Title Northern Insurance Company of New York v. Aardvark Associates, Inc.
Date 1991
By Alito
Subject Misc
Contents
Page 1
226 of 238 DOCUMENTS
NORTHERN INSURANCE COMPANY OF NEW YORK, Appellee v. AARDVARK ASSOCIATES, INC. and INSURANCE COMPANY OF NORTH AMERICA, Aardvark Associates, Inc., Appellants
No. 90-3687
UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT
942 F.2d 189; 1991 U.S. App. LEXIS 17897; 34 ERC (BNA) 1039; 21 ELR 21350
June 12, 1991, Argued
August 8, 1991, Filed
PRIOR HISTORY: **1 On Appeal from the United States District Court for the Western District of Pennsylvania; D.C. Civil No. 86-00108--E.
DISPOSITION:
Affirmed.
CASE SUMMARY:
PROCEDURAL POSTURE: Appellant waste hauler sought review of a decision of the United States District Court for the Western District of Pennsylvania, which granted summary judgment to appellee insurers with re- gard to the interpretation of pollution coverage in ap- pellees' general liability policy issued to appellant.
OVERVIEW: Appellant waste hauler was notified by the Environmental Protection Agency that it was a "poten- tially responsible party" with regard to response costs for long-term pollution at two sites in Pennsylvania, in accor- dance with the Comprehensive Environmental Resource, Compensation and Liability Act, 42 U.S.C.S. § 9607(a). Appellant sought coverage from appellee insurers, who disclaimed coverage, because any pollution was not "sud- den and accidental." The lower court granted summary judgment to the insurers, finding that the pollution clauses in the policies issued to appellant were plain and unam- biguous and appellees were entitled to summary judg- ment. On appeal, the court affirmed the lower court's grant of summary judgment to appellees, finding that the clauses in appellant's polices were clear, and that the ex- ception for "sudden and accidental" discharges applied only to discharges that were abrupt and lasted a short time.
OUTCOME: The court affirmed the grant of summary judgment in favor of appellee insurers against appellant
waste hauler. The court found that the lower court properly interpreted the pollution exclusion clauses in appellant's policies and summary judgment was properly granted based on these clauses.
LexisNexis(R) Headnotes
Civil Procedure > Appeals > Standards of Review > De
Novo Review
Insurance Law > Claims & Contracts > Policy
Interpretation
HN1 The standard of review with respect to a district court's interpretation of insurance policies is plenary. Civil Procedure > State & Federal Interrelationships > Application of State Law
HN2 In a diversity case, a court will apply state sub- stantive law.
Insurance Law > Claims & Contracts > Policy
Interpretation > Plain Language
Insurance Law > Property Insurance > Pollution
Exclusions
HN3 To a read "sudden and accidental" exception to a pollution damage exclusion in an insurance policy to mean only unexpected and unintended is to rewrite the policy by excluding one important pollution coverage re- quirement - abruptness of the pollution discharge. The very use of the words "sudden and accidental" reveal a clear intent to define the words differently, stating two separate requirements. Reading "sudden" in its context, i.e. joined by the word "and" to the word "accident," the inescapable conclusion is that "sudden," even if including the concept of unexpectedness, also adds an additional el- ement because "unexpectedness" is already expressed by
"accident." This additional element is the temporal mean- ing of sudden, i.e. abruptness or brevity. To define sudden as meaning only unexpected or unintended, and there- fore as a mere restatement of accidental, would render the
942 F.2d 189, *; 1991 U.S. App. LEXIS 17897, **1;
34 ERC (BNA) 1039; 21 ELR 21350
Page 2
suddenness requirement mere surplusage.
Civil Procedure > State & Federal Interrelationships > Application of State Law
HN4 Although a court is not bound in a diversity case to follow decisions of a state intermediate appellate court, such decisions are not to be disregarded by a federal court unless it is convinced by other persuasive data that the highest court of the state would decide otherwise. Insurance Law > Claims & Contracts > Policy Interpretation > Usual & Ordinary Meaning
Insurance Law > Claims & Contracts > Policy
Interpretation > Plain Language
HN5 Under Pennsylvania law, when language in an in- surance policy is clear and unambiguous, a court must give effect to that language.
