among active hazardous waste disposal sites and assigning it the “Site Code 130003.” (Id. ¶ 93; see also Cannella Exs. 15, 16.) Notably, this was more than 18 years after the 18-acre parcel that became the Bethpage Community Park had been transferred to the Town of Oyster Bay. (See NGC 56.1 ¶ 65.) There is no indication that the Site Code intended to capture and name as a hazardous waste disposal site what was then being used as a community park. This is further confirmed by the fact that the report describes the Beth-page Facility as an “active industrial site.” (Id. ¶ 93; see also Cannella Ex. 15, at NGINS002895607; Ex. 16.) The Beth-page Community Park was not an active industrial site.
The June 1980 report addresses a number of hazardous waste sites in New York State. (Cannella Decl. Ex. 15.) A summary at the beginning of the report states, “Vigorous state programs are needed to bring about remedial action or to recover the costs of needed remedial actions at uncontrolled hazardous waste sites from the responsible parties.” (Id. at NGINS002895565.) The State identifies three courses of action: to negotiate with the responsible party, to take administrative action to order responsible parties to clean up an old dump site, and/or to go to court. (Id. at NGINS002895567.) The report recommends support of a federal “Superfund” to assist in remediating certain sites. (Id. at NGINS00289556970.)
In September 1980, the Bethpage Facility was listed in a NYSDEC Registry of Hazardous Waste Disposal Sites. (Cannella Decl. Ex. 16.) The report states that the wastes are from, inter alia, “metal cleaning operations.” (Id. at C-l-3.)
A NYSDEC 1983 report also lists Site 130003 as a Hazardous Waste Disposal Site. (NGC 56.1 ¶ 103.)
On December 6, 1983, the NYSDEC sent Grumman a “potentially responsible person” letter (the “PRP Letter”). (Id. ¶ 104.) The PRP Letter initiated a formal, adversarial proceeding against Grumman for environmental contamination at the Bethpage Facility “and its environs.” (Id.) Grumman sent the letter to its broker; in late January 1984, the broker subsequently sent the letter to “Travelers” at an address that was not a business or other address for Travelers. (Travelers 56.1' ¶ 163.) A January 20, 1984 letter from Travelers to J.A. Morgese of Frank B. Hall and Co. regarding “New York State v. Town of Oyster Bay, et al.” (a lawsuit related to the Old Bethpage Landfill) set forth the address that Grumman’s broker later used to send the 1983 PRP Letter to Travelers. (See NGC 56.1 ¶ 162; Calland Deck Ex. 139, at TRAV00570.) However, there is no record evidence that Travelers ever received the 1984 letter enclosing the 1983 PRP Letter. (Travelers 56.1 ¶ 164.) No Travelers witness has any recollection of seeing the 1984 letter or the 1983 PRP Letter. (Id. ¶ 167.) The 1984 letter also does not appear in Grumman’s files. (NGC 56.1 ¶ 165.) No Grumman witness recalls having seen this letter prior to this litigation. (Travelers 56.1 ¶ 168; NGC 56.1 ¶ 168.) A claims handler at INA (a predecessor company to Century) did receive a copy of the letter, which is how it came to be part of the materials in this litigation. (NGC 56.1 ¶ 165.)
The lawsuit relating to the Old Bethpage Landfill concerned a sludge drying bed no longer in use. The text of the cover letter also states, “[E]nelosed is additional information on the above captioned for your files.” (Id. ¶ 171.) The complaint in the Old Bethpage Landfill lawsuit was sent to Grumman on December 9, 1983. (Cannella Ex. 19, at NGINS002909700.) It was reported to the Grumman board on January 19, 1984. (Cannella Ex. 21, at NGINS001892952.) The Old Bethpage Landfill claim concerned sludge taken from a sludge drying bed at the Bethpage Facility to the Old Bethpage Landfill.
The body of the 1983 PRP Letter references Site 130003. (NGC 56.1 ¶ 170.) The letter also refers to a claim for damages to natural resources “at and around” the Bethpage Facility and its “environs.” (Id.) An excerpt from NYSDEC’s June 1980 registry attached to the PRP Letter referred to a “sludge drying bed.” (Travelers 56.1 ¶ 172; Cannella Deck Ex. 22, at CEN00001121.)
