Opinion ID: 2307532
Heading Depth: 1
Heading Rank: 3

Heading: Counterclaim Against State

Text: Liberty contends the court erred in dismissing its counterclaim against the State for enforcement of the State's agreement to pay 50% of the reasonable remediation costs paid by Liberty between November 1987 and December 31, 1990. [] Liberty also contends the court's order requiring Liberty and Continental to split the future costs of remediation conflicted with Liberty's agreement with the State. The statute authorizing state expenditures for petroleum cleanup is clear and unambiguous. The Secretary may authorize such expenditures only for uninsured costs of pollution cleanup. 10 V.S.A. § 1941(b). The agreement with Liberty to expend state funds was plainly premised upon the representation and understanding that Tamarack was uninsured for the 1987 and 1989 releases, an understanding that later proved to be unfounded. Thus, the court correctly concluded that there was no authority for the State's expenditure of cleanup funds in this case, and properly dismissed Liberty's counterclaim. Liberty contends, nevertheless, that Tamarack was somehow uninsured at the time the State authorized the expenditures, and only later became insured when the court ruled that Continental's pollution-exclusion clauses were invalid. The court's judgment did not create the insurance coverage, however, but merely declared the existence of coverage under the policies. See 12 V.S.A. § 4711 (courts have power to declare rights, status and other legal relations), Robtoy v. City of St. Albans, 132 Vt. 503, 504, 321 A.2d 45, 46 (1974) (function of declaratory judgment is to provide declaration of rights, status and other legal relations). The order dismissing Liberty's counterclaim against the State, and the order requiring Liberty and Continental to split the future costs of remediation, were therefore proper.