Civil Procedure > Summary Judgment > Summary
Judgment Standard
HN6 Fed. R. Civ. P. 56(c) mandates the entry of sum- mary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.
Civil Procedure > Appeals > Standards of Review > De
Novo Review
HN7 A court's standard of review with respect to sum- mary judgment is plenary.
Torts > Insurance Claims > Insurers Bad Faith Insurance Law > Claims & Contracts > Declaratory Relief
HN8 Under Pennsylvania law, the duty to defend is a distinct obligation, separate and apart from the insurer's duty to provide coverage.
COUNSEL:
Stephen G. Weil, Esq. (Argued), Joseph D. Tydings (Argued), Anderson, Kill, Olick & Oshinsky, Washington, District of Columbia, E. Max Weiss, Esq., Culbertson, Weiss, Schetroma & Schug, Meadville, Pennsylvania, Attorneys for Appellant.
Thomas W. Brunner, Esq. (Argued), Wiley, Rein
& Fielding, Washington, District of Columbia, Richard M. Shusterman, Esq. (Argued), White and Williams, Philadelphia, Pennsylvania, Louis C. Long, Esq., Meyer, Darragh, Buckler, Bebenek, Eck & Hall, Pittsburgh, Pennsylvania, Attorneys for Appellee.
Roger E. Warin, Esq. (Argued), Steptoe & Johnson, Washington, District of Columbia, Amicus Curiae, Insurance Environmental Litigation Association.
JUDGES:
Nygaard and Alito, Circuit Judges, and Fullam, District Judge. *
* Hon. John P. Fullam, Senior Judge of the United States District Court for the Eastern District of Pennsylvania, sitting by designation.
OPINIONBY:
ALITO
OPINION:
*190 OPINION OF THE COURT ALITO, Circuit Judge:
The district court granted summary judgment in fa- vor of two insurance companies and against Aardvark Associates, Inc., a hauler of industrial waste from whom the United States Environmental Protection Agency **2 is seeking to recover costs for cleaning up waste disposal sites. Applying Pennsylvania law, the district court held that long-term pollution at the sites was not covered un- der Aardvark's general liability policies due to a standard clause excluding coverage for any discharge of pollution that is not "sudden and accidental." 743 F. Supp. 379
(W.D.Pa.). We will affirm. I.
Aardvark engages in the business of hauling indus- trial waste from production sites to disposal sites. In 1977 and 1978, Aardvark transported drums of industrial waste from Hughson Chemicals in Seagertown, Pennsylvania, to the Old Mill and New Lyme disposal sites in Ashtabula County, Ohio. Environmental officials discovered dis- charges of hazardous materials at these sites in 1981 and
1982.
In 1983, the EPA notified Aardvark of its find- ings at the Old Mill site and informed the company that it had been identified as a "potentially responsible party" liable for response costs under the Comprehensive Environmental Resource, Compensation and Liability Act ("CERCLA"), 42 U.S.C. § 9607(a). The EPA sent a similar notice regarding the New Lyme site in 1985. In
1989, the EPA filed two separate suits in the Northern District of Ohio seeking to recover **3 costs from Aardvark and other parties pursuant to 42 U.S.C. §
9607(a).
*191 After receiving the initial letters from the EPA, Aardvark notified the Insurance Company of North America ("INA"), which had issued Aardvark general lia- bility insurance policies from 1977 to 1981, and Northern
942 F.2d 189, *191; 1991 U.S. App. LEXIS 17897, **3;
34 ERC (BNA) 1039; 21 ELR 21350
Page 3
Insurance Company of New York ("Northern"), which had issued Aardvark similar policies from 1981 to 1985. All of these policies contained a standard clause that gener- ally excluded coverage for pollution damage. The clause, however, contained an exception to the exclusion "if the discharge, dispersal, release or escape" of pollutants was
"sudden and accidental." n1
n1 Specifically, the policies provided that they did not apply:
To bodily injury or property damage arising out of the discharge, disper- sal, release or escape of smoke, va- pors, soot, fumes, acids, alkalis, toxic chemicals, liquid or gasses, waste ma- terials or other irritants, contaminants or pollutants into or upon land, the at- mosphere or any water course or body of water; but this exclusion does not apply if such discharge, dispersal, re- lease or escape is sudden and acciden- tal.
