{ "id": 8526239, "name": "WASTE MANAGEMENT OF CAROLINAS, INC., t/d/b/a TRASH REMOVAL SERVICE, INC. v. PEERLESS INSURANCE COMPANY and PENNSYLVANIA NATIONAL MUTUAL CASUALTY INSURANCE COMPANY", "name_abbreviation": "Waste Management of Carolinas, Inc. v. Peerless Insurance", "decision_date": "1984-12-28", "docket_number": "No. 845SC97", "first_page": "80", "last_page": "94", "citations": [ { "type": "official", "cite": "72 N.C. App. 80" } ], "court": { "name_abbreviation": "N.C. Ct. App.", "id": 14983, "name": "North Carolina Court of Appeals" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "192 S.E. 2d 113", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1972, "pin_cites": [ { "page": "118" } ], "opinion_index": 0 }, { "cite": "16 N.C. App. 194", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8549827 ], "year": 1972, "pin_cites": [ { "page": "198-9" } ], "opinion_index": 0, "case_paths": [ "/nc-app/16/0194-01" ] }, { "cite": "13 Envtl. L. Rep. 10204", "category": "reporters:specialty", "reporter": "Envtl. L. Rep. (Envtl. Law Inst.)", "year": 1983, "pin_cites": [ { "page": "10205-06" } ], "opinion_index": 0 }, { "cite": "523 F. Supp. 1055", "category": "reporters:federal", "reporter": "F. Supp.", "case_ids": [ 3340027 ], "year": 1981, "pin_cites": [ { "page": "1072-73" } ], "opinion_index": 0, "case_paths": [ "/f-supp/523/1055-01" ] }, { "cite": "347 So. 2d 95", "category": "reporters:state_regional", "reporter": "So. 2d", "case_ids": [ 9680224 ], "year": 1977, "opinion_index": 0, "case_paths": [ "/so2d/347/0095-01" ] }, { "cite": "314 S.E. 2d 775", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1984, "pin_cites": [ { "page": "779" } ], "opinion_index": 0 }, { "cite": "68 N.C. App. 107", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8526733 ], "year": 1984, "pin_cites": [ { "page": "114" } ], "opinion_index": 0, "case_paths": [ "/nc-app/68/0107-01" ] }, { "cite": "451 A. 2d 990", "category": "reporters:state_regional", "reporter": "A.2d", "weight": 3, "year": 1982, "pin_cites": [ { "page": "994" } ], "opinion_index": 0 }, { "cite": "186 N.J. Super. 156", "category": "reporters:state", "reporter": "N.J. Super.", "case_ids": [ 885597 ], "weight": 2, "year": 1982, "opinion_index": 0, "case_paths": [ "/nj-super/186/0156-01" ] }, { "cite": "284 S.E. 2d 518", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1981, "opinion_index": 0 }, { "cite": "304 N.C. 585", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8569666 ], "year": 1981, "opinion_index": 0, "case_paths": [ "/nc/304/0585-01" ] }, { "cite": "279 S.E. 2d 894", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1981, "pin_cites": [ { "page": "896", "parenthetical": "intentional acts committed by employees of City covered by policy held by City because City did not expect or intend the acts" } ], "opinion_index": 0 }, { "cite": "52 N.C. App. 688", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 12170704 ], "year": 1981, "pin_cites": [ { "page": "691-92", "parenthetical": "intentional acts committed by employees of City covered by policy held by City because City did not expect or intend the acts" } ], "opinion_index": 0, "case_paths": [ "/nc-app/52/0688-01" ] }, { "cite": "127 S.E. 2d 789", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1962, "pin_cites": [ { "page": "793" } ], "opinion_index": 0 }, { "cite": "258 N.C. 1", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8559261 ], "year": 1962, "pin_cites": [ { "page": "7" } ], "opinion_index": 0, "case_paths": [ "/nc/258/0001-01" ] }, { "cite": "307 S.E. 2d 857", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1983, "pin_cites": [ { "page": "859" } ], "opinion_index": 0 }, { "cite": "64 N.C. App. 587", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8527335 ], "year": 1983, "pin_cites": [ { "page": "589" } ], "opinion_index": 0, "case_paths": [ "/nc-app/64/0587-01" ] }, { "cite": "178 F. 2d 750", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 1162394 ], "weight": 2, "year": 1949, "pin_cites": [ { "page": "752-53", "parenthetical": "emphasis added" } ], "opinion_index": 0, "case_paths": [ "/f2d/178/0750-01" ] }, { "cite": "414 A. 2d 220", "category": "reporters:state_regional", "reporter": "A.2d", "case_ids": [ 11288445, 11288471 ], "weight": 4, "year": 1980, "pin_cites": [ { "page": "226", "parenthetical": "emphasis added" }, { "page": "227", "parenthetical": "emphasis added" } ], "opinion_index": 0, "case_paths": [ "/a2d/414/0220-01", "/a2d/414/0220-02" ] }, { "cite": "152 S.E. 2d 513", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1967, "pin_cites": [ { "page": "517" } ], "opinion_index": 0 }, { "cite": "269 N.C. 358", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8563705 ], "year": 1967, "pin_cites": [ { "page": "361-62" } ], "opinion_index": 0, "case_paths": [ "/nc/269/0358-01" ] }, { "cite": "172 S.E. 2d 518", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1970, "pin_cites": [ { "page": "522" }, { "page": "522" } ], "opinion_index": 0 }, { "cite": "276 N.C. 348", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8561396 ], "weight": 2, "year": 1970, "pin_cites": [ { "page": "354" }, { "page": "354" } ], "opinion_index": 0, "case_paths": [ "/nc/276/0348-01" ] }, { "cite": "269 S.E. 2d 137", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1980, "pin_cites": [ { "page": "140" } ], "opinion_index": 0 }, { "cite": "301 N.C. 68", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8561139 ], "year": 1980, "pin_cites": [ { "page": "72" } ], "opinion_index": 0, "case_paths": [ "/nc/301/0068-01" ] } ], "analysis": { "cardinality": 1056, "char_count": 31898, "ocr_confidence": 0.803, "pagerank": { "raw": 3.2072210195325583e-07, "percentile": 0.8662524340222152 }, "sha256": "3137d1d5faba8e017dae74508de8c2bf19ef32593c9d852d042a4928de99a536", "simhash": "1:52e26b8c16698c6b", "word_count": 5022 }, "last_updated": "2023-07-14T20:36:04.939100+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judges WELLS and BECTON concur." ], "parties": [ "WASTE MANAGEMENT OF CAROLINAS, INC., t/d/b/a TRASH REMOVAL SERVICE, INC. v. PEERLESS INSURANCE COMPANY and PENNSYLVANIA NATIONAL MUTUAL CASUALTY INSURANCE COMPANY" ], "opinions": [ { "text": "ARNOLD, Judge.\nThe primary question presented by this appeal is whether the insurance policies issued by defendants Peerless Insurance Company (Peerless) and Pennsylvania National Mutual Casualty Insurance Company (Penn) oblige them to defend plaintiff, Trash Removal Service (TRS), against certain third party suits brought against it by the owners and operators of the Flemington Landfill. The owners and operators are presently the defendants in a civil action brought by the United States, based on Section 7003 of the Resource Conservation and Recovery Act (RCRA), 42 U.S.C. 6973. This action seeks to hold the owners and operators responsible for contamination of the aquifer underlying the landfill and to halt further contamination of the aquifer. In turn, the owners and operators have brought third party suits seeking indemnification and contribution from TRS and other transporters of waste materials to the landfill. Those suits caused TRS to request assistance from its insurers, Peerless and Penn, which they denied, triggering the present declaratory judgment action.\nBoth insurers, Penn and Peerless, have denied any duty to defend TRS, arising out of the various insurance policies. Penn has asserted an affirmative defense based on the \u201cpollution exclusion\u201d contained in its general liability policy. Both insurers moved for summary judgment, and stipulated for purposes of the motions, that with respect to the policy definition of \u201coccurrence,\u201d \u201cthe insured neither expected nor intended the resulting claimed damage.\u201d TRS also moved for summary judgment. After considering \u201call pleadings and matters of record, and having heard the arguments of counsel,\u201d the trial judge rendered summary judgment for defendants Penn and Peerless.\nIn reviewing an order of summary judgment, we must determine whether there is no genuine issue of material fact and whether judgment was appropriate as a matter of law. Vassey v. Burch, 301 N.C. 68, 72, 269 S.E. 2d 137, 140 (1980). In this case we are concerned with the meaning of language used in the defendants\u2019 policies of insurance. This is a question of law, Trust Co. v. Insurance Co., 276 N.C. 348, 354, 172 S.E. 2d 518, 522 (1970), and if the policy language as applied to the facts shows without contradiction that defendants have no duty to defend, then summary judgment was properly granted.\nIn determining whether there is a duty to defend, the trial court is largely restricted to facts as alleged in the third party complaints. An insurance company has a duty to defend its insured against a suit brought by a third party claimant, even though the suit may be groundless, if in such suit the third party claimant alleged facts which, if true, imposed upon the insured a liability to the claimant within the coverage of the insured\u2019s policy. Fireman\u2019s Fund Insurance Co. v. North Carolina Farm Bureau Mutual Insurance Co., 269 N.C. 358, 361-62, 152 S.E. 2d 513, 517 (1967). The court must then compare the complaint with the policy to see whether the allegations describe facts which appear to fall within the insurance coverage. The trial court generally must avoid going beyond the pleadings to ascertain the facts as they actually are, which determine ultimate liability.