In a memorandum dated January 11, 1984, Grumman states that the 1983 PRP Letter covers damage “attributable to GAC’s on-site sludge drying bed, identified as site # 130003.” (Travelers 56.1 ¶ 173.) On January 24, 1984, a letter authored by a Grumman insurance manager states that the “site in question is no longer in use.” (Id. ¶ 174.) In its Board of Directors meeting minutes and its 10-K, Grumman described the 1983 PRP Letter as “related to a disposal site which was located within the property boundaries of [the] ... facility in Bethpage, New York.” (Id. ¶ 175.)
A letter from Arthur Gibson, Grumman’s former employee, dated April 10, 1984, refers to Site 130003 as “the GAC sludge beds.” (NGC 56.1 ¶ 178.) At his deposition, Gibson stated that he believed at the time he wrote the letter that Site 130003 “pertained to the sludge beds but [was] not limited to the sludge beds.” (Id.) An Initial Assessment Study performed in 1986 also states that the 1983 PRP Letter related to the “sludge drying beds.” (Travelers 56.1 ¶ 179.)
John Ohlmann, John Ball (a Grumman lawyer), and David Miller (Grumman’s environmental consultant) attended a meeting with NYSDEC on December 11, 1986. (NGC 56.1 ¶ 105.) In a memorandum dated December 12, 1986 that summarized the meeting, Ohlman and Ball wrote to Dean Cassell of Grumman that NYSDEC had requested a field investigation that “could be the first step leading to a very serious and expensive liability of Grumman for possible cleanup costs, if it were determined Grumman contributed contaminants to the groundwater and a cleanup of some kind was required.” (Id. ¶ 107.) The memorandum noted that the possible clean-up costs could “conceivably be in the 10-20 million dollar range” and that the NYSDEC request could be the “opening gun of a long drawn-out controversy about the matter.” (Id. ¶ 108.) At this time, Grumman did not provide Travelers with notice of this field investigation or its views as to potential monetary exposure.
Beginning in 1986, the U.S. Geological Survey (“USGS”) and NCDOH conducted a cooperative study of the groundwater near Bethpage. (Id. ¶ 109.) By 1987, the USGS and NCDOH study identified a plume of contaminated groundwater partially beneath the Bethpage Facility. (Id. ¶ 110.) At this time, Grumman did not provide Travelers with notice of this finding.
Gibson, a former Grumman employee, has stated that, as Grumman accumulated data following receipt of the 1983 PRP Letter and various studies were conducted thereafter, Grumman realized that plant # 2 on the Bethpage Facility was a likely source of TCE contamination. (Id. ¶ 111.) However, Grumman continued to believe that Hooker Chemical Corp. also contributed to the contamination. (Id.) There is no evidence in the record that Grumman notified Travelers of this finding with respect to plant # 2 at or even near the time at which the finding was made.
On December 6, 1987, NYSDEC reclassified the Bethpage Facility as a “Class 2 Site,” or a site posing a “[significant threat to the public health or environment” and requiring remedial action; it also noted that groundwater standards had been contravened. (Id. ¶ 113.) On the same day, NYSDEC informed Grumman that a “full scale [Remedial Investigation/Feasibility Study] is required at the Grumman Bethpage Site.” (Id. ¶ 114.) Grumman did not notify Travelers of this reclassification or the full-scale investigation and study at any time in any way in 1987 or 1988. As set forth in its Form 10-K, by the end of 1987, Grumman had agreed to do the requested investigation and study. (Id. ¶ 117.) Grumman estimated that the work involved would cost hundreds of thousands of dollars. (Id. ¶ 119.)
In July 1988, Geraghty & Miller provided a remedial investigation/feasibility study (“RI/FS”) work plan for the Beth-page Facility. (Cannella Decl. Ex. 38.) In a section entitled “Ground-Water Contamination,” the work plan states:
Beginning in the early 1940s (during World War II) Bethpage plant waste waters (containing chromic acid wastes) were discharged on-site. In the late 1940s Nassau County Department of Health (NCDH) reported the presence of hexavalent chromium in a well south of the Grumman facility. Grumman began studying the problem in the late 1940s and implemented a chromic acid waste treatment process....
(Id. at NGINS000674266-67.) In a section entitled “Environmental and Health Concerns,” the report states:
The three primary contaminant transport routes at the Grumman facility capable of affecting the environment and raising health concerns are soil, ground water, and surface water....
