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Endurance American Specialty Insurance Co. v. Dual Trucking And Transport, LLC

United States District Court, D. Montana, Great Falls Division

September 12, 2019

ENDURANCE AMERICAN SPECIALTY INSURANCE COMPANY, Plaintiff,
v.
DUAL TRUCKING AND TRANSPORT, LLC, f/k/a Capital Transportation Logistics, LLC, and DUAL TRUCKING, INC., Defendants.

          ORDER

          Brian Morris United States District Court Judge

         INTRODUCTION

         The Court held a hearing on August 29, 2019, on several motions in this declaratory judgment action brought by Endurance American Specialty Insurance Company (“Endurance”) against defendants Duel Trucking and Transport, LLC (“DTT”), formerly known as Capital Transportation Logistics, LLC (“Capital”), and Dual Trucking, Inc. (“DTI”) (collectively, “Defendants”). (Docs. 71 & 150.)

         The parties informed the Court that they had resolved Defendants' Motion to Quash Deposition Subpoenas (Doc. 123) and that the issue is moot. (Doc. 150.) The Court denied Defendants' Motion for Judgment on the Pleadings (Doc. 113) without prejudice and deferred ruling on Endurance's Motion for Summary Judgment Regarding the Endurance Policy Issued to Capital (Doc. 129). (Doc. 150.) This Order addresses Endurance's Motion for Summary Judgment Regarding the Endurance Policy Issued to DTI (Doc. 134).

         FACTUAL AND PROCEDURAL BACKGROUND

         Defendants are involved in two underlying Montana state court proceedings in the Fifteenth Judicial District Court, Roosevelt County. (Doc. 71 at 2.) The state court proceedings arise out of claims for contamination and property damage. Defendants allegedly contaminated property leased from Wagner and Garth Harmon (“the Harmons”) by storing, treating, and disposing of wastes and toxic materials generated by off-site oil and gas fracking operations. (Doc. 136 at 2.)

         DTT remains the only defendant in State of Montana Department of Environmental Quality v. DTT, Cause No. DV-14-67, 15th Judicial District Court for Roosevelt County, MT (“MDEQ Suit”). (Doc. 136-1.) In the MDEQ Suit, the Montana Department of Environmental Quality (“MDEQ”) alleges that DTT violated state law regarding waste storage and disposal and that these violations resulted in contamination. (Id. at 4, 8.) DTI and DTT are both defendants, along with others, in Garth L. Harmon and Wagner Harmon v. DTI, et al., No. DV-15-15, 15th Judicial District Court for Roosevelt County, MT (“Harmon Suit”). (Doc. 136-2.) The Harmon Suit alleges various causes of action for property damage, including claims based on breach of contract, negligence, trespass, and nuisance. (Id. at 23, 30, 32, 33.)

         Endurance issued two contractors pollution liability policies to the Defendants in 2011. (Docs. 137-1 & 137-2.) Defendants tendered the MDEQ Suit and the Harmon Suit to Endurance in June 2016. (Doc. 136 at 3.) Endurance agreed to defend both actions pursuant to a full reservation of rights. (Id.)

         Capital Policy:

         Endurance issued the first policy to Capital (“Capital Policy”) on May 23, 2011. (Doc. 137-1 at 1.) The Capital Policy listed Capital as the named insured and set a policy period of May 23, 2011, to May 23, 2012. (Id.) The Capital Policy covered damages resulting from pollution conditions first incurred during the policy period. (Id. at 6.) Endurance canceled the Capital Policy at Capital's request on October 1, 2011. (Id. at 44.) This cancellation request terminated the policy period. (Id.)

         The parties appear to agree that, at the time of the motions hearing on August 29, 2019, neither the MDEQ Suit, nor the Harmon Suit, name Capital as a defendant. The parties also seem to agree that neither suit alleges wrongful conduct that occurred within the Capital Policy's policy period of May 23, 2011, to October 1, 2011. Endurance nevertheless sought a summary judgment ruling on Endurance's obligations under the Capital Policy because the Defendants tendered the MDEQ Suit and the Harmon Suit to Endurance under the Capital Policy. The Court demes it prudent to defer any ruling on Endurance's summary judgment motion regarding the Capital Policy until further factual developments clarify the potential for any claims for coverage arising under the policy. (Doc. 150.)

         DTI Policy:

         Endurance issued the second policy to DTI (“DTI Policy”) on September 30, 2011. (Doc. 137-2.) The DTI Policy listed DTI as the named insured and set a policy period of September 30, 2011, to October 1, 2012. (Id. at 1.) Similar to the Capital Policy, the DTI Policy covered damages resulting from pollution conditions first incurred during the policy period. (Id. at 6.) Endurance added a named insured endorsement to the DTI Policy, effective January 13, 2012. (Id. at 42.) The endorsement added DTT and Dual Trucking of Montana, LLC (DTM) as named insureds on the DTI Policy. (Id. at 42.)

         The DTI Policy covered DTI, DTT, and DTM for “property damage” for which they became legally obligated to pay as the result of “a pollution condition at any site where any insured . . . is performing, or has performed, any contracting or remediation operations anywhere in the world . . . [if] the pollution condition first incurred during the policy period . . . .” (Doc. 137-2 at 6.) The policy defined the term “pollution condition” as follows:

[T]he discharge, dispersal, release or escape of smoke, vapors, fumes, acids, alkalis, toxic chemicals, liquids or gases, waste materials or other irritants, contaminants or pollutants into or upon land, the atmosphere or any watercourse or body of water which results in bodily injury or property damage. A continuous, related, repeated, or similar series of discharges, dispersals, releases, or escapes of pollutants at or from a site shall constitute a single pollution condition. Related pollution conditions are those pollution ...

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