\nGiven the plasticity of modern notice pleading, however, the \u201ccomparison test,\u201d is often difficult to apply, especially in cases like the present, where the plaintiff has initiated the action apparently without knowledge of significant facts. This problem of inadequate pleadings does not appear to have been addressed in North Carolina law. Yet, the dominant rule in other jurisdictions is that where the allegations in the complaint are broad, and uncertain as to specific facts, \u201cthe insured has a right to a defense whenever the allegations show a potential that liability will be established within the insurance coverage,\u201d Travelers Indem. Co. v. Dingwell, 414 A. 2d 220, 226 (Me. 1980) (emphasis added), and the complaint contains \u201cno allegation of facts which would necessarily exclude coverage,\u201d Dingwell, 414 A. 2d at 227 (emphasis added). As Chief Judge Learned Hand wrote in the case Lee v. Aetna Casualty & Surety Co., 178 F. 2d 750 (2d Cir. 1949):\nWhether the insurer ought to defend such an action at least until it appears that the claim is not covered by the policy is not free from doubt; but it seems to us that we should resolve the doubt in favor of the insured. . . . When . . . the complaint comprehends an injury which may be within the policy, we hold that the promise to defend includes it.\nLee, 178 F. 2d at 752-53 (emphasis added).\nWe believe that this is the correct rule and that it is consistent with, and, as Chief Judge Hand has implied, is founded upon, a principle of insurance law that runs strong in North Carolina: that doubts or ambiguities should be resolved in favor of the insured, see Trust Co. v. Insurance Co., 276 N.C. 348, 354, 172 S.E. 2d 518, 522 (1970).\nA specific application of this rule is that where a complaint contains multiple theories of recovery, some covered by the policy and others excluded by it, the insurer still has a duty to defend. See Travelers Indem. Co. v. Dingwell, 414 A. 2d 220 (Me. 1980).\nWe now turn to the insurance policies issued to TRS by the defendants in the present suit. From 12 August 1974 through 12 August 1979, Peerless insured plaintiff under a Manufacturers\u2019 and Contractors\u2019 Liability Insurance policy. From 17 June 1979 through 17 June 1980, Penn insured plaintiff under a policy of Comprehensive General Liability Insurance. TRS also obtained automobile liability policies for its trash handling vehicles from the same defendants. From 1973 to 1979, when the Landfill was closed, TRS hauled solid waste materials to the Landfill. The parties apparently have not argued before us the issue of whether the insurance policies were in effect during the time that the critical events allegedly insured against took place. Given the facts as presented in the various complaints, we assume that the policies were in effect, although recognizing that when the merits of the federal action are heard, and after more particular factual determinations are made, the issue of timing may figure in deciding whether the policies in fact covered TRS\u2019s conduct and whether the insurance companies are liable to TRS.\nWe deal first with the Manufacturers\u2019 and Contractors\u2019 Liability Policy and the Comprehensive General Liability Policy, whose pertinent provisions are identical. Both policies provide:\nThe company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of\nCoverage A. bodily injury or\nCoverage B. property damage\nto which this insurance applies, caused by an occurrence, and the company shall have the right and duty to defend any suit against the insured seeking damages on account of such bodily injury or property damage, even if any of the allegations of the suit are groundless, false or fraudulent, and may make such investigation and settlement of any claim or suit as it deems expedient. . . .\nThe insurance companies must therefore defend any suit seeking damages on account of bodily injury or property damage caused by an \u201coccurrence.\u201d \u201cOccurrence\u201d is defined as:\nAn accident, including continuous or repeated exposure to conditions, which results in bodily injury or property damage neither expected nor intended from the standpoint of the insured.\nBoth policies also contain a \u201cpollution exclusion\u201d:\nThis insurance does not apply . . . (f) to bodily injury or property damage arising out of the discharge, dispersal, release or escape of smoke, vapors, soot, fumes, acids, alkalis, toxic chemicals, liquids or gases, waste materials or other irritants, contaminants or pollutants into or upon land, the atmosphere or any water course or body of water; but this exclusion does not apply if such discharge, dispersal, release or escape is sudden and accidental.\nWe deal first with the meaning of \u201coccurrence.\u201d The policies say that an \u201coccurrence\u201d is an \u201caccident\u201d and that the term \u201caccident\u201d includes \u201ccontinuous or repeated exposure to conditions.\u201d The word \u201caccident,\u201d although not defined in the policies, has generally been held by courts to mean \u201cthat which happens by chance or fortuitously, without intention or design, and which is unexpected, unusual, and unforeseen.\u201d City of Wilmington v. Pigott, 64 N.C. App. 587, 589, 307 S.E. 2d 857, 859 (1983), citing 43 Am. Jur. 2d, Insurance, \u00a7 559; Skillman v. Insurance Co., 258 N.C. 1, 7, 127 S.E. 2d 789, 793 (1962).