In the past, the south recharge basins ... were used for the discharge of treated waste waters from the Plant 02 Industrial Waste Treatment Plant. These discharges were monitored under a state discharge permit.
Potential sources of soil contamination at the site have been identified from a review of the site history data.
(Id. at NGINS00067426768.) In terms of TCE handling, the report states:
The Plant 02 waste trichloroethylene storage/recycling facility had been in operation from 1940s to late 1970s. Waste trichloroethylene was transferred by drums from the degreasing tanks to the TCE recycling facility at Plant 02. The recycled TCE was held in a bulk tank for re-use in Plant 02 (Ohlmann, 1988.)
(Id. at NGINS000674279.) The report bases its recommendations upon analytical data from 1970 onwards. (See, e.g., id. at NGINS000674281, NGINS000674346 (showing test results for trichloroethylene dating from the mid-1970s).) A “Chronological Record of the Bureau of Water Resources’ Investigation of Groundwater Contamination, East Central Nassau County” was included as an appendix to the Geraghty & Miller work plan. (Id. at NGINS000674402.) That chronology sets forth issues dating from 1973 relating to contamination of drinking wells on site. (Id.)
Grumman submitted the Geraghty & Miller work plan to NYSDEC. (NGC 56.1 ¶ 122.) Grumman did not provide written notice to Travelers that these communications in 1987-88 had occurred or that negotiations with NYSDEC were ongoing. (Id. ¶ 124.)
A former Grumman employee has testified that, at a meeting with Travelers in 1989, representatives of Travelers and Grumman discussed the NYSDEC request orally. (Id. ¶ 124,180.)
On October 25, 1990, Grumman entered into a consent order with NYSDEC that required Grumman to conduct the investigation and study at the Bethpage Facility. (Id. ¶ 125.) In 1990 or the immediate years thereafter, Grumman did not inform Travelers that it had entered into this consent order.
NYSDEC issued Records of Decision (“RODs”) in 1995 and 2001 relating to the Bethpage Facility. (Id. ¶ 127.) These RODs set forth remedial measures Grumman was required to implement to cure findings of environmental conditions in or around the Bethpage Facility. (Id.) Among other things, the RODs found that groundwater plumes in and around the Bethpage Facility contained TCEs and other chlorinated VOCs. (Id. ¶ 128.) The RODs refer to the TCE storage tank outside of plant # 2, the plant # 2 recharge basins, the former drum marshaling area at plant # 3, the plant # 3 recharge basins, and the salvage storage area at plant # 3. (Id. ¶ 129.) A Grumman presentation dated 2002 states that the “[gjroundwater problem is due to the discharge of [TCE] during the 40’s, 50’s, 60’s, and 70’s.” (Id. ¶ 130.) Grumman did not provide Travelers with the RODs when they were issued.
In 1990, Grumman submitted an appendix to NYSDEC titled “Information on Reported Spills, Leaks and Releases at the Grumman Aerospace Corporation and U.S. Naval Weapons Industrial Reserve Plant, Bethpage, New York.” (NGC 56.1 ¶¶ 135, 136; Cannella Deck Ex. 43, at NGINS000210735.) The appendix included a certification, signed under penalty of perjury, stating that:
I certify under the penalty of law that I have personally examined and am familiar with the information submitted in this document and all attachments] and that, based on my inquiry of those individuals immediately responsible for obtaining the information, I believe that the information is true, accurate, and complete. I am aware that there are significant penalties for submitting false information, including the possibility of fine and imprisonment.
(NGC 56.1 ¶ 136.) The appendix identifies a few isolated spills, but there is no evidence that any involved TCE. (Travelers 56.1 ¶¶ 138, 139.) Steven Scharf, the NYSDEC designee, testified that he was not aware of any explosions, fires, abrupt
releases, or accidents at the Bethpage Facility, nor did NYSDEC have any record of any reports of the same. (Id. ¶¶ 134, 135; Travelers 56.1 ¶¶ 134, 135.)
In a 2012 letter from Northrop to Travelers, Northrop estimated that it had spent $40,600,000 to date, but stated that those estimates did “not take into account all potential eost[] contingencies.” (NGC 56.1 ¶ 140.) Grumman did not obtain Travelers’ consent prior to incurring the specific costs that comprised this $40 million-plus. Among these costs were those related to the installation of a soil vapor extraction system and an on-site containment system that Grumman continues to operate to this day. (Id. ¶¶ 142, 143.) The soil vapor extraction system was specifically “designed to remove the TCE in unsaturated soils” in a TCE “source area which was found adjacent to Plant 2.” (Id. ¶ 142.)
