Court Opinion

ID: 1043753
Source: CourtListenerOpinion
Date Created: 2013-10-08 00:25:55.181649+00
Date Added: 2024-06-11T13:02:19.070788
License: Public Domain

2011 VT 108

Bradford Oil Co. v. Stonington
Insurance Co. and the State of Vermont Agency of Natural Resources (2010-361)
 
2011 VT 108
 
[Filed 09-Sep-2011]
 
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.
 
 

2011 VT 108

 

No. 2010-361

 

Bradford Oil Company, Inc.

Supreme Court

 

 

 

On Appeal from

     v.

Superior Court, Washington
  Unit, 

 

Civil Division

 

 

Stonington Insurance Company

March Term, 2011

 

 

    and
 
State of Vermont Agency of Natural Resources
 
 

 

Geoffrey
  W. Crawford, J.

 

William H. Sorrell, Attorney General, and Nicholas F. Persampieri
and Scot L. Kline, Assistant
  Attorneys General, Montpelier, for
Defendant-Appellant.
 
Bret P. Powell of Powell Orr & Bredice PLC, Williston,
for Defendant-Appellee Stonington
  Insurance Company.
 
 
PRESENT:  Reiber, C.J., Dooley, Johnson, Skoglund and
Burgess, JJ.
 
 
¶ 1.            
DOOLEY, J.  This case considers who should bear
responsibility for the cost of cleaning up petroleum contamination caused by
releases from a gas station’s underground storage tanks.  The controversy
in this appeal is between the State of Vermont, which runs the Vermont
Petroleum Cleanup Fund (VPCF) and Stonington Insurance Co. (Stonington), which
insured Bradford Oil, the owner of the underground storage tanks, for
approximately a three-and-a-half-year period.  The State appeals from the
trial court’s judgment limiting Stonington’s liability to a 4/27 share of past
and future cleanup costs and awarding the State $45,172.05.  On appeal,
the State argues: (1) this Court’s application of time-on-the-risk allocation
in Towns v. Northern Security Insurance Co., 2008 VT 98, 184 Vt. 322,
964 A.2d 1150, does not preclude joint and several liability under all standard
occurrence-based policy language; (2) the circumstances here, including the
reasonable expectations of the insured and the equity and policy
considerations, support imposing joint and several liability on Stonington for
all of the State’s VPCF expenditures; and (3) even if time-on-the-risk
allocation would otherwise be appropriate, Stonington is not entitled to such
allocation because it has failed to show sufficient facts to apply this
allocation method in the present case.  We conclude that Towns does
control here, and we are unconvinced by the State’s reasonable expectations,
equity, and policy arguments to distinguish this recent decision. 
Accordingly, we affirm.  
¶ 2.            
Plaintiff Bradford Oil Company, Inc. (Bradford) owns a Mobil station in
St. Johnsbury that is the site of the petroleum contamination at issue. 
According to the parties’ experts, the contamination may have begun as early as
the 1960s or as late as the end of the 1970s.  The Agency of Natural
Resources (ANR) placed the site on the Vermont Hazardous Waste Sites List when,
in April 1997, petroleum contamination was discovered following the removal of
three underground storage tanks.  In recent years, at the State’s
direction, Bradford has been paying to investigate and clean up the
contamination, and the VPCF has reimbursed most of Bradford’s expenses. 
Bradford initiated this case in 2006 to establish coverage for its cleanup
liability under four commercial general liability policies from
Stonington.  The State cross-claimed seeking
reimbursement to the VPCF from Stonington under the same policies. 
The coverage periods for the policies at issue began on July 18, 1994, and
continued through December 1, 1997. 
¶ 3.            
Initially, Stonington denied that its policies provided any coverage for
the contamination damage on Bradford’s property, but it eventually stipulated
to the existence of coverage, leaving only the allocation of costs and damages
before the trial court.  The allocation question arises because the
coverage periods of Bradford’s Stonington policies cover only a portion of the
total time that contamination was allegedly occurring and that other policies
might have been triggered, if any others existed.[1]
¶ 4.            
Stonington filed a motion for partial summary judgment in October 2009,
asserting that a simple time-on-the-risk allocation method should apply in this
case and that the company should be held liable for damages only in proportion
to the time it assumed the risk of loss.  Under a time-on-the-risk
allocation or “pro-ration by years” method, each triggered policy bears
responsibility for damages in proportion to the time it was “on the risk,”
relative to the total time of triggered coverage.  Towns,
2008 VT 98, ¶ 33 (quotation omitted).  Stonington argued that the
trial court should follow this Court’s decision in Towns, where we held
that a simple time-on-the-risk allocation method was appropriate based on
standard occurrence-based insurance policy language in the context of slowly
occurring environmental contamination.  The Washington Superior Court,
Civil Division, agreed that Towns controls this case.  The court
granted Stonington’s motion for summary judgment as to the method of risk
allocation, but found that it could not determine Stonington’s actual total
liability on summary judgment because the proportion of time for which
Stonington was responsible was still in dispute.  Following summary
judgment, in response to the remaining issues of fact identified by the trial
