Quincy Mutual Fire Insurance Co. v. Borough of Bellmawr

The Borough of Bellmawr (the borough) (defendant) deposited municipal waste in the Helen Kramer Landfill (the landfill) in Bellmawr, New Jersey, from approximately 1978 to 1981. The borough did not separate harmful pollutants from municipal trash. In 1981, the Environmental Protection Agency (EPA) conducted a remedial investigation study that revealed the presence of hazardous chemicals in the soil and waters at the landfill. The borough settled with the EPA for a contribution of $449,036.39 for response and remedial costs. The borough had maintained comprehensive general liability insurance (CGL) policies with Century Indemnity Company (Century) and Quincy Mutual Fire Insurance Co. (Quincy) (plaintiff). The Century policy was in effect from June 18, 1977, until June 18, 1978. The Quincy policies were in effect from June 18, 1978, until June 18, 1981. The borough filed a declaratory-judgment action against Quincy and Century. Quincy was ordered to indemnify the borough. Quincy filed suit seeking a declaratory judgment to determine the liabilities of Quincy and Century. During the trial, Dr. Ralph Lee Steiner testified about leachate, which is the liquid that passes through contaminated materials and contaminates groundwater. Dr. Steiner testified that leachate could have been discharged from the Landfill only when the waste was saturated at field capacity, which he calculated was approximately 185 to 200 days after the borough began dumping in the Landfill. Dr. Steiner concluded that groundwater contamination was not generated before June 18, 1978. The trial court determined that coverage under a CGL policy was triggered not when waste was deposited, but when leachate escaped and contaminated groundwater. The court held that the Quincy policy was the only one in effect at such a time. The appellate division affirmed, and Century was absolved from liability. Quincy appealed.