\nThe second half of the policies\u2019 definition of \u201coccurrence\u201d very nearly restates the common law definition of \u201caccident.\u201d Our understanding of the history of the \u201coccurrence\u201d definition in the Comprehensive General Liability model policies is that the latter half of the definition was added to broaden and clarify the meaning of \u201caccident,\u201d which some courts had taken to mean only an event happening suddenly and violently. See 7A Appleman, Insurance Law and Practice \u00a7 4492 (1979). We construe the latter half of the definition as clarifying the meaning of \u201caccident\u201d by stressing that what determines whether an accident has occurred are intent and expectation of bodily injury and property damage, and by adding the idea that whether the event is unexpected or unintended should be determined \u201cfrom the standpoint of the insured.\u201d See Edwards v. Akion, 52 N.C. App. 688, 691-92, 279 S.E. 2d 894, 896 (1981) (intentional acts committed by employees of City covered by policy held by City because City did not expect or intend the acts), aff\u2019d per curiam, 304 N.C. 585, 284 S.E. 2d 518 (1981).\nThus, in view of the \u201ccomparison test\u201d described above and the definition of \u201coccurrence,\u201d the question we must answer on examining the complaints is whether the facts alleged suggest a potential that an accident occurred and do not suggest conclusively that the insured actually foresaw or intended that its activity would result in bodily injury or property damage. We stress that our examination of intent or expectation should be a subjective one, from the standpoint of the insured, and not an objective one asking whether the insured \u201cshould have\u201d expected the resulting damage.\nWe now turn to the pollution exclusion clause. The insurers argue that even if the coverage provisions apply to TRS, coverage was properly denied because of the pollution exclusion clause. The clause says that the insurance does not apply to bodily injury or property damage resulting from discharge of waste materials on land or water unless \u201csuch discharge, dispersal, release or escape is sudden and accidental.\u201d The trial court apparently agreed with the insurers, in particular, Penn, that this exclusion prevents the insurers from having a duty to defend. We disagree.\nConstruction of the polluters exclusion clause appears to be a question of first impression in this state. Overwhelming authority in other jurisdictions suggests that the clause is ambiguous, and that it should be construed consistently with the definition of \u201coccurrence.\u201d See Buckeye Union Ins. Co. v. Liberty Solvents and Chemicals Co., Inc., No. 11598, slip op. (C.A. Ohio July 11, 1984) and Jackson Township Municipal Utilities Authority v. Hartford Accident & Indemnity Co., 186 N.J. Super. 156, 451 A. 2d 990 (1982) and cases cited therein.\nThe exclusion hinges on the words \u201csudden and accidental.\u201d The policies do not define these words, and some courts have observed that this may be enough to create ambiguity in the exclusion. See Buckeye Union Ins. Co. v. Liberty Solvents and Chemicals Co., Inc., No. 11598, slip op. (C.A. Ohio July 11, 1984). Yet, there is further ambiguity in that the pollution exclusion and the definition of occurrence can conflict. The word \u201csudden,\u201d in the pollution exclusion, means happening without previous notice or on very brief notice; unforeseen; unexpected; unprepared for. Webster\u2019s New International Dictionary (2d ed. unabridged 1954); Black\u2019s Law Dictionary (4th ed. 1968). \u201cAccidental\u201d means, as noted above, happening unexpectedly or unintentionally, or by chance. Under the coverage provisions, if an event happens over a period of time, causing bodily injury or property damage unexpected or unintended from the standpoint of the insured, then it is an \u201coccurrence,\u201d and the insurer should defend the insured in the event of suit based on it. Such an occurrence is clearly accidental, if the damage was not expected or intended from the standpoint of the insured. Yet, if the word \u201csudden\u201d means only \u201can instantaneous happening,\u201d then the occurrence which happens over a period of time is subject to exclusion from coverage under the pollution exclusion.\nIn North Carolina, exclusions from coverage under insurance policies are strictly construed. Stanback v. Westchester Fire Ins. Co., 68 N.C. App. 107, 114, 314 S.E. 2d 775, 779 (1984). When a policy defines coverage provisions so as to include a particular activity, but that activity is later excluded by an exclusion, then the policy is ambiguous, and the court is obliged to resolve the apparent conflict between coverage and exclusion in favor of the insured. See id. We find that the word \u201csudden\u201d is reasonably susceptible of differing constructions and we construe it not to mean just \u201cinstantaneous,\u201d but also \u201cunforeseen\u201d or \u201cunexpected.