court, the parties submitted a joint statement of facts not in dispute. 
Based on these undisputed facts and the earlier summary judgment decision, the
trial court issued a judgment in August 2010 decreeing that Stonington’s
liability under its four insurance policies is limited to a 4/27 share of past
and future cleanup costs and awarding the State $45,172.05 from Stonington for
reimbursement of the VPCF expenditures and interest on the expenditures. 
This appeal followed.  
¶ 5.            
This Court reviews a grant of summary judgment de novo, applying the
same standard as the trial court.  Towns, 2008 VT
98, ¶ 8.  We will uphold summary judgment if there are no genuine
issues of material fact and the moving party is entitled to judgment as a
matter of law.  Id.; V.R.C.P. 56(c)(3). 
Likewise, our review of a trial court’s interpretation of an insurance contract
is “plenary, and non-deferential,” because such an interpretation is a question
of law.  Towns, 2008 VT 98, ¶ 8 (quotation
omitted).
¶ 6.            
The central question here is which of the two principal methods of
allocating costs and damages is appropriate given the facts of this case. 
The first allocation method, advocated for by the State, is joint and several liability,[2]
in which “any policy on the risk for any portion of the period in which the insured
sustained property damage . . . is jointly and severally obligated to respond
in full, up to its policy limits, for the loss.” Towns,
2008 VT 98, ¶ 33 (quotation omitted).  Under joint and several liability as argued by the State, Stonington would be liable
for all cleanup costs up to its policy limits, irrespective of when the
contaminant exposure occurred, but would have the right to obtain contribution
from other insurers or the owner for the period in which there is no insurance
based on a time-on-the risk analysis.  The second method, advocated for by
Stonington, and adopted by the trial court, is the time-on-the-risk or
“pro-ration by years” method in which “each triggered policy bears a share of
the total damages proportionate to the number of years it was on the risk,
relative to the total number of years of triggered coverage.”  Id.
(quotation omitted).  Under this method, Stonington is liable for only
4/27, or 15%, of the cleanup costs.
¶ 7.            
Specific policy language limiting coverage affects whether liability
allocation should be joint and several or related to time on the risk. 
“Claims-made” policies generally restrict coverage to claims made during the
policy period “without regard to the timing of the damage or injury.”  Id. ¶ 29 (quotation omitted). 
“Occurrence-based” policies, on the other hand, provide coverage only for
injury or property damage “which occurs during the policy period.”  Id.
¶ 28 (quotation omitted); see also Montrose Chem. Corp. v. Admiral Ins. Co.,
913 P.2d 878, 892 (Cal. 1995) (holding that standard occurrence-based policy
“was intended to provide coverage when damage or injury . . . occurs during the
policy period”).  In cases of contamination from continuing leakage of
hazardous materials, courts have used the “continuous trigger” theory to find
that damage from continuous exposure to contaminants during a policy period is
an “occurrence” sufficient to trigger coverage under an occurrence-based
policy.  See Towns, 2008 VT 98, ¶ 6; see also Montrose, 913
P.2d at 894 (stating that under continuous-trigger test, “injuries and property
damage that are continuous or progressively deteriorating throughout successive
policy periods are covered by all policies in effect during those periods”).
¶ 8.            
The State makes two categories of arguments: (1) Towns should be
narrowed so it doesn’t apply to commercial general liability insurance or to
litigation brought by the State on behalf of the VPCF; and (2) Towns
should not apply on the facts of this case.   Before we get to the
specifics of these arguments, we summarize our decision in Towns.  
Towns involved a property owner who, from 1972 to 1987, diverted waste
and debris from his waste-hauling business to his own private property to use
as fill.  This fill resulted in chemical contamination, which was
described in the case as generally including “an initial ‘burst’ of
constituents lasting several months, followed by a relatively ‘steady state’ of
contamination lasting for as long as the material remains in place.”  Towns, 2008 VT 98, ¶ 32.  The litigation
involved an action filed by the property owner against an insurance company
that had provided him a homeowner’s liability policy covering the property from
November 1983 to June 1987.  The property owner was self-insured from
November 1972 until November 1983.  Id. ¶ 6 n. 2. 
As in the current case, the insurance policy at issue in Towns was an
occurrence-based policy.  Id. ¶ 28. 
We concluded that chemical contamination undoubtedly occurred during the period
when the insurance policy was in effect and that the trial court properly
applied a continuous-trigger test to determine whether an injury-producing
occurrence took place during the policy period.  Id. ¶¶
31-32.  Under the continuous-trigger test, any insurance carrier who
insured the risk during the period from the point the property was first
exposed to the migration of hazardous chemicals into the soil and groundwater
to the point where the migration ceased is liable in some amount.  Id. 
Thus, the “injury is deemed to have ‘occurred’ at each and every point of time
