EnergyNorth Natural Gas, Inc. v. Continental Insurance

781 A.2d 969, 146 N.H. 156, 31 Envtl. L. Rep. (Envtl. Law Inst.) 20503, 2001 N.H. LEXIS 49
CourtSupreme Court of New Hampshire
DecidedMarch 21, 2001
DocketNo. 98-735
StatusPublished
Cited by23 cases

This text of 781 A.2d 969 (EnergyNorth Natural Gas, Inc. v. Continental Insurance) is published on Counsel Stack Legal Research, covering Supreme Court of New Hampshire primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
EnergyNorth Natural Gas, Inc. v. Continental Insurance, 781 A.2d 969, 146 N.H. 156, 31 Envtl. L. Rep. (Envtl. Law Inst.) 20503, 2001 N.H. LEXIS 49 (N.H. 2001).

Opinion

HORTON, J.,

retired, specially assigned under RSA 490:3. The plaintiff, EnergyNorth Natural Gas, Inc. (hereinafter referred to, collectively with its predecessors in interest, as ENGI), appeals an order of the Superior Court {Lynn, J.) granting summary judgment to the defendant, The Continental Insurance Company (hereinafter referred to, collectively with its predecessor in interest, as Continental), and denying ENGI’s cross-motion for summary judgment in this insurance coverage case. We affirm.

The trial court’s order recited the following facts, none of which are disputed by the parties on appeal. ENGI operated a manufactured gas plant (MGP) in Concord from approximately 1852 to 1952. The production of gas at the Concord MGP generated byproducts such as tar, phenol, anthracene, benzene, napthalene, toluene and xylene, some of which meet the definitions of “hazardous waste” or “hazardous substance” under State and federal law. See RSA 147-B:2, VII (1996 & Supp. 2000); 42 U.S.C. § 9601(14) (1995). While some byproducts were recovered for resale, the remainder were either stored on-site in a “relief holder” or released into a sewer [158]*158line that emptied into an area near the Merrimack River known as the “Tar Pond.”

In September 1992, the New Hampshire Department of Environmental Services (NHDES) directed ENGI to conduct a site investigation to determine whether waste from the Concord MGP had contaminated the Tar Pond. In October 1996, NHDES ordered ENGI to undertake remedial measures at the Tar Pond site (the site). ENGI has spent over $3.5 million on investigation and remediation at the site and anticipates expending more in the future.

Continental insured ENGI from at least 1965 through 1985 under a number of comprehensive general liability insurance policies. The policies issued prior to 1967 were “accident-based” policies, which required Continental “[t]o pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of injury to or destruction of property, including the loss of use thereof, caused by accident.”

The policies issued after 1967 were “occurrence-based” policies. They provided that “[t]he company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of . . . property damage to which this insurance applies, caused by an occurrence.” Prior to 1973, the occurrence-based policies defined “occurrence” to mean “an accident, including injurious exposure to conditions, which results, during the policy period, in bodily injury or property damage neither expected nor intended from the standpoint of the insured.” (Emphasis omitted.) In 1973, the definition was changed slightly to provide that “‘occurrence’ means an accident, including continuous or repeated exposure to conditions, which results in bodily injury or property damage neither expected nor intended from the standpoint of the insured.” (Emphasis omitted.) The trial court noted, and the parties do not dispute on appeal, that “since an ‘occurrence’ is defined in terms of an ‘accident’ . . . , it is apparent that to obtain coverage under either the accident-based or the occurrence-based policies injury must have been caused by an accident.”

ENGI brought this declaratory judgment action to obtain coverage for the costs of cleaning up the site. Ruling on cross-motions for summary judgment, the trial court ruled that “none of the policies in question was triggered because the contamination was not accidental,” and accordingly granted summary judgment in favor of Continental.

On appeal, ENGI argues that the trial court erred in: (1) failing to find that the term “accident” is ambiguous and should therefore [159]*159be construed in ENGI’s favor; (2) impermissibly expanding the inherently injurious analysis developed in Vermont Mutual Insurance Co. v. Malcolm, 128 N.H. 521 (1986); (3) failing to consider, in conducting the inherently injurious analysis, what was in the mind of the insured; and (4) granting summary judgment when there were material facts in dispute.

We review the trial court’s interpretation of the policies, including its conclusion as to whether a policy term is or is not ambiguous, de novo. See Hudson v. Farm Family Mut. Ins. Co., 142 N.H. 144, 147 (1997). We generally construe an insurance policy as we do any other contract. See id. at 146. Where an insurance policy’s language is ambiguous, however, and one reasonable interpretation favors coverage, we construe the policy in the insured’s favor, and against the insurer. See id. “We will not, however, force an ambiguity simply to resolve it against an insurer.” Brouillard v. Prudential Prop. & Cas. Ins. Co., 141 N.H. 710, 712 (1997) (quotation omitted).

ENGI first argues that the trial court erred in not finding the term “accident” ambiguous and construing it in favor of coverage. Had the trial court done so, ENGI argues, it would have been unnecessary to conduct an inherently injurious analysis because coverage would already have been found. ENGI contends that High Country Assocs. v. New Hampshire Insurance Co., 139 N.H. 39 (1994), established that the term “accident” is ambiguous under the circumstances presented here. In High Country, we recognized a reasonable disagreement as to whether the term “accident” as used in the policy at issue required a sudden event. Id. at 43-44. ENGI argues that the term is similarly ambiguous in this case because the damage occurred gradually and “the temporal meaning of ‘accident’ is unclear.” ENGI also contends that because no inherently injurious analysis was performed in High Country, that analysis is inappropriate whenever the term “accident” is found, as a threshold matter, to be ambiguous.

ENGI’s argument misconstrues our rules on construction of ambiguous policy terms. Coverage is not mandated whenever a term in the abstract admits of more than one meaning. Policy language is ambiguous where “the language of the policy reasonably may be interpreted more than one way and one interpretation favors coverage.” Id. at 41. Once such an ambiguity is established, the court will apply the reasonable interpretation that favors coverage. See Trombly v. Blue Cross/Blue Shield, 120 N.H. 764, 771 (1980).

[160]*160Thus, even if ENGI were correct that the “temporal meaning” of the term “accident” is ambiguous, we would do no more than give the term an interpretation that, in the temporal context, favors ENGI. We have already given the term such an interpretation in High Country, where we construed “accident” “to mean circumstances, not necessarily a sudden and identifiable event, that were unexpected or unintended from the standpoint of the insured.” High Country, 139 N.H. at 44. That construction does not, however, require us to ignore other requirements implicit in the term and find coverage in any event. We note that the trial court did interpret the term “accident” to cover gradual damage, a holding not challenged on appeal.

We also point out that an inherently injurious analysis was not at issue in High Country, presumably because there was no intentional act that could reasonably have been construed to be inherently injurious. High Country involved damage caused by the insured’s negligent construction of condominium units. See High Country, 139 N.H. at 41.

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Bluebook (online)
781 A.2d 969, 146 N.H. 156, 31 Envtl. L. Rep. (Envtl. Law Inst.) 20503, 2001 N.H. LEXIS 49, Counsel Stack Legal Research, https://law.counselstack.com/opinion/energynorth-natural-gas-inc-v-continental-insurance-nh-2001.