\u201d This construction renders the pollution exclusion consistent with the definition of \u201coccurrence\u201d in the coverage provisions.\nThis construction has been widely accepted in other jurisdictions. As the court in Jackson Township Municipal Utilities Authority v. Hartford Accident & Indemnity Co., 186 N.J. Super. 156, 451 A. 2d 990 (1982), noted: \u201cthe clause can be interpreted as simply a restatement of the definition of \u2018occurrence\u2019 \u2014 that is, that the policy will cover claims where the injury was \u2018neither expected nor intended.\u2019 It is a reaffirmation of the principle that coverage will not be provided for intended results of intentional acts but will be provided for the unintended results of an intentional act.\u201d 451 A. 2d at 994. See also 3 R. Long, The Law of Liability Insurance, App. 30, App. 58 and App. 68 (1936); Molton, Allen and Williams, Inc. v. St. Paul F. & M. Ins., 347 So. 2d 95 (1977); CPS Chemical Co., Inc. v. Continental Ins. Co., No. L039547-81, slip op. at 10-11 (N.J. Super. Aug. 8, 1984).\nThus, in applying the pollution exclusion to the alleged facts, if we find the contamination of the groundwater was \u201csudden and accidental,\u201d i.e., unexpected and unforeseen from the standpoint of the insured, then the pollution exclusion does not preclude the insurers\u2019 duty to defend TRS.\nWe now examine the complaints at issue in this case to determine whether their allegations show a potential for liability within the insurance coverage and whether their allegations establish no set of facts which necessarily excludes coverage. We turn first to the federal Section 7003 complaint, because two of the third party complaints are patterned on it and attempt to pass on liability under it to TRS.\nThe federal complaint alleges that the owners and operators of the Flemington Landfill \u201ccontributed\u201d to the disposal of wastes at the Landfill and to their escape into the groundwater beneath the Landfill. The term \u201ccontributed\u201d comes from RCRA Section 7003. The term embraces both intentional and negligent activity resulting in danger to human health and the environment. See United States v. Price, 523 F. Supp. 1055, 1072-73 (D.N.J. 1981), citing S. Rep. No. 172, 96th Cong. 2d Sess. 5, reprinted in [1980] U.S. Code Cong. & Ad. News 8665, 8669. By using the term \u201ccontributing\u201d in its complaint, the United States seeks to make the owners and operators subject to the injunctive relief available under Section 7003, without having to make specific proof of their intent to contaminate the groundwater or of their negligent activity which caused the contamination of groundwater. The use of the term establishes a potential that the owners and operators were negligent, and does not necessarily mean that they were not negligent.\nBefore going further, we note that our interpretation of the term \u201ccontributing\u201d does not transform this suit into one \u201carising under\u201d federal law. This remains a suit concerned primarily with the construction of an insurance contract, a matter of state law. Our foray into the realm of RCRA common law is merely to show that for the drafters of the federal complaint the meaning of \u201ccontributing\u201d is broad, encompassing both negligent and intentional conduct and excluding neither.\nWe now turn to the third party complaints which use the \u201ccontributing\u201d language in allegations against TRS. Complaints filed by two groups of owners and operators, the New Hanover County Board of Commissioners, et al., and Waste Industries, Inc., and Waste Industries of New Hanover, Inc., allege that TRS hauled solid waste materials to the Flemington Landfill, represented that they were non-hazardous, and \u201ccontributed\u201d to contamination of groundwater in the Flemington area and to the \u201cimminent and substantial endangerment to health and to the environment\u201d there. These two complaints seek contribution and indemnification from TRS if injunctive relief is granted against the owners and operators and if TRS is shown also to have \u201ccontributed\u201d to the alleged contamination.\nWe find that these third party plaintiffs merely seek to pass on liability under RCRA Section 7003 to TRS. They use the term \u201ccontributing\u201d in the same way as the United States did in the federal complaint. The term thus establishes a potential that at trial facts will be found that TRS\u2019s conduct was accidental and does not conclusively show that TRS expected or intended the resulting damage to Flemington groundwater. The fact that TRS intended to carry solid waste materials to the Landfill, which was its business, does not mean that it intended to contaminate the groundwater with toxic chemicals. Thus, construing ambiguities in these complaints and in the policies in favor of TRS, we find that both create a potential that liability within the policy language will be established at trial. If TRS\u2019s waste transport business somehow \u201ccontributed\u201d to groundwater contamination, then this is potentially an \u201coccurrence\u201d and the insurers accordingly have a duty under the general liability policies to defend TRS against these third party complaints.