KANSAS CITY – A federal judge has ruled that a jury will decide whether a pollution liability insurer must indemnify the developer of a former U.S. Army munitions plant for the cleanup of a heavily polluted site.
On March 16, U.S. District Chief Judge Greg Kays of the Western District of Missouri denied Illinois Union Insurance Company’s bid to dismiss Sunflower Redevelopment LLC’s lawsuit for its remediation costs at the Sunflower Army Ammunition Plant in Desoto, Kansas. The Army manufactured ammunition at the plant until 1998 and sold the 9,035-acre site to Sunflower in 2005. It also established three trust accounts to help pay for expenses related to the remediation project, according to the opinion.
Sunflower Redevelopment filed suit in circuit court after Illinois Union refused to indemnify the developer. Sunflower argued it was entitled to summary judgment on its claim that the Premise Pollution Liability (PPL) policy “covers remediation costs arising out of three particular pollution conditions – applied pesticides, lead-based paint and asbestos-containing materials (ACM) in soils.” The developer referenced letters exchanged with Illinois Union, summarizing that one of the reasons the insurer denied its claim was that Sunflower hadn’t provided proof of an actual or existing pollution condition.
But Sunflower argued “actual” and “existing” aren’t terms within the policy so they aren’t required for coverage. The developer also argued that even if it’s required, they’ve submitted documents demonstrating the condition. The court agreed and granted Sunflower’s motion for summary judgment.
But the court denied the motion to declare the costs it incurred to investigate and remediate applied pesticides, lead-based paint and ACM in soils is covered by the PPL policy and should be paid by Illinois Union. The court said questions remain about policy coverage and they must be decided at a trial. Those questions include whether Sunflower will suffer financial injury considering the three trust accounts and the Army’s independent efforts to clean up asbestos at the site. A jury also must consider Illinois Union’s argument whether Sunflower made “a proper and timely claim.”