By the mid-1990s, Grumman had entered into an informal “handshake agreement” with the U.S. Navy relating to allocation of costs regarding the Bethpage Facility remediation and cleanup. (Id. ¶ 144.) Grumman did not inform Travelers of this agreement when it occurred or even in the immediate years thereafter.
Grumman merged with Northrop in 1994. (See id. ¶ 147.) In 1999, Northrop initiated an effort “to assess the potential for significant cost recovery of company environmental remediation expenses from applicable insurance coverage.” (Id.) In 2009 and early 2010, Northrop worked with outside legal counsel to evaluate and pursue insurance recoveries for environmental liabilities. (Id. ¶ 153.)
On February 1, 2012, Northrop sent a letter to Travelers requesting coverage for the Bethpage Facility. (Id. ¶ 157.)
II. TRAVELERS’ POLICIES AT ISSUE
Travelers issued a series of primary and excess liability policies to NGC’s predecessors effective from January 1, 1968 through January 1, 1985. (Northrop Grumman’s Responses to Travelers’ “Statement of Undisputed Material Facts Pursuant to Local Rule 56.1 in Supp. of Travelers’ Mot. for Summ. J. Regarding the Community Park” (“NGC BCP 56.1”) ¶ 109.) All of the policies at issue on this motion require Grumman to provide Travelers with immediate written notice of a claim. They each contain the following language:
If claim is made or suit is brought against the insured, the insured shall immediately forward to the company every demand, notice, summons or other process received by him or his representative.
(NGC 56.1 ¶ 184.) All of the Travelers primary policies provide:
No action shall he against the company unless, as a condition precedent thereto, there shall have been full compliance with all of the terms of this policy, nor until the amount of the insured’s obligation to pay shall have been finally determined either by judgment against the insured after actual trial or by written agreement of the insured, the claimant and the company.
(Travelers 56.1 ¶ 185; NGC 56.1 ¶ 185.) The Travelers Catastrophic Umbrella policies provide:
Written notice shall be given by or on behalf of the insured to the company or any of its authorized agents as soon as practicable whenever (a) bodily injury or property damage takes place, or (b) an act or omission takes place resulting in other injury or damage, which appears reasonably likely to involve this policy.
(Id. ¶ 186.) The Travelers primary policies at issue prohibit the insured from voluntarily assuming obligations or expenses without Travelers’ consent:
The insured shall not, except at his own cost, voluntarily make any payment, assume any obligation or incur any expense other than for first aid to others at the time of the accident.
(Id. ¶ 188.) The Travelers policies in effect from January 1, 1968 through January 1, 1972 do not contain any pollution exclusions. (NGC BCP 56.1 ¶ 110.)
All insurance policies in effect in New York between January 1, 1972 and January 1, 1983, with the exception of Policy No. TREE-SLG-107T519-8-82, incorporate New York State’s statutory pollution exclusion:
Policies ... issued to commercial or industrial enterprises providing insurance against the legal liabilities specified in this subdivision shall expressly exclude therefrom liability arising out of pollution or contamination caused by the discharge, dispersal, release or escape of any pollutants, irritants or contaminants into or upon land, the atmosphere or any water course or body of water unless such discharge, dispersal, release or escape is sudden and accidental.
(Travelers 56.1 ¶ 181 (quoting N.Y. Ins. Law § 46(13) & (14) (McKinney 1981)).) The Travelers policies in effect between January 1, 1983 and January 1, 1985, contain a different form of pollution exclusion:
This insurance does not apply to bodily injury or property damage arising out of any emission, discharge, seepage, release or escape of any liquid, solid, gaseous or thermal waste or pollutant if such emission, discharge, seepage, release or escape is either expected or intended from the standpoint of any insured or any person or organization for whose acts or omissions any insured is liable.
(Travelers 56.1 ¶ 182). Travelers’ Policy No. TREE-SLG-107T519-8-82 contains this form of pollution exclusion. (NGC 56.1 ¶ 183.)