\nWe turn next to the other third party complaint, brought by A. D. Royal et al. This complaint also alleges that TRS hauled solid waste materials to the landfill and represented that they were non-hazardous and non-contaminated, and that TRS \u201ccontributed\u201d to the contamination of the groundwater supply. The Royal complaint, however, alleges in addition that TRS and other haulers were careless and negligent in not preventing solid and hazardous waste materials from being deposited at the landfill. The Royal complaint requests that if the groundwater has been contaminated, then the contributions, acts, omission, and negligence of TRS and other \u201cHaulers\u201d have caused the property of A. D. Royal et al. (the Landfill owners) to be permanently injured and damaged, and A. D. Royal et al. are entitled to \u201cjust and substantial compensation from \u2018Haulers\u2019 [including TRS] under general principles of law and equity,\u201d or in the alternative, an injunction should issue requiring TRS to provide a water supply for the Royal land and to restore the aquifer.\nThe Royal complaint thus alleges a set of facts that comes within the definition of \u201coccurrence\u201d; it suggests that TRS hauled waste materials to the landfill, but that TRS was careless and negligent in not preventing the disposal of waste materials that would contaminate the landfill and the groundwater. The Royal complaint\u2019s use of the theory of negligence and carelessness creates a potential that at trial TRS will be shown to have accidentally disposed toxic chemicals at the landfill, without any intent or expectation that they would contaminate the groundwater and landfill. Again, in determining duty to defend, we have examined the facts alleged to see whether from the standpoint of the insured, TRS, the contamination was unexpected and unintended. We have found no allegation of facts from which it necessarily follows that TRS intended or expected the groundwater contamination. Since our inquiry must be from the standpoint of the insured, we cannot say that because TRS deposited waste materials at the landfill it should have known that toxic chemicals might be contained in the wastes and might seep into the groundwater. The third complaint thus also describes an \u201coccurrence\u201d which triggers the insurers\u2019 duty to defend.\nConstruing the pollution exclusion consistently with the definition of \u201coccurrence,\u201d we find no allegation of facts in the third party complaints which shows that the contamination of the groundwater was not \u201csudden and accidental,\u201d ie., not expected nor intended from the standpoint of the insured. Indeed, the insurers have stipulated that \u201cthe insured [TRS] neither expected nor intended the resulting claimed damage.\u201d The pollution exclusion accordingly does not apply to any of the complaints.\nWe hold that both of the general liability policies as applied to the alleged facts oblige the defendant insurers, Penn and Peerless, to defend TRS in suits commenced by the three third party complaints. As to these policies, the trial judge\u2019s order of summary judgment against TRS is in error and should be reversed.\nWe address one additional issue, which the parties have not raised, but which has arisen in other cases concerning the cleanup of toxic wastes. This is the question of whether the policy language, \u201cthe company shall have the right and duty to defend any suit against the insured seeking damages on account of . . . bodily injury or property damage,\u201d means that the insurer is obliged only to defend when legal, monetary damages are requested, or whether it must also defend when a suit seeks the costs of complying with an injunction. See general discussion in K. Rosenbaum, Insurance, Hazardous Waste and the Courts: Unforeseen Injuries, Unforeseen Law, 13 Envtl. L. Rep. 10204, 10205-06 (1983). This is a particularly important issue in the present case, where the initial suit is a RCRA Section 7003 action, requesting broad injunctive relief, and the third party complaints seek to pass on costs incurred if the injunction is issued.\nWe note initially that the third party complaint filed by Royal et al. seeks not just to pass on clean-up costs by contribution and indemnification, but also seeks common law damages for injury to the Royals\u2019 property. It is not affected by this issue, at least so far as the insurer\u2019s duty to defend goes, because even if only part of the complaint is covered by the policy, the insurer still has to defend. See Travelers Indem. Co. v. Dingwell, 414 A. 2d 220 (Me. 1980).