**4
After investigation, Northern commenced suit against Aardvark and INA in 1986 in the United States District Court for the Western District of Pennsylvania, seeking a declaratory judgment that it was not obligated to provide a defense against or indemnification for the CERCLA claims. Federal jurisdiction was based on diversity of citizenship. INA cross-claimed against Aardvark for a declaratory judgment that it was under no obligation to provide a defense or indemnification. Aardvark filed counterclaims, requesting a declaratory judgment that Northern was obligated to provide a defense and indem- nification, as well as other relief.
After all parties moved for summary judgment, the district court granted summary judgment for Northern and INA. Relying primarily on two decisions of the Superior Court of Pennsylvania -- Techalloy Co., Inc. v. Reliance Insurance Co., 338 Pa. Super. 1, 487 A.2d 820 (1984), allocatur denied, 338 E.D. Allocatur Dkt. 1985 (Pa. Oct.
31, 1985), and Lower Paxon Township v. United States
Fidelity & Guaranty Co., 383 Pa. Super. 558, 557 A.2d
393 (1989), allocatur denied, 93 M. D. Allocatur Dkt.
**5 1989 (Pa. Sept. 22, 1989) -- the district court held that the pollution exclusion clause's exception for "sudden and accidental" discharges was limited to discharges that are "'both sudden, meaning abrupt and lasting only a short time, and accidental, meaning unexpected.'" App. 9, quot-
ing Lower Paxon, 557 A.2d at 399. The court also rejected Aardvark's contention that the pollution exclusion clause applied only to "active" as opposed to "passive" polluters. Applying this interpretation of the pollution exclusion clause, the court held that Aardvark lacked coverage for the CERCLA claims. The court noted that Aardvark bore the burden of establishing that these claims fell within the exception for "sudden and accidental" discharges and that nothing in the summary judgment record showed that the discharges at the two disposal sites had been of that nature. Instead, the court observed, the materials in the record suggested that "the pollution at issue . . . ha d been gradual, stretching over several years and many separate shipments of waste." App. 6. Aardvark appealed.
II.
A. We turn first to the meaning of the standard pol- lution exclusion clause's exception **6 for discharges that are "sudden and accidental." n2 The insurance com- panies contend that the phrase "sudden and accidental" is unambiguous and was properly construed by the district court. Aardvark argues that the phrase is ambiguous and is not limited to discharges that are abrupt but includes discharges that are unintended and unexpected.
n2 HN1 The standard of review with respect to the district court's interpretation of the insurance policies is plenary. Patterson v. American Bosch Corp., 914 F.2d 384, 387 (3d Cir. 1990).
These are not new arguments. As Aardvark notes in its brief, disagreement between insureds and insurers con- cerning the meaning of this provision has precipitated "a legal war . . . in state and federal courts from Maine to California." Appellant's Br. at 6. We recently surveyed the resulting jurisprudence and noted that "the authority
*192 appears to be evenly divided between the par- ties' competing constructions of the pollution exclusion clause, with about half of the cases holding **7 that the clause bars coverage, and with the other half holding that it does not." New Castle County v. Hartford Accident and Indemnity Co., 933 F.2d 1162, 1195 (3d Cir. 1991). Cogent arguments have been advanced on both sides of this question.
HN2 Because this is a diversity case, we must of course apply state substantive law, in this instance the law of Pennsylvania. The Supreme Court of Pennsylvania has not addressed the question before us, but the Superior Court has twice done so. In Techalloy Co., Inc., a gen- eral liability insurer refused to defend a personal injury action against an industrial generator of toxic waste. The insurer relied on the standard pollution exclusion clause's exception for "sudden and accidental" discharges. After
942 F.2d 189, *192; 1991 U.S. App. LEXIS 17897, **7;
34 ERC (BNA) 1039; 21 ELR 21350
Page 4
the Court of Common Pleas held that the insured lacked coverage, the Superior Court affirmed based on the pol- lution exclusion clause. The Superior Court held that the clause was not ambiguous. 338 Pa. Super. at 13, 487 A.2d at 827. In accordance with well-established Pennsylvania precedent, n3 the court applied the plain meaning of the pollution exclusion clause and ruled that **8 the in- sured's lengthy history of toxic discharges on a "regular or sporadic" basis could not be viewed as "sudden." 338
Pa. Super. at 13-14, 487 A.2d at 827. The Supreme Court of Pennsylvania denied review. 338 E.D. Allocatur Dkt.
