July 8th, 2015
MCGINNES INDUSTRIAL MAINTENANCE CORPORATION v. THE PHOENIX INSURANCE COMPANY AND THE TRAVELERS INDEMNITY COMPANY :: 2015 :: Supreme Court of Texas Decisions :: Texas Case Law :: Texas Law :: U.S. Law :: Justia.
Texas has joined a growing number of jurisdictions which have ruled that enforcement actions by EPA can qualify as a “suit” in a CGL insurance policy, requiring the carrier to provide a defense to the insured. (See prior post on other similar decisions here) In this case, EPA issued requests for information under CERCLA Section 104(e) (aka Rule 104 Request for Information) to the McGinnes company in connection with its investigation of a contaminated site. EPA eventually issued a Unilateral Administrative Order (UAO) to McGinnes requiring it to perform an investigation for remediation (a “remedial investigation and feasibility study,” aka an RI/FS, one of the primary requirements for remediation). Failure to comply with a Section 104(e) request for information or a Unilateral Administrative Order can result in hefty penalties.
McGinnes’s CGL carrier denied coverage on the basis that the EPA proceedings were not “suits” under the policy (which was undefined in the policy), A majority of the Texas Supreme Court disagreed, finding that CERCLA had given EPA specific enforcement powers which it previously had only through litigation (e.g., the power to compel disclosures, impose injunctions, and require other actions) and therefore had the same effect as a lawsuit. The result was that the Texas Supreme Court held the CGL carrier had a duty to defend McGinnes.
Hmm. There are certain areas in my life where my wife has enforcement powers that rival those of the EPA. Maybe I need to review my homeowners policy…