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CMP v. Moore
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Decision:  1997 ME 83
Docket:   KEN-96-86
Argued September 4, 1996
Decided April 22, 1997




	[¶1]  Central Maine Power Company (CMP) appeals from the summary
judgment entered in the Superior Court (Kennebec County, Alexander J.), in
favor of the defendant insurers'{1} on CMP's complaint seeking a declaratory
judgment that the insurers had a duty to indemnify CMP for costs that it
incurred in cleaning up environmental damage occurring at a salvage yard in
Augusta. Because we agree with CMP's contentions regarding one of the
three different types of policies, we vacate in part the summary judgment. 
Being evenly divided with respect to the other two types of policies, we
affirm the remainder of the summary judgment.
	[¶2] Between 1952 and 1978, CMP sold for recycling used electrical
equipment including transformers to the F. O'Connor Company (O'Connor)
salvage yard in Augusta.  During the recycling performed at the yard, oil
containing polychlorinated biphenyls (PCBs) drained into the ground.  On
September 9, 1983, the United States Environmental Protection Agency
(EPA) placed the site on the National Priorities List of sites eligible for
Superfund money.  In April 1985, the EPA, pursuant to the Comprehensive
Environmental Response and Liability Act (CERCLA),{2} named CMP a
potentially responsible party{3} (PRP) for the environmental damage at the
salvage yard because CMP had arranged for disposal of hazardous substances
on the property.  CMP did not own the property at this time.
	[¶3]  On May 13, 1986, CMP entered into an administrative consent
order with the EPA.  CMP agreed to investigate and prepare a feasibility
study for restoring the site and an evaluation of alternatives for remedial
action.  CMP then entered into a consent order with the Maine Department
of Environmental Protection (DEP) on June 23, 1986, agreeing to remove
the current threat to the land and to conduct and prepare a study.  In 1987,
pursuant to an amended order with both the EPA and DEP, CMP agreed to
conduct additional field investigations and take other remedial measures.  In
addition, the United States sued CMP in federal court on behalf of the EPA
for costs already incurred by the EPA in investigating and remediating the
salvage yard.  Pursuant to a consent decree, CMP agreed to perform all work
and reimburse the United States for costs it had incurred in dealing with
the site.  
	[¶4]  CMP contends that its costs to comply with the consent decrees
to remediate the site are covered by the insurers' policies.  CMP is partially
self-insured for amounts ranging between $10,000 and $1,000,000.  In
addition, CMP purchased from a number of different insurance companies
three types of policies that are at issue in this case.  The Superior Court
provided examples of the three policies in its opinion.  The first category of
policies, designated as "Type I" policies, provides indemnity 

		(a) For any and all sums which the Assured shall by law
	become liable to pay and shall pay or by final judgment be
	adjudged to pay as damages to any person or persons (excluding
	employees injured in the course of their employment) for
	personal injury sustained including death at any time resulting
	therefrom (hereinafter called "Public Liability").
		(b) For any and all sums which the Assured shall by law
	become liable to pay and shall pay or by final judgment be
	adjudged to pay by reason of damage to or destruction of
	property including consequential loss, other than property
	owned by the Assured (hereinafter called "Property Damage.")

	. . . .

	by reason of any and all operations undertaken by the Assured. 