1985 (Pa. Oct. 31, 1985).
n3 Pennsylvania courts have consistently ap- plied the "plain meaning" doctrine to clearly worded policy exclusions. See Standard Venetian Blind Co. v. American Empire Ins. Co., 503 Pa.
300, 307, 469 A.2d 563 (1983) (enforcing policy's business risk exclusion); McCabe v. Old Republic Ins. Co., 425 Pa. 221, 223-4, 228 A.2d 901, 903
(1967) (validating provision excluding coverage of liability arising out of injury or death to an em- ployee within the scope of employment).
The Superior Court discussed the same issue at greater length in Lower Paxon Township, in which the court held that a township's insurance policy containing the same standard pollution exclusion clause did not cover claims based on the **9 release of methane gas from a municipal landfill. Like Aardvark here, the township argued that the phrase "sudden and accidental" is am- biguous and should be construed to mean unexpected or unintended. 383 Pa. Super. at 568, 557 A.2d at 398. Reaffirming Techalloy Co., Inc., the Superior Court re- jected this argument. The court stated that the phrase was "'clear and plain, something only a lawyer's ingenu- ity could make ambiguous.'" Id. 557 A.2d at 402, quoting American Motorists Insurance Co. v. General Host Corp.,
667 F. Supp. 1423 (D. Kan. 1987). The court wrote that
"any other interpretation of the policy is blatantly unrea- sonable" and that "acceptance of the township's argu- ments would result in the emasculation of the policy in violation of our duty to enforce it." 383 Pa. Super. at 577,
557 A.2d at 402. Rejecting "lengthy argument and doc- umentary materials concerning the drafting history and regulatory approval" of the pollution exclusion clause ( id. 557 A.2d at 402 n. 5), the court adhered to what it found to be the plain meaning of the clause, explaining
(383 Pa. Super. at 577, 557 A.2d at 402 **10 (emphasis in original)):
HN3 To read "sudden and accidental" to mean only unexpected and unintended is to rewrite the policy by excluding one impor-
tant pollution coverage requirement - abrupt- ness of the pollution discharge. The very use of the words "sudden and accidental" (em- phasis added) reveal a clear intent to define the words differently, stating two separate re- quirements. Reading "sudden" in its context, i.e. joined by the word "and" to the word "ac- cident", the inescapable conclusion is that
"sudden", even if including the concept of unexpectedness, also adds an additional el- ement because "unexpectedness" is already expressed by "accident". This additional el- ement is the temporal meaning of sudden, i.e. abruptness or brevity. To define sudden as meaning only unexpected or unintended, and therefore as a mere restatement of acci- dental, would render the suddenness require- ment mere surplusage.
*193 Lower Paxon, 383 Pa. Super. at 577, 557
A.2d at 402 (emphasis in original). Once again, the Supreme Court of Pennsylvania denied review. 93 M.D. Allocatur Dkt. 1989 (Pa. Sept. 22, 1989). Numerous district court decisions applying Pennsylvania law have followed **11 Techalloy Co., Inc. and Lower Paxon Township. See Federal Insurance Company v. Susquehanna Broadcasting Co., 727 F. Supp. 169 (M.D. Pa. 1989), modified, 738 F. Supp. 896 (M.D. Pa. 1990), aff'd, 928 F.2d 1131 (3d Cir. 1991); Scarcia v. Maryland Casualty Co., No. 87-6691, 1988 U.S. Dist. LEXIS 12946
(E.D. Pa. Nov. 17, 1988); United States Fidelity & Guar. Co. v. Korman Corp., 693 F. Supp. 253 (E.D. Pa. 1988); Centennial Ins. Co. v. Lumbermens Mut. Casualty Co.,
677 F. Supp. 342 (E.D. Pa. 1987); American Mut. Liab. Ins. Co. v. Neville Chemical Co., 650 F. Supp. 929 (W.D. Pa. 1987); Fischer & Porter Co. v. Liberty Mut. Ins. Co.,
656 F. Supp. 132, 140 (E.D. Pa. 1986). See also Cooper
Indus., Inc. v. Aetna Casualty & Sur. Co., No. 374 C.D.
