Opinion ID: 1588942
Heading Depth: 1
Heading Rank: 6

Heading: Cross-Appeal by ESLIC

Text: a. Murphy Oil. ESLIC contends in its cross-appeal that because of this court's decision in Murphy I , there could be no potential for indemnity in Blakely II and Blakely III. [5] We disagree. We have already held in this opinion that Murphy I does not control this issue and that the possibility for indemnity coverage by ESLIC exists with regard to the facts alleged in Blakely III, and, thus, the duty to defend is triggered. Moreover, in Blakely II, Murphy Oil prevailed, and so the question of indemnity coverage was not at issue. On the duty to defend, the circuit court ruled in Blakely II that ESLIC had that duty, and no effort was taken by ESLIC to appeal that ruling. It is simply too late to appeal that issue in connection with the circuit court's order in Blakely III, which, as has already been stated in this opinion, involved different parties and different facts. Costs incurred by ESLIC in each case in defending Murphy Oil were appropriate. We affirm the circuit court on this facet of the cross-appeal. b. USF & G. ESLIC further contends that regardless of whether USF & G has exhausted its primary coverage for the three spill years, one of which was 1970, it has not done so for the other years in which it insured Murphy Oil. According to ESLIC, the Blakely II and Blakely III complaints precipitated USF & G's duty to defend for those additional years in which additional spills may have occurred; thus, it has an obligation to reimburse ESLIC in the amount of $113,432.42 for defense costs paid in connection with Blakely II. ESLIC also prays that this court remand the case with instructions to the circuit court to allocate the costs required to defend Murphy Oil in Blakely III between USF & G and ESLIC. [6] We see no reason to reverse the circuit court on this point in connection with either Blakely II or Blakely III. USF & G paid the policy limits for 1970 for the 1970 spill, at which time ESLIC had umbrella coverage, and also paid the policy limits for the spills in 1975 and 1982. Saddling USF & G with a duty to defend for additional, unspecified spills in unnamed years would require this court to enter the realm of gross conjecture and speculation. It is further notable that neither USF & G nor ESLIC maintains that it had any exposure for those years when the contaminant was allegedly migrating as opposed to its initial release. The only conceivable exposure could be for a sudden event such as the 1970 spill, and USF & G exhausted its coverage for that occurrence. Under these facts, there is no additional duty to defend on the part of USF & G. We affirm the circuit court on this point as well. Direct Appeal reversed and remanded. Cross-Appeal affirmed. GLAZE and CORBIN, JJ., not participating. Special Justice CHARLES A. BANKS joins. Special Justice W.H. SONNY DILLAHUNTY joins.