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1
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OPINION
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EXTRACTED KEY WORDS
VILLAGE DAMAGE DISCHARGE DEFENDANT POLLUTION EXCLUSION DEFEND INSURANCE COVERAGE RAW SEWAGE PERSONAL INJURIES PROPERTY DAMAGE UNDERLYING COMPLAINTS INSURER SEWER SYSTEM POLLUTION EXCLUSION CLAUSES MUNICIPAL SEWER CONTAMINATING NY2D INSURANCE POLICIES CONTAMINATING NATURE CEDARHURST RESPONDENT ENVIRONMENTAL LITIGATION ASSOCIATION DISCLAIMED COVERAGE CONTINENTAL CAS APPELLATE DIVISION ALLEGATIONS DEFENDANT CONTENDS PROPERLY DISCLAIMED COVERAGE |
CEDARHURST, RESPONDENT, v. HANOVER INS. CO., APPELLANT.
(Index No. 01884/93)
CEDARHURST, RESPONDENT, v. HANOVER INS. CO., APPELLANT.
(Index No. 024795/93)
89 N.Y.2d 293, 675 N.E.2d 822, 653 N.Y.S.2d 68 (1996).
December 18, 1996
2 No. 247, 248 (1996 N.Y. Int. 236)
Decided December 18, 1996
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This opinion is uncorrected and subject to revision before publication
in the New York Reports.
Nos. 247 , & 248:
Roy A. Mura, for Appellant.
Stanley M. Gewanter, for Respondent.
Insurance Environmental Litigation Association; New York State
Conference of Mayors and Municipal Officials, amici curiae.
SMITH, J.:
The issue in these appeals is whether defendant insurer is required to
defend and indemnify its insured, the Incorporated Village of
Cedarhurst, in two separate actions brought against the Village for
property damage and personal injuries allegedly caused by a discharge
or overflow of raw sewage from the municipal sewer system. Defendant
contends that it properly disclaimed coverage in both cases pursuant
to the pollution exclusions in the insurance policies. We conclude
that since the complaints in the lawsuits brought against the Village
did not allege any pollution-related injuries, the pollution
exclusions do not relieve the insurer of its obligation to defend the
Village under the policies. Since evidence of pollution-related
injuries may develop at trial and absolve the insurer of its duty to
indemnify under the pollution exclusions, the issue of indemnification
must abide developments. Accordingly, we modify the order of the
Appellate Division in each case.
In 1992, the Village was sued by three of its residents for personal
injuries and property damage allegedly caused by a "rush of water and
sewage" from the municipal sewage system which caused "massive
flooding" of their basement. In a separate action commenced in 1993,
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