at which there was a contributing contamination.”  R. Bratspies, Splitting
the Baby: Apportioning Environmental Liability Among
Triggered Insurance Policies, 1999 BYU L. Rev. 1215, 1230 (cited in Towns).
¶ 9.            
After determining that there was an occurrence during the period of
coverage by the insurance policy, we turned to how the damages caused by the
contamination would be allocated.  We carefully reviewed numerous
commentators and jurisdictions addressing the proper method of allocating
insurance coverage in such situations.  Id. ¶¶ 34-35.  After
taking into account various policy considerations, we ultimately held that
defense and indemnity costs in Towns were properly allocated between the
property owner and the insurance company based on the percentage of each
party’s time on the risk.  Id. ¶ 38.
 Thus, based on the total period of the exposure of approximately fourteen
and a half years, and the policy period of approximately three and a half
years, the decision allocated approximately 25% of the damages to the insurance
carrier.[3] 
Id. ¶¶ 6, 38.  We concluded that this
method of allocation was the “most consistent with the continuous-trigger rule and
the standard occurrence-based policy provision,” id. ¶ 34, and that the
“time-on-the-risk method offers several policy advantages, including spreading
the risk to the maximum number of carriers, easily identifying each insurer’s
liability through a relatively simple calculation, and reducing the necessity
for subsequent actions between and among the insurers,” id. ¶ 35.  We also held that “where the policyholder is
self-insured for any period of time on the risk . . . it is equally fair and
reasonable to hold the policyholder responsible for that portion of the total
defense and indemnity costs over which he or she chose to assume the
risk.”  Id. ¶ 37.  
¶
10.        
In its first category of arguments, focusing on the idea that Towns
should be narrowed, the State argues that Towns should not apply, and
joint and several liability should apply, because the policy involved here was
a commercial general liability policy for a gasoline station.  Because the
station owner is subject to joint and several liability under 10 V.S.A.
§ 6615(c), and faced the risk of a hazardous waste migration, the State
argues that the owner expects that the policy would impose the same joint and
several liability on the insurer.  There are multiple difficulties with the
State’s argument.  First, Towns is fundamentally based on the
occurence-based language of the policy, and the language is not significantly
different in the policy in this case.   The State correctly notes
that, because an insurer generally prepares insurance policies with little
meaningful input from the insured, this Court construes insurance policy
language in favor of the insured, in accordance with the insured’s reasonable
expectations for coverage.  See Hardwick Recycling & Salvage, Inc.
v. Acadia Ins. Co., 2004 VT 124, ¶ 23, 177 Vt. 421, 869
A.2d 82.  At the same time, however, we “will not deprive the
insurer of unambiguous terms placed in the contract for its benefit.”  Fireman’s
Fund Ins. Co. v. CNA Ins. Co., 2004 VT 93, ¶ 9, 177 Vt. 215, 862 A.2d 251;
see also Vt. Mut. Ins. Co. v. Parsons Hill P’ship, 2010 VT 44, ¶ 28, 188
Vt. 80, 1 A.3d 1016 (reasonable expectations of insured cannot control over
unambiguous policy language).  We give insurance contracts a “practical,
reasonable, and fair interpretation, consonant with the apparent object and
intent of the parties, and strained or forced constructions are to be
avoided.”  McAlister v. Vt. Prop. & Cas. Ins. Guar. Ass’n, 2006 VT 85, ¶ 17, 180 Vt. 203, 908 A.2d 455 (quoting Wendell v.
Union Mut. Fire Ins. Co., 123 Vt. 294, 297, 187 A.2d 331, 333 (1963))
(internal quotation marks omitted).  Bradford’s
Stonington policies unambiguously state that the insurance provided “applies to
‘bodily injury’ and ‘property damage’ only if: (1) The ‘bodily injury’ or
‘property damage’ is caused by an ‘occurrence’ that takes place in the
‘coverage territory’; and (2) The ‘bodily injury’ or ‘property damage’ occurs
during the policy period.”  The only reasonable interpretation of this
policy language is that Stonington was limiting its liability to damages for
occurrences that took place during the policy period. 
¶
11.        
Further, the State has adopted a selective view of the reasonable
expectations of the insured.  As many courts have held, it is unreasonable
to expect that an insurance policy with a specific durational limit will
provide coverage for occurrences outside of that limit.  The Massachusetts
Supreme Judicial Court recently explained:
Further,
we doubt that an objectively reasonable insured reading the relevant policy
language would expect coverage for liability from property damage occurring
outside the policy period.  Read as a whole, neither Century policy
expressly makes or implies a promise to pay one hundred per cent of Boston
Gas’s liability for multi-year pollution damage occurring decades before or
after the policy period.  No reasonable policyholder could have expected
that a single one-year policy would cover all losses caused by toxic industrial
wastes released into the environment over the course of several decades. 
Any reasonable insured purchasing a series of occurrence-based policies would
have understood that each policy covered it only for property damage occurring
during the policy year. 
 