\nThe other two complaints, which allege only that TRS \u201ccontributed\u201d to groundwater contamination and should have to contribute to or indemnify the owners and operators for costs incurred by the injunction, give rise to the damages issue. Since they seek to pass on liability that may arise under the Section 7003 action, we must examine the federal complaint. It seeks a broad injunction, requiring the owners and operators not merely to prevent further harm, but also to clean up the aquifer and to compensate Flemington residents by supplying alternative supplies. This gives the proposed federal injunction a strong remedial aspect, and it means that the owners and operators will have to pay out large sums, for what are essentially compensatory purposes, to comply with the injunction.\nAt this stage, then, we can say that the owners and operators seek to pass on those costs of remedying the present harm. Although called \u201cequitable relief,\u201d these clean-up costs are essentially compensatory damages for injury to common property, the Flemington groundwater. They are thus covered by the general liability policies.\nPlaintiff TRS alleges also that the third party complaints allege facts covered by the automobile liability policies issued by defendants Penn and Peerless. The automobile liability policies provide, in pertinent part, that the insurers will defend any suit against the insured seeking damages on account of bodily injury or property damage caused by \u201can occurrence and arising out of the ownership, maintenance or use, including loading and unloading, for the purposes stated as applicable thereto in the declarations, of an owned automobile or of a temporary substitute automobile.\u201d What is determinative in this case is the \u201carising out of\u201d language. Our review of the facts as alleged convinces us that if TRS is responsible for the discharge of hazardous waste materials at the Flemington Landfill this was due to TRS\u2019s business policies and practices concerning materials handled, rather than to any particular feature of, or malfunction or improper operation of, the Dempsey Dumpsters. We do not find the requisite \u201ccausal connection\u201d between use of the Dumpsters and the injury. Casualty Co. v. Insurance Co., 16 N.C. App. 194, 198-9, 192 S.E. 2d 113, 118 (1972). We affirm the summary judgment agaiast plaintiff TRS as to the automobile insurance policies.\nThe trial judge\u2019s order of summary judgment is reversed as to the policies of Manufacturers\u2019 and Contractors\u2019 Liability Insurance and Comprehensive General Liability Insurance, but is affirmed as to the automobile liability insurance policies.\nReversed in part and affirmed in part.\nJudges WELLS and BECTON concur.", "type": "majority", "author": "ARNOLD, Judge." } ], "attorneys": [ "Burney, Burney, Barefoot, Bain & Crouch, by Auley M. Crouch, III, for plaintiff appellant.", "Young, Moore, Henderson & Alvis, by Walter E. Brock, Jr., for defendant appellee Pennsylvania National Mutual Casualty Insurance Company; and Prickett & Corpening, by Carlton S. Prick-ett, Jr., for defendant appellee Peerless Insurance Company." ], "corrections": "", "head_matter": "WASTE MANAGEMENT OF CAROLINAS, INC., t/d/b/a TRASH REMOVAL SERVICE, INC. v. PEERLESS INSURANCE COMPANY and PENNSYLVANIA NATIONAL MUTUAL CASUALTY INSURANCE COMPANY\nNo. 845SC97\n(Filed 28 December 1984)\n1. Insurance 8 149\u2014 potential liability \u2014 duty to defend\nIn an action to determine whether an insurance company has a duty to defend a claim where the allegations against the insured are broad and uncertain as to specific facts, the insured has a right to a defense whenever the allegations show potential liability within the insurance coverage, and there are no allegations which would necessarily exclude coverage.\n2. Insurance \u00a7 149\u2014 liability for groundwater contamination \u2014 insurers\u2019 duty to defend \u2014ambiguities interpreted in favor of insured\nIn an action to determine whether two insurance companies are obligated to defend a waste collection and transportation service in an action arising from groundwater contamination, summary judgment should not have been granted for the insurance companies where there was a potential that liability within the policy language would be established at trial when ambiguities in the complaint and the policies concerning \u201coccurrences,\u201d pollution exclusions, and \u201ccontributing\u201d to groundwater contamination are resolved in favor of the insured.