III. LEGAL STANDARD FOR SUMMARY JUDGMENT
The mere fact that submissions on summary judgment are extensive (even requiring a small moving truck) does not mean that there is a genuine issue for trial. Such extensive submissions may mean that the record is simply a large one. The facts material to resolution of the motion may nonetheless be undisputed by competent evidence. The size of submissions may also be tactical — meant by the nonmovant to convey a sense that “there must be something that would preclude summary judgment in here!” Or the size may be due to something else entirely.
On this motion, the Court has carefully reviewed the parties’ submissions, aided by their additional submission of DVDs with documents hyperlinked to the text of the submissions, allowing for easier reference. The submissions are — to put it mildly— extensive. But they do not contain a triable issue of fact that precludes granting Travelers’ motion.
In reviewing the submissions of the parties, the Court has been careful to keep in the forefront the legal principles that on such a motion, it may not weigh the evidence or make credibility findings. See Jeffreys v. City of New York, 426 F.3d 549, 551 (2d Cir.2005). If there are competing inferences to be drawn from the evidence presented on the motion, the Court must draw any competing inferences in favor of the nonmoving party-here, Northrop. Dickerson v. Napolitano, 604 F.3d 732, 740 (2d Cir.2010). This Court can only grant summary judgment when, notwithstanding these legal principles, the moving party is able to demonstrate that based on admissible evidence, “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a).
Of course, contested facts unnecessary to resolution of this motion do not create triable issues. Here, the record is full of such facts. That this Court has not considered such facts is due to their legal irrelevance to resolution of the motion.
As the moving party, Travelers bears the burden of demonstrating “the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). If Travelers has proffered facts showing that it is entitled to judgment as a matter of law, Northrop must come forward with specific facts showing a genuine issue for trial. See Price v. Cushman & Wakefield, Inc., 808 F.Supp.2d 670, 685 (S.D.N.Y.2011); see also Wright v. Goord, 554 F.3d 255, 266 (2d Cir.2009). “[A] party may not rely on mere speculation or conjecture as to the true nature of the facts to overcome a motion for summary judgment,” as “[mjere concíusory allegations or denials cannot by themselves create a genuine issue of material fact where none would otherwise exist.” Hicks v. Baines, 593 F.3d 159, 166 (2d Cir.2010) (citations omitted); see also Price, 808 F.Supp.2d at 685 (“In seeking to show that there is a genuine issue of material fact for trial, the non-moving party cannot rely on mere allegations, denials, conjectures or conclusory statements, but must present affirmative and specific evidence showing that there is a genuine issue for trial.”).
IV. APPLICABLE LEGAL PRINCIPLES
A. Pollution Exclusions
Whether summary judgment is appropriate based on the statutory or policy-based pollution exclusions depends on the legal interpretation of both the phrase “sudden and accidental” and “expected or intended,” as well as whether there is a triable issue of fact as to Grumman’s actions as measured against those legal standards.
1. Burden of Proof
As the policyholder, Northrop Grumman bears the burden to show that any releases were “sudden and accidental,” because the phrase “unless such discharge, dispersal, release or escape is sudden and accidental” functions as an exception from the statutory exclusion applicable to the Travelers policies issued between January 1, 1972 and January 1, 1983. See Northville Indus. Corp. v. Nat’l Union Fire Ins. Co., 89 N.Y.2d 621, 634, 657 N.Y.S.2d 564, 679 N.E.2d 1044 (1997).
For Travelers’ policies issued between January 1, 1983 and January 1, 1985, Travelers bears the burden to show that any releases were not “expected or intended,” because the phrase “if such emission, discharge, seepage, release or escape is either expected or intended” modifies the exclusion for pollution itself. See Northville, 89 N.Y.2d at 634, 657 N.Y.S.2d 564, 679 N.E.2d 1044.
The burden of obtaining summary judgment on insurance coverage is a high one and is borne by the movants. Travelers has the burden of showing that the statutory and policy exclusions clearly and unmistakably bar coverage on the undisputed facts. See Belt Painting Corp. v. TIG Ins. Co., 100 N.Y.2d 377, 383, 763 N.Y.S.2d 790, 795 N.E.2d 15 (2003).