Boston Gas Co. v. Century Indem. Co., 910
N.E.2d 290, 309 (Mass. 2009).   We do not see how
this reasonable expectation is any different for an insured under a homeowner’s
policy than for an insured under a commercial general liability
policy.   In fact, virtually all the significant cases in this area
have involved commercial general liability policies covering businesses with
hazardous waste exposure risk.  See Pub. Serv. Co. v. Wallis & Cos.,
986 P.2d 924, 927-28, 939-40 (Colo. 1999); Boston Gas Co., 910 N.E.2d at
294; EnergyNorth Nat’l Gas, Inc. v. Certain Underwriters at Lloyd’s, 934
A.2d 517, 519, 526 (N.H. 2007); Consol. Edison Co. of N.Y., Inc. v. Allstate
Ins. Co., 774 N.E.2d 687, 695 (N.Y. 2002). 
¶
12.        
Finally on this point, the State’s argument is based on a supposed
equivalence of the insured’s joint and several liability
and that of the insurer.  We used the term “joint and several liability”
to describe the alternative allocation rule in Towns, but this
description only confuses the issue here.  Other courts have used
different descriptions, and one commentator has urged that “[c]ourts . . .
refrain from describing the results they reach as having any relationship to
‘joint and several’ liability when, in fact, no such relationship
exists.”  W. Hickman & M. DeYoung, Allocation of Environmental
Cleanup Liability Between Successive Insurers, 17
N. Ky. L. Rev. 291, 315 (1990).  In fact, the indemnity obligation of
insurance carriers will be determined by contract language and policy limits,
which may have no relationship to the duration of insurance or the amount of
damages.  Thus the contribution of insurers is different from the tort
concept of contribution between joint tortfeasors.  This difference can be
further seen in the fact that even the supposed “joint and several” liability
that the State seeks would allow any insurer that pays the State’s cost to seek
contribution from other insurers, whereas our common law does not recognize a
right of contribution between tortfeasors who are jointly and severally liable,
see Swett v. Haig’s, Inc., 164 Vt. 1, 5, 663 A.2d 930, 931 (1995). 
The equivalence on which the State relies is, at best, a rough similarity that
may or may not apply in the individual case.
¶
13.        
To summarize, the reasonable expectation of the insured, if it controls
at all, is too uncertain for us to rely upon in fashioning an allocation rule
for insurers.  The State’s reasonable expectation arguments do not
persuade us to abandon Towns or to distinguish that decision in this
case.
¶
14.        
The State’s second argument in this category is that the Towns
allocation rule should not apply when the plaintiff is the VPCF and not the
insured.  By statute, the State may recover cleanup costs “to the extent
covered, when there is insurance coverage.”  10 V.S.A.
§ 1941(f).  The statute authorizes the State to “seek
reimbursement in instances where the land is covered by insurance, to the
extent of the coverage.”  Agency of Nat. Res. v. U.S.
Fire Ins. Co., 173 Vt. 302, 307, 796 A.2d 476, 480 (2001). 
Consistent with the use of the term “to the extent covered,” the statute does
not govern how coverage will be determined.  As the trial court held, the
State stands in the shoes of the insured when it sues the insurer. 
Despite that relationship, the State is arguing that it should be able to
recover more from the insurer than the insured can recover.  Towns specifically governs the relationship between
the insured and the insurer.  We see no reason why it should not govern
the insurance coverage available to VPCF.  
¶
15.        
The State makes a number of policy arguments why VPCF should be able to
recover the full policy limits from any insurer irrespective of the duration of
its coverage.  For example, the State argues that early VPCF intervention
limits the total cost of cleanup and reduces the cost for all responsible
parties.  It points out that VPCF is not an insurance company that can
limit its liability.  These arguments presuppose a different statutory
scheme in which insurance coverage and the allocation of responsibility between
insurers and between insurers and the insured(s) is determined specifically by
statute based on the policy concerns the State asserts.  In this case, the