1985 (Pa. Ct. C.P. Dec. 7, 1990).
HN4 Although we are not bound in a diversity case to follow decisions of a state intermediate appellate court, we are instructed that such decisions are "not to be disre- garded by a federal court unless it is convinced by other persuasive data that **12 the highest court of the state would decide otherwise." West v. American Telephone & Telegraph Co., 311 U.S. 223, 237, 85 L. Ed. 139, 61 S. Ct. 179 (1940). See also Commissioner v. Estate of Bosch,
387 U.S. 456, 465, 87 S. Ct. 1776, 18 L. Ed. 2d 886 (1967); Commercial Union Ins. Co. v. Bituminous Casualty Co.,
851 F.2d 98, 100 (3d Cir. 1988); Wisniewski v. Johns- Manville Corp., 759 F.2d 271, 273-74 (3d Cir. 1985). Applying this teaching here, we follow the decisions of
942 F.2d 189, *193; 1991 U.S. App. LEXIS 17897, **12;
34 ERC (BNA) 1039; 21 ELR 21350
Page 5
the Superior Court.
The decisions of the Superior Court on the ques- tion before us are grounded on established principles of Pennsylvania law regarding the interpretation of in- surance contracts. The decisions are well-reasoned and are supported by a substantial body of precedent from many other jurisdictions. Whether or not we would reach the same conclusion if we were exercising common law jurisdiction, we cannot say that the Supreme Court of Pennsylvania would reach a conclusion different from that of the Superior Court if it confronted the issue before us.
Aardvark understandably relies on our recent de- cision in New Castle County, in which we predicted that the Delaware Supreme Court would accept **13 Aardvark's reading of the pollution exclusion clause. That prediction, however, cannot control our decision here. In predicting what the Supreme Court of Pennsylvania would do, we cannot logically assign greater weight to a predicted decision by the Delaware Supreme Court than to the decisions of the highest courts of other states that have reached a contrary result. n4 See New Castle County,
933 F.2d at 1195 n. 60 (collecting cases). In New Castle County, without any specific guidance in Delaware case law, we predicted what the highest court of that state would do. Here, with strong guidance in decisions of the Superior Court of Pennsylvania, we feel constrained to reach a different conclusion. We therefore hold, in accordance with the decisions of the Superior Court of Pennsylvania, that the exception for "sudden and acciden- tal" discharges applies only to discharges that are abrupt and last a short time. We reject Aardvark's argument that this phrase, under Pennsylvania law, includes other dis- charges *194 that are unintended and unexpected.
n4 Moreover, it is not clear that Delaware and Pennsylvania courts take the same approach in de- termining whether a provision in an insurance con- tract is ambiguous. Compare New Castle County,
933 F.2d at 1196 ("under Delaware law, a court
'must consider the context and circumstances sur- rounding the meaning of what otherwise appears to be clear and unambiguous language'") with Gene
& Harvey Builders v. Pennsylvania Manufacturers
Association Insurance Co., 512 Pa. 420, 517 A.2d
910, 913 (1986) (where the policy language itself is unambiguous, a court must give effect to the lan- guage). See also, e.g., Standard Venetian Blind Co. v. American Empire Ins. Co., 503 Pa. 300, 305,