2. “Sudden and Accidental”
New York courts have repeatedly held that the “sudden and accidental” pollution exclusion is “unambiguously plain and operative.” See Powers Chemco, Inc. v. Fed. Ins. Co., 74 N.Y.2d 910, 911, 549 N.Y.S.2d 650, 548 N.E.2d 1301 (1989); Technicon Elecs. Corp. v. Am. Home Assur. Co., 74 N.Y.2d 66, 71, 544 N.Y.S.2d 531, 542 N.E.2d 1048 (1989) (“Technicon II”); see also Northville, 89 N.Y.2d at 631, 657 N.Y.S.2d 564, 679 N.E.2d 1044.
In order to avoid summary judgment as to coverage despite the statutory exclusion, a policyholder must raise a triable issue of fact as to whether its release of any contaminants was both sudden and accidental. Powers Chemco, 74 N.Y.2d at 911, 549 N.Y.S.2d 650, 548 N.E.2d 1301; New York v. AMRO Realty Corp., 936 F.2d 1420, 1427 (2d Cir.1991). The Second Circuit has described this double requirement as “invoked only when the discharge is both sudden and accidental; if the discharge is either non-sudden or non-accidental, there will be no coverage.” Id.
The statutory language and interpreting case law make clear that the factual question as to “what” must be sudden and accidental relates to the discharge, dispersal, or release of “any” pollutants, contaminants or irritants. N.Y. Ins. Law § 46(13) & (14); see also Travelers Indem. Co. v. Orange & Rockland Utils., Inc., 73 A.D.3d 576, 577, 905 N.Y.S.2d 11 (N.Y.App. Div. 1st Dep’t 2010).
Courts have held that the word “sudden” has — as one would reasonably expect based on its plain-language meaning — a temporal element. Northville, 89 N.Y.2d at 632, 657 N.Y.S.2d 564, 679 N.E.2d 1044; see also Md. Cas. Co. v. Cont'l Cas. Co., 332 F.3d 145, 158 (2d Cir.2003); Ogden Corp. v. Travelers Indent. Co., 924 F.2d 39, 42 (2d Cir.1991); Technicon Elecs. Corp. v. Am. Home Assur. Co., 141 A.D.2d 124, 533 N.Y.S.2d 91, 99 (App.Div.2d Dep’t 1988) (“Technicon I”), affd, 74 N.Y.2d 66, 544 N.Y.S.2d 531, 542 N.E.2d 1048 (1989). To be sudden, an event must occur “abruptly, precipitantly or ... in a short time.” Northville, 89 N.Y.2d at 632, 657 N.Y.S.2d 564, 679 N.E.2d 1044. Discharges that occur over a period of time are, definitionally, not “sudden.” See, e.g., Ogden Corp., 924 F.2d at 42; AMRO Realty, 936 F.2d at 1428.
In Northville, a company engaged in the distribution and sale of gasoline maintained both above- and below-ground storage tanks as well as networks of connecting pipes. 89 N.Y.2d at 629-30, 657 N.Y.S.2d 564, 679 N.E.2d 1044. In 1986 and 1987, the company noticed that there had been a “fortuitous release” of gasoline from two of its facilities that had migrated underneath the neighboring properties. Id. at 630, 657 N.Y.S.2d 564, 679 N.E.2d 1044. Owners of the neighboring properties sued; the insurers denied coverage based on the “sudden and accidental” pollution exclusion. Id. The court stated that “there is no allegation in the underlying complaints against plaintiff ... that the gasoline discharges were anything but unintentional and unknown to plaintiff before they were discovered in 1986 and 1987.” Id. at 631, 657 N.Y.S.2d 564, 679 N.E.2d 1044. The insurers did not dispute that the leakage was “accidental,” but did dispute that it was “sudden.” Id. Plaintiffs argued that because the leakage went undiscovered, whether it was “sudden” should at least create a triable issue of fact. The court disagreed, stating that “sudden — as an abrupt happenstance — in the pollution exclusion clause exception also conforms to the commonsense meaning of the term and the reasonable expectations of a business person.” Id. at 633, 657 N.Y.S.2d 564, 679 N.E.2d 1044. The court adhered to the rationale expressed by other courts that one cannot call “sudden” a process that occurs incrementally, no matter how unexpected or unintended the process. Id.
Moreover, the court found that an onset is not “sudden” simply because a leakage event must commence at some point in time. See id. (“[T]he sudden discharge element of the pollution exclusion exception cannot be established merely by showing that the release of the pollutant had its onset at some particular point in time, and in that sense, the discharge cannot be said to have begun ‘abruptly.’ ”).