responsibility of a specific insurer is based on its insurance policy with the
insured, and Towns governs that relationship. 
¶
16.        
The State’s third argument falls mainly in its second category of
claims—that Towns should not apply on the facts of this case. 
Specifically, the State argues that a share of the liability can be allocated
to the owner, Bradford, only if it elected to self-insure during that period
and Stonington failed to prove that Bradford did choose to self-insure. 
The State’s argument is premised on its claim that Stonington had the burden of
proof on allocation and that burden included showing the presence and
availability of other insurance and Bradford’s reasons for its actions. 
We cannot accept the State’s argument either as to the burden of proof or as to
the importance of the reasons for Bradford’s actions.
¶
17.        
We acknowledge that we did not comprehensively analyze these issues in Towns
because they were not raised in that case, and the absence of this analysis
enables the State’s argument.  In Towns, we said “where the
policyholder is self-insured for any period of time on the risk,
. . . it is equally fair and reasonable to hold the policyholder
responsible for that portion of the total defense and indemnity costs over
which he or she chose to assume the risk.”  2008 VT 98,
¶ 37.  In fact, there are multiple reasons why the evidence may
show gaps in insurance coverage: (1) the landowner chose not to purchase
insurance; (2) there is insurance, but the carrier is insolvent; (3) there is
insurance, but the landowner cannot locate the policy or identify the insurer;
(4) there is insurance, but the risk is covered by an exclusion; (5) insurance
for the risk involved is unavailable.  See T. Jones & J. Hurwitz, An Introduction to Insurance Allocation Issues in
Multiple-Trigger Cases, 10 Vill. Envtl. L.J. 25, 51 n.115 (1999).  In the aggregate, the period of time
when there is no effective insurance is known as “orphan shares.”  Id. at 51.  In general, courts that have adopted
time-on-the-risk allocation have not deemed relevant why there is no effective
insurance and have allocated orphan shares to the landowner.  See S. Plitt
& J. Rogers, A Proportional Methodology
for Determining Covered Damages Where Continuing and Progressive Injury Is
Involved, 31 Ins. Litig. Rep. 361, 370 n.31 (2009). 
The reason is stated in Spartan Petroleum Co. v. Federated Mutual Insurance
Co., 162 F.3d 805, 812 (4th Cir. 1998), a decision relied upon in Towns:
“To hold otherwise would be to make an insurer liable for damages that occurred
when it was not on the risk.”
¶
18.        
The State has relied upon a line of cases beginning with Owens-Illinois,
Inc. v. United Insurance Co., 650 A.2d 974 (N.J. 1994).  In Owens-Illinois,
the Court adopted an allocation that melded time on the risk with policy limits
and decided that no period would be allocated to the landowner where insurance
was unavailable.  Id. at 995-96. 
Courts following Owens-Illinois have held that an insurer seeking to
allocate a period to the landowner bears the burden of proving that insurance
was available at that time.  See Chem. Leaman Tank Lines, Inc. v. Aetna
Cas. & Sur. Co., 177 F.3d 210, 231 (3d Cir.
1999).   The State, by its argument, has attempted
to limit Towns to any reason for an orphan share other than the
first—intentional self-insurance where insurance extending coverage is
available—and has attempted to place the burden on the insurer to prove that no
other reason for lack of coverage applied.
¶
19.        
We conclude that the reason for the absence of effective insurance is
not determinative.  The rationale for the allocation of orphan shares in Owens-Illinois
may be consistent with its overall allocation methodology, but it is not
consistent with a pure time-on-the-risk methodology.  Moreover, we do not
want to adopt a methodology that rewards inaction, failure to obtain
appropriate coverage, or failure to keep track of insurance policies. 
Also, we note that in this case the State challenged a
pollution exclusion in the Stonington policy and prevailed.  We
cannot assume that pollution exclusion provisions in other policies would be
effective to prevent liability for other carriers.   
¶
20.        
