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Casella Waste Systems, Inc. v. Steadfast Insurance Co.

Superior Court of Massachusetts, Suffolk

September 7, 2017

Casella Waste Systems, Inc. et al. [1]
Steadfast Insurance Company

          Filed September 8, 2017


          Edward P. Leibensperger, Justice

         This is an insurance coverage dispute between a company engaged in the landfill business and its insurer. The insurer, defendant Steadfast Insurance Company, issued a policy called Z Choice Pollution Liability (the " Policy" ) to plaintiff, Casella Waste Systems, Inc., naming Casella and its subsidiary, Southbridge Recycling & Disposal Park, Inc. (" SRDP" ), as insureds. The Policy covers claims made against the insureds during the Policy period of April 30, 2015 to June 15, 2016. Following notification by Casella in October 2015 to the Massachusetts Department of Environmental Protection (" DEP" ) of the detection of pollution flowing from Casella's property to neighboring property, a claim by DEP, as defined in the Policy, arose. Casella sought insurance coverage for the claim. Steadfast denied coverage. Casella sued for breach of contract, violation of G.L.c. 93A and for a declaration of coverage. Steadfast now moves for a summary judgment declaring there is no coverage under the Policy. For the reasons described below, summary judgment must be denied because there are material issues of fact that are genuinely in dispute.


         The following facts are taken from the parties' Statement of Undisputed Material Facts and Responses Thereto (" SUMF" ), supplemented by documents and affidavits in the summary judgment record.

         The coverage at issue under the Policy is what was provided under Coverage C: Cleanup Costs--New Pollution Event. Under Coverage C, Steadfast is obligated to pay " cleanup costs" to the extent resulting from a " new pollution event" that migrates beyond the boundaries of a " covered location" if that " new pollution event" is first " discovered" during the policy period. The obligation to pay includes " cleanup costs" that the insured is legally obligated to pay resulting from a third-party " claim." The Policy also contains an exclusion from coverage for a " known pollution event." The words in quotes are defined terms in the Policy.

         Casella seeks to be reimbursed and indemnified by Steadfast for all past and future cleanup costs incurred on account of a claim by DEP. There is no dispute that (i) Casella incurred cleanup costs, as defined, (ii) arising from migration of pollution from a covered property, as defined, and (iii) Casella received and reported to Steadfast a claim, as defined, coming from DEP. The dispute between the parties that is the crux of this lawsuit is whether the DEP claim resulted from a " new pollution event" that first commenced in the Policy period and was not known by Casella prior to the commencement of the Policy.

         The DEP claim concerns a landfill in the Town of Southbridge, Massachusetts operated by plaintiff/insured SRDP. Beginning in 2002, the landfill began an annual residential well monitoring program under which residents within 1/2 mile of a portion of the landfill could request testing of their potable wells. On October 23, 2015, Casella, by its consultant, gave notice to DEP that SRDP's well testing in September 2015 had detected certain contaminants above applicable standards in the wells of three residences. The three residences were along a road called H. Foote Road and the addresses were 65, 74 and 81 H. Foote Road. Of the three residences, it was only at 65 where two contaminants--trichloroethene (" TCE" ) and 1,1-dichloroethene (" DCE" ) were detected in the well water at concentrations greater than the Massachusetts Maximum Contaminant Level (" MMCL" ). In fact, the detection of TCE and DCE at 65 H. Foote Road was nearly double the applicable MMCLs. This was the first time since the well testing program had begun that TCE and DCE were detected at concentrations above the MMCLs in any residential well that participated in the program. The residence at 65 H. Foote Road had not participated in the well testing program until December 2014, and its drinking water was not tested until September 24, 2015.

         The notice to DEP also referenced that another contaminant, 1,4 dioxane (" Dioxane" ), was detected in the well water of all three residence at 65, 74 and 81 H. Foote Road. The concentration levels were all above the Massachusetts Drinking Water Guideline. Also, TCE and DCE were found in the water of 81 H. Foote Road at levels below MMCL.

         Prior to the September 2015 detection of TCE and DCE at levels above MMCL at 65 H. Foote Road, there had been detections, as part of the well testing program, of TCE and DCE below MMCL, as well as detections above reportable conditions of Dioxane in the drinking water supply of some of the residences on H. Foote Road. None of these detections, however, caused Casella to be assigned a release tracking number under the 21-E Program or to be designated as a potentially responsible party. No claim was asserted by DEP and no remedial action was required because of these earlier detections.

         As a result of the notice to DEP in October 2015, the DEP for the first time assigned a Release Tracking Number pursuant to its 21-E Program and identified SRDP as a potentially responsible party for cleanup costs. Casella prepared, as required by DEP, an Immediate Response Action Plan which was subsequently approved by DEP. In March 2017, Casella reached an agreement in principle with the Town of Southbridge, the Town of Charlton and the DEP to resolve the DEP claim. The agreement in principle was later finalized by way of an Administrative Consent Order in May 2017, providing, among other things, for the sharing of costs between DEP and SRDP of up to $10 million to install a municipal waterline in the Town of Charlton. Casella became legally obligated to pay cleanup costs and take other remedial action. Casella incurred more than $2.5 million in cleanup costs in connection with the DEP claim and expects to incur additional costs.

         On December 15, 2015, Casella provided notice to Steadfast of an occurrence or claim by attaching a letter from Casella's consultant to DEP. By letter dated April 8, 2016, Casella notified Steadfast of the DEP claim. Steadfast denied coverage for the DEP claim, by letter dated April 27, 2016, based on the " known pollution event" exclusion. This lawsuit followed.


          A claim cannot be resolved on a motion for summary judgment where " a reasonable jury could return a verdict for the nonmoving party." Dennis v. Kaskel, 79 Mass.App.Ct. 736, 741, 950 N.E.2d 68 (2011), quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). For this reason, in evaluating the motion for summary judgment the court " must . . . draw all reasonable inferences" from the evidence presented " in favor of the nonmoving party," as a jury would be free to do at trial. Godfrey v. Globe Newspaper Co., Inc., 457 Mass. 113, 119, 928 N.E.2d 327 (2010). A request for summary judgment must be denied where a claim turns on disputed issues of fact or on disputed inferences from admitted facts. See Molly A. v. Commissioner of Dept. of Mental Retardation, 69 Mass.App.Ct. 267, 284, 867 N.E.2d 350 (2007) (" summary judgment cannot be granted if the evidence properly before the motion judge reveals a genuine issue of ...

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