In addition to being sudden, in order for a policyholder to overcome the statutory pollution exclusion on a motion for summary judgment, it must also and separately raise a triable issue as to whether the discharge, dispersal or release was “accidental.” N.Y. Ins. Law § 46(13) & (14); see also Powers Chemco, 74 N.Y.2d at 911, 549 N.Y.S.2d 650, 548 N.E.2d 1301. Case law has interpreted “accidental” as meaning neither intentional nor purposeful. Id.; AMRO Realty, 936 F.2d at 1427-28; Technicon I, 533 N.Y.S.2d at 101. The law is clear that “accidental” includes an incident occurring “by chance.” Northville, 89 N.Y.2d at 632, 657 N.Y.S.2d 564, 679 N.E.2d 1044.
As a matter of law, it is of no moment whether the damage was unintentional or accidental; the question is whether the act of discharge, dispersal or release was unintentional or accidental. See id. at 632-33, 657 N.Y.S.2d 564, 679 N.E.2d 1044; see also Technicon II, 74 N.Y.2d at 74-75, 544 N.Y.S.2d 531, 542 N.E.2d 1048. Where a discharge itself was deliberate, it was not accidental. AMRO Realty, 936 F.2d at 1427. “Disposing” of something connotes a deliberate and intentional activity. See id. at 1428 (the fact that certain of the policyholder’s employees did not know where drains led or where waste would end up made no difference, because its disposal was intentional and not accidental); see also EAD Metallurgical, Inc. v. Aetna Cas. & Surety Co., 905 F.2d 8, 11 (2d Cir.1990). Lacking the specific intent to pollute does not make an intentional act of discharge “accidental.” AMRO Realty, 936 F.2d at 1428.
While the statute uses the word “any” in reference to an excluded discharge, case law has held that the discharge must be sufficient to have “some potentially damaging environmental effect.” Northville, 89 N.Y.2d at 634, 657 N.Y.S.2d 564, 679 N.E.2d 1044.
3. “Expected or Intended”
Neither the word “expected” nor the word “intended” is defined in the 1983-1985 Travelers’ policies. As with contract construction generally, the Court can give terms their plain and ordinary meaning unless some other meaning is, from the context, intended. Both words have plain and ordinary meanings and the Court finds no basis to vary from those
meanings here. They are used in the disjunctive in the policy: if a discharge is expected or it is intended, it is excluded from coverage. Put another way, an unexpected or an unintended discharge is covered.
According to the Merriam-Webster Online Dictionary, the term “expect” means “to think that something will probably or certainly happen,” and “intend” means “to plan or want to do (something)” or to have something “as a purpose or goal.” “Expect,” MerriarrAWebster Online Dictionary, http://www.merriam-webster.com/ dictionary/expect (last visited Jan. 22, 2014); “Intend,” MerriamANebster Online Dictionary, http://www.merriam-webster. com/dictionary/intend (last visited Jan. 22, 2014).
The provision of the policies containing this exclusionary language also defines the “act” to which it refers to be the “emission, discharge, seepage, release or escape.” (NGC 56.1 ¶ 182.) Put another way, the focus of the exclusion is on the act relating to the discharge, not whether it was expected or intended that the act would result in damage. See Olin Corp. v. Ins. Co. of N. Am., 762 F.Supp. 548, 561 (S.D.N.Y.1991), aff d, 966 F.2d 718 (2d Cir. 1992); see also Emerson Enters., LLC v. Kenneth Crosby New York, LLC, 768 F.Supp.2d 484, 491 (W.D.N.Y.2011) (“Moreover, the terms ‘expected or intended’ modify the initial ‘emission, discharge, seepage, release or escape’ of pollutants, not the subsequent damage caused.”).
At least one court has interpreted this language in the context of Travelers’ policies and found that non-accidental pollution was expected or intended. See id. at 491-92.
In City of Johnstown N.Y. v. Bankers Standard Ins. Co., 877 F.2d 1146 (2d Cir.1989), the Second Circuit warned against taking the “expected or intended” exclusion too far, at least when an interpreting an occurrence provision. There, the state of New York had sued the City of Johns-town for the costs of studying and cleaning up wastes seeping from a City landfill into surrounding groundwaters. Id. at 1147. The City gave notice of the suit to various insurers who had issued the City various policies over the years; the insurers disclaimed coverage on a number of bases, including that the pollution was intended or expected. Id. at 1147-48. In particular, the insurers argued that the City had had prior notice that pollutants from the landfill were leaking into the groundwater. Id. at 1149. The district court agreed with the insurers that they had no duty to defend; the Second Circuit reversed. Id. at 1147.
