Opinion ID: 1711055
Heading Depth: 1
Heading Rank: 2

Heading: facts

Text: American Bumper and Manufacturing Company, doing business as American Anodco, Inc., cleans, brightens, anodizes, [1] and seals aluminum parts for the automotive industry. From 1962 until 1987, Anodco discharged wastewater used in its manufacturing process into a large seepage lagoon at its Ionia facility pursuant to a Department of Natural Resources groundwater discharge permit, termed an order of determination. This wastewater included large amounts of clean water along with rinse water containing phosphoric acid, sulfuric acid, nitric acid, nickel acetate, and trace amounts of certain metals, including aluminum and iron. In the 1970s, the DNR began scrutinizing Anodco's Ionia site because it was concerned that certain chemicals in the lagoon might have been in excess of water quality standards. These early concerns did not result in any DNR action. [2] In the 1980s, as part of the renewal process for the groundwater discharge permit, the DNR requested that Anodco conduct various testing and hydrogeological studies to determine whether operation of the seepage lagoon resulted in measurable contamination of groundwater near the lagoon. Williams & Works, the environmental consultants hired by Anodco, conducted a hydrogeological study and issued a report in November 1982, that concluded that [m]ost of the chemical constituents in groundwater near the lagoons do not differ significantly from expected background levels or safe drinking water limits. Because the DNR wanted additional studies, Anodco hired another consulting firm, Keck Consulting Services, Inc. Keck performed the additional studies requested by the DNR and provided a report supplementing the William & Works report. The Keck report also concluded that most chemicals in the groundwater, with the exception of phosphates, [3] were at background levels. In spite of the studies' findings that there was no significant contamination, in approximately June 1986, while its application for renewal of its groundwater discharge permit was pending, Anodco learned that its Ionia site was proposed by the Environmental Protection Agency for inclusion on the national priorities list of contaminated sites in the United States under the CERCLA. [4] In response, Anodco abandoned its efforts to renew its order of determination and gave notice to its various general liability insurers demanding that they assume Anodco's defense against any EPA claims. In early 1987, Anodco transferred its wastewater discharge to the newly constructed Ionia city sewer system and stopped using its seepage lagoon. It then removed and disposed of the sludge that had accumulated on the bottom of the lagoon. According to Anodco, this was not done because anything in the sludge was hazardous, but because its consultants advised that it would be less costly to dispose of the sludge than to perform the tests on the sludge that would be required by the EPA if the site was added to the national priorities list. In June 1987, the EPA formally charged Anodco as a potentially responsible party (PRP) under the CERCLA in a letter demanding that Anodco perform a remedial investigation/ feasibility study (RI/FS). On September 30, 1987, with the advice of counsel, Anodco entered into a consent order with the EPA to perform the RI/FS at the site. Plaintiff states that the purpose of the RI/FS was to confirm existing sampling data that had shown no contamination. Anodco hired a third consultant, E.C. Jordan Company, to perform the RI/FS. Sampling done in 1988 as part of the RI/FS confirmed the earlier studies; there was no groundwater contamination at the site requiring remediation. Jordan's report recommended that the EPA adopt a no action determination for the site. In spite of this recommendation, the EPA and the DNR demanded additional testing because of concern about arsenic and volatile organic compounds (VOCs) that had been present in trace amounts in earlier samples. [5] Further groundwater testing showed arsenic in trace quantities, well below the safety levels and confirmed the absence of arsenic or VOCs contamination. Finally, in September 1993, the EPA issued a no action record of decision for the site. Meanwhile, in 1992, Anodco's various general liability insurers, all of whom are defendants here, filed motions for summary disposition, claiming that they had no duty to defend or indemnify Anodco in relation to the EPA claim. Anodco also filed a motion for partial summary disposition against two of its insurers that had agreed to assume at least a portion of defense costs. [6] The circuit court granted summary disposition for all the defendants on various grounds and denied Anodco's motion for partial summary disposition. [7] Anodco appealed the summary disposition orders in favor of defendants. After consolidating the appeals, the Court of Appeals reversed the decision of the circuit court, finding that the various insurers may owe a duty to defend because they had failed to clearly establish the absence of an occurrence under their respective policies until Anodco's defense already had been completed. The Court remanded for determination of which of the several defendants would owe a duty to defend. 207 Mich.App. 60, 523 N.W.2d 841 (1994). Defendants appealed in this Court. We now affirm.