Apart from the substance of the State’s argument, we cannot accept much
of its procedural argument.  The State argues that allocation is an
affirmative defense that Stonington must plead under V.R.C.P. 8(c), and prove
under Pharmacists Mutual Insurance Co. v. Myer, 2010 VT 10, ¶ 14, 187
Vt. 323, 993 A.2d 413.  We do not believe that allocation was an
affirmative defense in this case.  The State brought a cross-claim against
Stonington alleging that it was liable for all cleanup costs.  It
was required to prove this claim.
¶
21.        
Assignment of the burden of proof, particularly in insurance coverage
cases, must often be based on practical considerations.  In State v.
CNA Insurance Cos., 172 Vt. 318, 329-331, 779 A.2d 662, 671-72 (2001), we
assigned to the insurer the burden of proof to show the absence of an
occurrence that would trigger insurance coverage.  The issue was whether
the pollution was intended or expected from the actions of the insured taken
some fifty years earlier.  We held that the insurer was in the better
position to show an intent to harm the environment
rather than imposing the obligation to prove the negative on the insured. 
Id. at 331, 779 A.2d at 672.  As we
explained in Northern Security Insurance Co. v. Stanhope, 2010 VT 92, ¶
10, ___ Vt. ___, 14 A.3d 257, the holding in CNA is intended to avoid
leaving the insured the obligation to prove a negative and to place the burden
on the party with the most incentive and ability to develop the issue. 
The State’s theory of burden allocation in this case would leave Stonington
proving a negative—that Bradford did not intend to self-insure—during periods
without effective insurance, including the absence of policies and the failure
to obtain complete coverage.  While it might have been appropriate to hold
that Stonington must prove that insurance with pollution coverage was available
from some source, as cases in the Owens-Illinois line held, we do not
believe it would be appropriate to make the insurer disprove other reasons why
effective insurance was not present.   
¶ 22.         Finally,
we consider one other argument that the State failed to preserve.  The
State contends that, due to the equities involved here, the policies at issue
should not be construed as occurrence-based policies but, rather, as
essentially claims-made policies.  It argues that, based on prior Vermont
cases, the policies should have included a pollution coverage endorsement
providing coverage on a claims-made basis[4]
and that, since Stonington stipulated to coverage here, the company
“effectively acknowledg[ed] that its insurance policy was not enforceable under
Vermont law.”  We decline to reach the merits of this argument because the
State failed to preserve it in the trial court.  We have consistently held
that matters not raised at the trial court may not be raised for the first time
on appeal.  Progressive Ins. Co. v. Brown ex rel. Brown, 2008 VT
103, ¶ 8, 184 Vt. 388, 966 A.2d 666. 
Preservation requires a party to “present the issue with specificity and
clarity” at the trial court in order to “ensure that the original forum is
given an opportunity to rule on an issue” prior to review by this Court.  Id.
(quotations omitted).  In its statement of undisputed facts, the State did
mention multiple times that the general insurance policy Stonington issued to
Bradford did not contain a pollution endorsement.  However, the State
never made any argument in the trial court about the effect that this absence
might have on the characterization of Stonington’s policy as either
occurrence-based or claims-made.  We conclude that the State’s references
to the pollution endorsement at the trial court were insufficient to properly
preserve the pollution endorsement argument now brought on appeal—the argument
was not brought before the trial court with enough clarity to allow the court
to rule on it.  Because the issue was not properly preserved, we decline
to reach it on appeal.
¶ 23.         In
conclusion, although the State has argued that our decision in Towns can
be distinguished, we conclude that this case fits squarely within the Towns
holding.   In order for the State to prevail, we would have to
overrule much of the Towns holding.  We decline to do so.
Affirmed.
 