In its decision, the Second Circuit used broad language in defining how “expected or intended” should be interpreted. Id. at 1150. The court noted that, while an “intentional” act may cause damages, it may still be considered “accidental” under New York law so long as the “total situation could be found to constitute an accident.” Id. at 1150 (quoting McGroarty v. Great Am. Ins. Co., 36 N.Y.2d 358, 368 N.Y.S.2d 485, 490, 329 N.E.2d 172 (1975)). The court noted that insurance is intended to provide coverage against “mishaps,” and ordinary negligence and taking a calculated risk do not amount to an “expectation” that would preclude coverage. Id. at 1150. The court reiterated that “expected” or “intended” excludes only those acts which are accidental — and that courts have focused on whether an act is intentional, not the resulting damage. Id.
The Second Circuit stated, “Recovery will be barred only if the insured intended the damages or if it can be said that the damages were, in a broader sense, ‘intended’ by the insured because the insured knew that the damages would flow directly and immediately from its intentional act.” Id. at 1150 (citations omitted). The court specifically stated that its decision was based on what the insurers could show “at this stage” of the litigation and was because the damages alleged in the underlying CERCLA action were “not accidental.” Id. at 1151. The “total situation” of the case, which involved the City allowing others to dump hazardous wastes in a landfill, did not rise to the level of intentional. 877 F.2d at 1150-52.
Importantly, City of Johnstown is distinguishable from AMRO Realty, a Second Circuit case decided two years later. City of Johnstown is inapposite to the instant circumstances because the court there was interpreting an occurrence provision. That is an important distinction, because in occurrence provisions, the “expected or intended language focuses on the damage or accident for which the insured seeks indemnification,” whereas in pollution exclusions, those words modify the “discharge” itself. Agway, Inc. v. Travelers Indem. Co., No. 93 Civ. 557, 1993 WL 771008, at *16 (N.D.N.Y. Dec. 9, 1993) (emphasis added).
As set forth above, in AMRO Realty, which governs these circumstances, the Second Circuit stated that, if the disposal or discharge was intentional, the pollution exclusion is triggered. See 936 F.2d at 1427-28. There, a manufacturer had disposed of hazardous manufacturing waste in several places on the site in question, including a parking lot, sinks that discharged into septic systems, and drains that discharged through sewage pipe into a drainage ditch. Id. at 1427. The manufacturer’s intentional disposal of waste — • even without knowing that it would be released into the environment — was sufficient to trigger the pollution exclusion. Id. at 1428.
4. Concurrent Causation
Under New York law, when multiple releases of pollutants are at issue, so long as at least one release was not sudden or accidental and contributed substantially to the contamination, coverage is not automatically barred by the pollution exclusion. See, e.g., New York v. Blank, 27 F.3d 783, 791 (2d Cir.1994) (finding that insurers had a duty to defend a CERCLA action when the underlying complaint did not foreclose the possibility that the “property damage was caused, even if in part, by the ‘sudden and accidental’ discharge of pesticides”); Petr-All Petroleum Corp. v. Fireman’s Ins. Co., 188 A.D.2d 139, 142-43, 593 N.Y.S.2d 693 (N.Y App.Div. 4th Dep’t 1993) (finding that, if leaks occurred abruptly but continued for a period of time, they could fall within the “sudden and accidental” exception). Northrop refers to this as the “concurrent causation rule.” (Northrop Grumman’s Mem. of L. in Opp. to Travelers’ Mot. (“NGC Opp.”) 29.)
B. Notice
Travelers also asserts receipt of late notice as a total defense to Northrop’s claims for coverage with respect to the Bethpage Facility. The parties’ dispute in this regard is less as to the applicable legal standards and more as to whether notice was timely provided, was futile and/or otherwise waived.
Timely notice is a condition precedent to coverage. Am. Ins. Co. v. Fairchild Indus., Inc., 56 F.3d 435, 438 (2d Cir.1995). In Fairchild, an insured party, Fairchild, appealed from the distri