Title: Agency of Natural Resources v. Glens Fall Insurance Co.
Citation: 169 Vt. 426, 736 A.2d 768
Docket Number: 
State: Vermont
Issuer: Vermont Supreme Court
Date: June 25, 1999

Agency of Natural Resources v. Glens Fall Insurance Co. Annotate this Case Agency of Natural Resources v. Glens Fall Insurance Co. (98-073); 169 Vt. 426; 736 A.2d 768[Opinion Filed 25-Jun-1999] [Motion for Reargument Denied 2-Aug-1999] NOTICE: This opinion is subject to motions for reargument under V.R.A.P. 40 as well as formal revision before publication in the Vermont Reports. Readers are requested to notify the Reporter of Decisions, Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of any errors in order that corrections may be made before this opinion goes to press. No. 98-073Agency of Natural Resources, Supreme Court State of Vermont On Appeal from v. Washington Superior CourtGlens Falls Insurance Co., Continental November Term, 1998 Insurance Co., Liberty Mutual Insurance Co. and Tamarack Services of South BurlingtonAlan W. Cheever, J. William H. Sorrell, Attorney General, and William Griffin, Chief Assistant Attorney General, Montpelier, for Plaintiff-Appellee. William F. Ellis and Kevin J. Coyle of McNeil, Leddy & Sheehan, Burlington, for Defendants- Appellees Glens Falls Insurance Co. and Continental Insurance Co. Michael B. Clapp, Burlington, for Defendant-Appellant Liberty Mutual Insurance Co.PRESENT: Dooley, Morse, and Johnson, JJ., Norton, Supr. J., Specially Assigned, and Gibson, J.(Ret.), Specially Assigned. JOHNSON, J. This case concerns a dispute among the parties and their insurers over the allocation of costs for the cleanup of a series of gasoline leaks. The superior court ruled that Liberty Mutual Insurance Company (Liberty) was responsible for approximately 92% of the costs, that the Continental/Glens Falls Insurance Company (Continental) was responsible for the balance, and that Liberty's counter-claim against the State of Vermont for contribution was without merit. Liberty appeals, contending the court erred in: (1) dismissing its counter-claim against the State; (2) making certain findings concerning the amount of petroleum released and the allocation of remediation costs among the parties; (3) ordering a set-off against Liberty's restitution award from Continental; and (4) declining to award prejudgment interest. Continental has cross-appealed, contending the court erred in rejecting its defenses of waiver, unclean hands, and laches against Liberty's cross-claim for restitution. We reverse and remand on the issue of prejudgment interest, and otherwise affirm. FACTS As found by the trial court, the facts were as follows. In 1983, gasoline began to leak from underground storage tanks at Spillane's Service Center on Route 7 in Shelburne, a site owned by Tamarack Services of South Burlington. The leak was discovered in 1985, and shortly thereafter the State ordered corrective action. The volume of the release was large. Free-product gasoline spread thoughout the site and migrated to adjacent properties. Liberty, Tamarack's insurer at the time of the leak, was notified of the release and accepted responsibility for payment of the costs of remediation. Tamarack hired Ground Water Technologies, Inc. (GTI) to monitor contamination levels and perform the cleanup. Liberty's policy expired in August 1986, at which time Continental became the insurer. Continental's policy, which was renewed in 1987 and 1988, contained several pollution exclusion endorsements. Liberty continued to pay the costs of remediation through this period. In November 1987, GTI discovered a second release of gasoline at the site consisting of several leaking fuel lines. These were repaired by January 1988. During the summer of 1989, more leaks occurred. The parties presented a variety of expert evidence and opinion at trial relating to the rate, duration, and overall volume of the three releases. The court found that the initial release, which Continental's expert had characterized as "massive," consisted of 11,000 gallons. The court found that the second and third releases, which were much smaller and were discovered relatively quickly through GTI's previously installed monitoring equipment, each consisted of 450 gallons. Tamarack made no claims under its policies with Continental at the time of the second and third releases, believing that the pollution exclusion clauses precluded coverage. Liberty received actual notice of the third release no later than September 1989, and continued to pay remediation costs until 1990, when it requested that GTI provide an estimate of the remediation