\n3. Insurance \u00a7 149\u2014 liability for improper waste disposal \u2014 duty to defend \u2014 summary judgment for insurance company improper\nIn an action to determine whether insurance companies had a duty to defend a waste disposal company in an action for groundwater contamination, summary judgment for the insurance companies was not proper where the complaint suggested that the insured was careless and negligent in disposing of the chemicals. There was a potential that the insured could be found to have accidentally disposed of toxic chemicals without any intent or expectation that they would contaminate groundwater and would therefore fall within an \u201coccurrence\u201d under the policy.\n4. Insurance \u00a7 149\u2014 groundwater contamination \u2014 cleanup costs \u2014 covered by general liability insurance\nIn an action arising from groundwater contamination at a landfill in which the complaint sought a broad injunction preventing further harm, requiring that residents be compensated with alternative supplies, and requiring that the aquifer be cleaned up, the cleanup costs were essentially compensatory damages for injury to common property which would be covered by general liability insurance policies.\n5. Insurance \u00a7 100.1\u2014 groundwater contamination \u2014 actions against waste transportation company \u2014 defense not required under automobile policies\nIn an action to determine whether insurance companies must defend an action against a waste collection and transportation company for groundwater contamination at a landfill, the allegations in the complaint against plaintiff did not establish a causal connection sufficient for coverage under automobile insurance policies. Summary judgment was properly granted for defendant insurers.\nAPPEAL by plaintiff from Fountain, Judge. Judgment entered 19 September 1983 in Superior Court, New HANOVER County. Heard in the Court of Appeals 23 October 1984.\nThe plaintiff in this case, Trash Removal Service (TRS), operates a waste collection and transportation service for residential, commercial and industrial customers. From August 1973 to June 1979, it trucked solid waste in \u201cDempsey Dumpsters,\u201d or \u201cDempsters,\u201d to the Flemington Landfill, located in New Hanover County.\nOn 11 January 1980, the Flemington Landfill became the subject of a suit brought by the United States against the owners and operators of the Landfill: United States v. Waste Industries, Inc., et al, 80-4-CIV-7 (E.D.N.C.). The suit was based on Section 7003 of the Resource Conservation and Recovery Act, 42 U.S.C. 6973. The plaintiff United States requested injunctive relief for and reimbursement of costs arising out of groundwater contamination allegedly caused by the Flemington Landfill. The United States alleged that toxic chemicals, including benzene, tetrachloroethylene, trichloroethylene, vinyl chloride and methylene chloride, migrated from the Landfill into the aquifer and have been detected in residential wells at levels sufficient to endanger human health and the environment.\nThe owners and operators of the Landfill have in turn filed third party complaints against TRS, seeking indemnity or contribution in the event they are found liable under Section 7003. Their complaints allege that TRS \u201ccontributed\u201d to the contamination of groundwater in New Hanover County and was \u201ccareless and negligent\u201d in not exercising proper care to prevent the deposit of hazardous chemical wastes when delivering solid wastes.\nFrom 12 August 1974 through 12 August 1979, defendant Peerless Insurance Company (Peerless) insured plaintiff under a Manufacturers\u2019 and Contractors\u2019 Liability Insurance policy. From 17 June 1979 through 17 June 1980, defendant Pennsylvania National Mutual Casualty Insurance Company (Penn) insured plaintiff under a policy of Comprehensive General Liability Insurance. TRS also obtained automobile liability policies for its trash handling vehicles from the same defendants.\nOn receiving the third party complaints against it, TRS tendered coverage to Peerless and Penn. Peerless denied that any coverage was due under its policies, and Penn declined to undertake TRS\u2019s defense and disclaimed any obligation.\nOn 7 June 1982, TRS filed a complaint seeking a declaratory judgment against Peerless and Penn, determining its rights pursuant to both the general liability and the automobile liability policies. Peerless and Penn moved for summary judgment against TRS, which was granted. The trial court also denied TRS\u2019s motion for summary judgment. The trial judge found no just reason to delay our review of its decision, and TRS has accordingly appealed.\nBurney, Burney, Barefoot, Bain & Crouch, by Auley M. Crouch, III, for plaintiff appellant.\nYoung, Moore, Henderson & Alvis, by Walter E. Brock, Jr., for defendant appellee Pennsylvania National Mutual Casualty Insurance Company; and Prickett & Corpening, by Carlton S. Prick-ett, Jr., for defendant appellee Peerless Insurance Company." }, "file_name": "0080-01", "first_page_order": 106, "last_page_order": 120 }