469 A.2d 563, 566 (1983); Guardian Life Ins. Co. v. Zerance, 505 Pa. 345, 353, 479 A.2d 949, 953
(1984); Adelman v. State Farm Mut. Auto. Ins. Co.,
255 Pa. Super. 116, 123, 386 A.2d 535, 538 (1978).
**14
B. We also reject Aardvark's argument that the pol- lution exclusion clause applies only to "active" polluters, i.e., those who "actually release pollutants" (Appellant's Br. at 9), and not "passive" polluters. HN5 Under Pennsylvania law, when language in an insurance pol- icy is clear and unambiguous, a court must give effect to that language. Gene & Harvey Builders, 512 Pa. at
426, 517 A.2d at 913 citing, Pennsylvania Manufacturers' Ass'n Ins. Co. v. Aetna Cas. & Sur. Ins. Co., 426 Pa. 453,
233 A.2d 548 (1987); Standard Venetian Blind Co., 503
Pa. at 305, 469 A.2d at 566. As previously noted, the clause in question excludes coverage for bodily injury or property damage "arising out of the discharge, disper- sal, release or escape" of pollutants, subject to the ex- ception for "sudden and accidental" discharges discussed above. We have scrutinized this language for any hint that it is limited to "active" polluters or those who "actu- ally release pollutants," but we find no ambiguity and no support for Aardvark's argument. The clause unambigu- ously withholds coverage for injury or damage "arising
**15 out of the discharge, dispersal, release or escape" of pollutants (emphasis added), not merely the insured's discharge, dispersal, release or escape "of pollutants." As the district court aptly wrote in Federal Insurance Co. v. Susquehanna Broadcasting Co., 727 F. Supp. at 177, the "exclusion clause makes no reference at all to active polluters or passive polluters. The terms are foreign to the policies in question." See also Powers Chemco, Inc. v. Federal Insurance Co., 74 N.Y.2d 910, 548 N.E.2d 1301,
549 N.Y.S.2d 650 (1989).
Aardvark relies on one case decided under Pennsylvania law ( Covington Township v. Pacific Employers Insurance Co., 639 F. Supp. 793 (M.D. Pa.
1986)), but that case is distinguishable. There, the court considered claims against a township for negligently mon- itoring the water supply and issuing sewage permits. The court held (639 F. Supp. at 799) that the language of the standard pollution exclusion clause concerning damage
"arising out of" the discharge of pollutants did not unam- biguously apply to claims based upon negligence in the performance of "public entity **16 duties." In reaching this conclusion, the Covington court did not adopt a dis- tinction between "active" and "passive" polluters. Here, Aardvark has no "public entity duties," and the claims against it are based squarely on the discharge of pollu- tants. Thus Covington Township, whether or not correct, is inapposite.
III.
Having addressed the meaning of the pollution ex- clusion clause and its exception, we turn to the ques-
942 F.2d 189, *194; 1991 U.S. App. LEXIS 17897, **16;
34 ERC (BNA) 1039; 21 ELR 21350
Page 6
tion whether summary judgment for the insurers was proper. n5 HN6 Rule 56(c) of the Federal Rules of Civil Procedure "mandates the entry of summary judgment, af- ter adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 91
L. Ed. 2d 265, 106 S. Ct. 2548 (1986). Accordingly, we must determine which party bore the burden of persua- sion under Pennsylvania law on the question whether the CERCLA claims were based on "sudden and accidental" occurrences.
n5 HN7 Our standard of review with respect to summary judgment is plenary. Waldorf v. Shuta,
896 F.2d 723, 728 (3d Cir. 1990).
The structure of the standard pollution exclusion clause has an important bearing on this issue. As pre- viously **17 noted, the clause generally excludes cov- erage for injury or damage arising from pollution, but this exclusion contains an exception for "sudden and ac- cidental" discharges. An insurer usually bears the burden of proving an exception to coverage (see 19 G. Crouch, Crouch on Insurance 2d § 79:315 at 255 (M. Rhodes rev. ed. 1983)), but "the courts are split on the question whether the *195 insurer or the insured has the burden of proving an exception to an exclusion." Fireman's Fund Insurance Companies v. Ex-Cell--O-Corp., 702 F. Supp.
1317, 1328 (E.D. Mich. 1988); see also G. Crouch, supra,
§ 79:385 at 338. Compare New Castle County, 933 F.2d at
1181-82 (under Delaware law, insurer has burden) with
Fischer & Porter Co. v. Liberty Mutual Insurance Co.,
656 F. Supp. at 140 (under Pennsylvania law, insured has burden) and Fireman's Fund Insurance Companies, 702 F. Supp. at 1328 (under Michigan law, insured has burden).
