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Gilbert Spruance Co. v. Pennsylvania Mfgs. Ass'n Ins. Co.

134 N.J. 96, 629 A.2d 885 (1993)

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Gilbert Spruance Co. v. Pennsylvania Mfgs. Ass'n Ins. Co.

New Jersey Supreme Court

134 N.J. 96, 629 A.2d 885 (1993)

Facts

Gilbert Spruance Co. (plaintiff), a Pennsylvania corporation, operated a manufacturing facility in Pennsylvania. Gilbert Spruance hired waste haulers to remove waste materials from its facility. The waste haulers deposited the waste in dumps in New Jersey. During the time that these operations were ongoing, Pennsylvania Manufacturers’ Insurance Company (Pennsylvania Manufacturers) (defendant), a Pennsylvania entity, issued comprehensive general-liability insurance policies to Gilbert Spruance. The policies were negotiated and executed in Pennsylvania, and Gilbert Spruance paid premiums in Pennsylvania. The policies contained a standard pollution-exclusion provision, which generally excluded coverage for damage arising from pollution but included coverage for discharges that were sudden and accidental. Gilbert Spruance was sued by individual plaintiffs and the New Jersey Department of Environmental Protection seeking damages and remediation relating to the New Jersey dump sites. Pennsylvania Manufacturers denied coverage for these claims under the pollution-exclusion clause. Gilbert Spruance filed suit against Pennsylvania Manufacturers in New Jersey state court seeking a declaration that it was entitled to coverage. The trial court granted Pennsylvania Manufacturers’ motion for summary judgment, holding that interpretation of the pollution exclusion was governed by Pennsylvania law, which held that gradual release of pollutants was not sudden and accidental. The appellate division reversed, holding that New Jersey law, which permitted coverage for gradual releases, controlled. The supreme court granted certification.

Rule of Law

Issue

Holding and Reasoning (Clifford, J.)

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