Aetna Casualty & Surety Co. v. Commonwealth of Kentucky

179 S.W.3d 830 (2005)

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Aetna Casualty & Surety Co. v. Commonwealth of Kentucky

Kentucky Supreme Court
179 S.W.3d 830 (2005)

RW

Facts

The Commonwealth of Kentucky (the state) (defendant) licensed and regulated a radioactive-waste-disposal site used by the operators (defendants) of many commercial and institutional facilities. The state closed the site when it learned that waste was leaching onto adjacent properties. Some years later, and pursuant to federal legislation, the United States Environmental Protection Agency (EPA) ordered the operators and the state to decontaminate the disposal site. To cover the costs of cleanup, the operators turned to Aetna Casualty & Surety Company and the other members of the American Nuclear Insurers (ANI) consortium (plaintiffs), who insured the operators under special nuclear-liability policies. The ANI policies insured the operators against all sums they would become “legally obligated to pay as damages because of . . . property damage.” The policies defined property damage as including damage related to radioactive contamination. However, the policies did not define damages. The ANI sued unsuccessfully for a declaratory judgment that it was not obligated to defend the operators or the state against the EPA or to indemnify the operators for damages consisting of EPA-mandated cleanup costs. The trial court’s judgment was affirmed by an intermediate court. The ANI appealed to the Kentucky Supreme Court.

Rule of Law

Issue

Holding and Reasoning (Scott, J.)

Dissent (Cooper, J.)

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