**18
We must predict how the Supreme Court of Pennsylvania would decide this question in light of the conflicting authority. For the same reasons al- ready discussed, we predict that the Supreme Court of Pennsylvania would follow the Superior Court's deci- sions. In Lower Paxon Township, 383 Pa. Super. at 571,
557 A.2d at 393, the Superior Court wrote that Techalloy Co., Inc. "strongly suggests" that the insured bore the burden of proving that a discharge was sudden and acci- dental. The Lower Paxon court accordingly held ( id. 557
A.2d at 403) that the insured in that case bore the "burden of proving that there was an abrupt discharge, dispersal, release or escape of methane gas." Even if we would not reach the same conclusion were we sitting as a court of common law, we must acknowledge that there are sound
reasons for this allocation of the burden of persuasion. See Fireman's Fund Insurance Companies, 702 F. Supp. at 1328. Finding no persuasive evidence that the Supreme Court of Pennsylvania would reach a different result, we conclude that the insured bears the burden of persuasion on this question under Pennsylvania law.
Applying these rules **19 to the present case, we agree with the district court that summary judgment was proper. There is of course no dispute that the CERCLA claims were based on pollution and thus fell within the policies' general exclusion. In order to avoid summary judgment, Aardvark was thus required to show -- that is, to "point out to the district court" ( Celotex Corp., 477
U.S. at 325) -- facts that if proven at trial would establish that the CERCLA claims were based on "sudden and ac- cidental" discharges. Aardvark failed to make this show- ing. On the contrary, as the district court observed, there was abundant evidence in the summary judgment record showing that the discharges occurred over extended peri- ods. App. 6. Thus Aardvark failed to make the showing needed to resist the insurers' motion for summary judg- ment on the issue of coverage.
We likewise hold that the insurers were entitled to summary judgment with respect to their duty to provide a defense. HN8 Under Pennsylvania law, "the duty to defend is a distinct obligation, separate and apart from the insurer's duty to provide coverage." Erie Insurance Exchange v. Transamerica Insurance, 516 Pa. 574, 533
A.2d 1363 (1987). **20 "If the complaint filed against the insured avers facts which would support a recovery that is covered by the policy, it is the duty of the insurer to defend until such time as the claim is confined to a recovery that the policy does not cover." Id. See also, e.g., Pacific Indemnity Co. v. Linn, 766 F.2d 754, 760 (3d Cir.
1985); Gene's Restaurant v. Nationwide Insurance Co.,
519 Pa. 306, 548 A.2d 246, 247 (1988); Youngman v. CNA Insurance Co., 401 Pa. Super. 381, 585 A.2d 511,
514 (1991).
In the present case, the EPA's complaints regarding the Old Mill and New Lyme sites do not "aver facts which would support" a finding that discharges of pollutants at those sites were "sudden and accidental." On the contrary, both the complaints and related administrative allegations clearly portray a process of pollution occurring over a pe- riod of years. For example, the Old Mill complaint alleged that inspectors had "noted approximately 1200 industrial waste drums in various stages of deterioration" and that
"analysis of soil, drum and water samples . . . indicated that hazardous drum contents were leaking onto the soil and had contaminated surface and **21 ground water." App. 449. Similarly, the New Lyme complaint alleged that the site had been used for *196 industrial and commer-
942 F.2d 189, *196; 1991 U.S. App. LEXIS 17897, **21;
34 ERC (BNA) 1039; 21 ELR 21350
Page 7
cial waste disposal for more than a decade. App. 429. The EPA's Remedial Action Master Plan for the site stated that many different types of environmental violations had occurred at the site and had "continued throughout the operation of the landfill." App. 487. The Plan stated (id.) that "requests . . . for elimination of the violations . . . were issued during the entire period of operation." Thus, the EPA's allegations plainly referred to long-term pollution, not "sudden and accidental" events.
Moreover, even if it were appropriate to look beyond the allegations of the EPA complaints, it is apparent that the insurers properly concluded after initial investigation
that they had no duty to defend. As previously noted, Aardvark has not identified any facts that if proven would show that the discharges at the two sites were "sudden and accidental," and the summary judgment record is replete with contrary evidence.
IV.
In summary, we hold that, under Pennsylvania law, the district court properly interpreted the pollution exclusion clauses in Aardvark's policies **22 and that the district court properly granted summary judgment in favor of the insurers based on these clauses. We will therefore affirm the district court's decision.
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