Lipe Lyons Scores Appellate Victory
March 4, 2013On February 22, 2013 the Illinois Appellate Court, affirmed a summary judgment order of the Cook County Circuit Court, in favor of Lipe Lyons client United National Insurance Company and two other insurers in the case of Village of Crestwood v. Ironshore Specialty Insurance, First Judicial District, Illinois Appellate Court, No. 20-0112. The case arises from insurance coverage litigation spawned by 30+ individual and class action water contamination lawsuits brought against the Village of Crestwood, Illinois. In the underlying cases the plaintiffs alleged that the village knowingly and routinely mixed water from a well polluted by perchloroethylene, with Lake Michigan water and distributed it to village residents through the village’s tap water supply. The village sought defense and indemnity from several insurers who had provided General Liability, primary and excess policies over the period of the alleged pollution. The carriers denied coverage based on the Absolute Pollution Exclusions contained in the policies. The village argued on appeal that: (1) it was alleged to have been merely the distributor of a defective product (drinking water); (2) it was not the initial cause of the pollution; (3) its policies should provide coverage for claims arising from one of its “central business activities” (water distribution); and (4) the pollution exclusion was intended only to apply to parties who were potentially liable for clean-up costs under CERCLA. The Court rejected these arguments and held that the exclusions were effective to allow denial of coverage.