CMP also purchased two other types of policies.{4}

	[¶5]  After each of the individual insurers stipulated to the policy
language in their respective insurance contracts, the Superior Court granted
the insurers' motion for a summary judgment based on the language of the
policies and our holding in Patrons Oxford Mut. Ins. Co. v. Marois, 573 A.2d
16 (Me. 1990).  CMP subsequently filed this appeal.
	[¶6]  When a party appeals from an order granting a motion for a
summary judgment, we view the evidence in the light most favorable to the
party against whom the judgment was entered to determine whether the
record supports the trial court's conclusion that there is no genuine issue of
material fact, and the movant is entitled to a judgment as a matter of law. 
Simpson v. Central Maine Motors, Inc., 669 A.2d 1324, 1325-26 (Me. 1996).  
	[¶7]  Our task is to determine the meaning of the private insurance
contracts before us. Patrons Oxford Mut. Ins. Co. v. Marois, 573 A.2d at 17. 
In Patrons Oxford, we held that an insurance contract stating that the
insurer will pay "all sums which the insured shall become legally obligated to
pay as damages because of . . . property damage . . . ." covered amounts that
may be awarded against an insured for damage to a third party's property. 
Id. at 18.  The insured had expended only legal defense costs arising out of a
DEP proceeding regarding leakage from a fuel company's underground
gasoline storage tanks on the insured's premises.  We held that no coverage
existed as a matter of law pursuant to the language of the particular policy
because no legal damage to any third party's property had occurred.  We also
concluded that no ambiguity existed in the phrase "as damages" because
"[a]mbiguity . . . is created only by controverting an insured's hope or
assumption that every out-of-pocket payment is covered into a part of the
contract language." Id. at 19.
	[¶8] We agree with CMP that the language of the Type I policies is
different from the language of the policy present in Patrons Oxford and that
coverage is not precluded by our holding in that case.   Although CMP bought
the O'Connor property in 1992 for purposes of remediation, CMP did not
own it when the environmental damage to the site occurred.{5}  The Type I
policies provide coverage for sums that the insured is liable to pay "by reason
of damage to or destruction of property . . . ."  The word "damage" contained
in the policy language does not modify the word "pay" but instead describes
the state of the property.{6}  The limiting language "as damages" that
precluded coverage in Patrons Oxford is absent from the Type I policies.  We
stated in that case that "[o]nly by completely eliminating the phrase 'as
damages' can coverage be found.  The contract would then require the
insurer to 'pay on behalf of the insured all sums which the insured shall
become legally obligated to pay . . . because of . . . property damage.'  That
would support coverage . . . ." Id. at 19 n.7.  The phrases "pay by reason of
damage to property" and "pay because of property damage" are functionally
identical.  Because the "as damages" language does not exist in the Type I
policies, the insurers who issued them are not entitled to judgment as a
matter of law on that ground.{7}  Accordingly, we vacate the judgment as it
pertains to Type I policies.
	The entry is: 
							Judgment affirmed as to the Type
							II and Type III policies.  Judgment
							vacated as to the Type I policies. 
							Remanded 	to the Superior Court
							for further proceedings consistent
							with the opinion herein. 