 

 

FOR THE COURT:

 

 

 

 

 

 

 

 

 

 

 

John
  A. Dooley, Associate Justice

 

[1] 
The record indicates that two other policies, covering the period between July
18, 1992 and July 18, 1994, have been discovered, but these policies contain
pollution exclusion clauses.

[2]
As discussed infra, ¶ 12, the description “joint and several liability”
is a misnomer when applied to insurance coverage.  See Boston
Gas Co. v. Century Indem. Co., 910 N.E.2d 290, 301 n.24
(Mass. 2009); J. Stempel, Domtar Baby: Misplaced Notions of Equitable
Apportionment Create a Thicket of Potential Unfairness for Insurance
Policyholders, 25 Wm. Mitchell L. Rev. 769, 791 n.98 (1999).

[3] 
The actual allocation was done based on a count of the number of days of the
exposure and the aggregate policy periods.  See Towns,
2008 VT 98, ¶ 6 n.2.

[4] 
Despite the State’s characterization of the pollution coverage endorsement as
providing coverage on a claims-made basis, we note that the endorsement to
which the State refers is actually titled “Commercial General Liability
Coverage Form (Occurrence Version),” and it includes specific occurrence-based
coverage language: “The insurance applies to ‘bodily injury’ and ‘property
damage’ only if:  (1) The ‘bodily injury’ or ‘property damage’ is caused
by an ‘occurrence’ that takes place in the ‘coverage territory’; (2) The
‘bodily injury’ or ‘property damage’ occurs during the policy period.” 
Thus, not only does the endorsement limit coverage to claims “first made
against any insured . . . during the policy period,” but it also appears to
limit coverage by requiring that the claim relate to damage that occurred
during the policy period.