Attorneys for plainitff: John W. Fried, Esq. (orally) Eugene R. Anderson, Esq. Joan L. Lewis, Esq. Anderson, Kill & Olick, P.C. 1251 Ave. of the Americas New York, NY 10020-1182 and Philip C. Johnson, Esq. William H. Laubenstein, III, Esq. Johnson, Webbert & Laubenstein P O Box 29 Augusta, ME 04332-0029 Attorneys for defendants: Andrew H. Marks, Esq. (orally) Mary C. Bryson, Esq. Todd Hutchen, Esq. Crowell & Moring 1001 Pennsylavania Ave. NW Washington, DC 20004-2595 and James E. Kaplan, Esq. Julianne Cloutier, Esq. Jensen, Baird, Gardner & Henry P O Box 4510 Portland , ME 04112-4510 (for CIGNA Specialty and Century Indem.) Stephen C. Ascher, Esq. (orally) Lard, Bissell & Brook 115 South LaSalle St. Chicago, IL 60603 and Timothy C. Woodcock, Esq. Weatherbee, Woodcock, Burlock & Woodcock P O Box 1127 Bangor, ME 04402-1127 (for Ernest Moore and other Lloyd's names) Doris Harnett, Esq. Cuddy & Lanham 470 Evergreen Woods Bangor, ME 04401 and James P Schaller, Esq. M. Elizabeth Medaglia, Esq. Richard W. Bryan, Esq. Donald L. Uttrich, Esq. Jackson & Campbell 1120 20th St., NW, South Tower Washington, DC 20036 and Brian J. Coyle, Esq. Victor C, Harwood, III, Esq. Harwood Lloyd 130 Main St. Hackensack, NJ 07601 (for American Home, Birmingham Fire, Lexington, and National Union Fire) Carl F. Rella, Esq. Anne-Marie L. Storey, Esq. Rella, Dostie & Tucker, P.A. P O Box 696 Bangor, ME 04402-0696 and Gregory A. Krauss, Esq. Michelle Melin, ,Esq. Carr, Goodson & Lee, P.C. 1301 K St., NW Washington, DC 20005-3300 (for Continental/ Harbor/Greenwich) Frederick C. Moore, Esq. Gregory E. Smith, Esq. Robinson, Kriger & McCallum P O Box 568 Portland, ME 04112-0568 and Jordan M Sklar, Esq. Scheft & Scheft 909 Third Ave. New York, NY 10022 (for Highlands Ins.) Thomas Schulten, Esq. Perkins, Thompson, Hinckley & Keddy P O Box 426 Portland, ME 04112-0426 (for Allstate/Northbook) and John R. Linnell, Esq. Linnell, Choate & Webber P O Box 190 Auburn, ME 04212-0190 (for AEGIS) and Alan S. Rutkin, Esq. John L. Rivkin, Esq. Peter P. McNamara, Esq. Anthony R. Gambardella, Esq. Rivlin, Radler & Kremer EAB Plaza Uniondale, NY 11556 (for Allstate/Northbook and AEGIS) Theodore H. Kurtz, Esq. P O Box J South Paris, ME 04281 and Robert Marc Chemers, Esq. Daniel G. Willis, Esq. Pretzel & Stouffer One South Wacker Dr., Suite 2500 Chicago, IL 6060-4673 (for Ranger Ins.) John C. Montgomery, Esq. Bernstein, Shur, Sawyer & Nelson P O Box 9729 Portland, ME 04104-5029 and Gregory P. Deschenes, Esq. Dennis W. Duggan, Esq. Peabody & Brown 101 Federal St. Boston, MA -2110-1832 (for Fist State & Twin City Fire) Mark G. Furey, Esq. Thompson, McNaboe, Ashley & Bull P O Box 447 Portland, ME 04112-0447 (for American Re-Ins., Executive Re-Indem., American Excess) R. Paul Roecker, Esq. Lori H. Watson, Esq. Fitzhugh & Associates 155 Federal St., Suite 1700 Boston, MA 02110-1727 (for Home Ins.) Willard D. Pease, Esq. Crandall, Hanscom, Pease & Collins P O Box 664 Rockland, ME 04841-0664 and Vincent E. Reilly, Esq. McElroy, Deutsch & Mulvaney P O Box 2075 Morristown, NJ 07962 (for International Surplus Lines) Martha C. Gaythwaite, Esq. Friedman & Babcock P O Box 4726 Portland, ME 04412-4726 and Timothy G. Reynolds, Esq. William J. Wright, Jr., Esq. Adam C. Rosenberg, Esq. Skadden, Arps, Slate, Meagher & Flom 919 Third Ave. New York, NY 10022 (for North Star Reinsurance) John J. Wall, III, Esq. Christopher C. Dinan, Esq. Monaghan, Leahy, Hochadel & Libby P O Box 7046 Portland, ME 04112-7046 and Allan Taylor, Esq. Taylor, Anderson & Travers 75 Federal Street Boston, MA 02110 (for Unigard Security) Severin M. Beliveau, Esq. Stephen E. F. Langsdorf. Esq. Preti, Flaherty, Beliveau & Pachios, LLC P O Box 1058 Augusta, ME 04332-1058 and Stephen D. Strauss, Esq. Traub Eglin Lieberman Strauss Mid-Westchester Executive Park 35 Skyline Drive Hawthorne, NY 10532 (for Northwestern National) Attorneys for amici curiae: Andrew Ketterer, Attorney General Dennis J. Harnish, Asst. Atty . Gen. 6 State House Station Augusta, ME 04333-0006 Andrew M. Horton, Esq. Verrill & Dana P O Box 586 Portland, ME 04112-0586 and Daniel E. Troy, Esq. Wiley, Rein & Fielding 1776 K St., NW Washington, DC 20006 (for Insurance Environmental Litigation Association) FOOTNOTES******************************** {1} The following parties are defendants in this appeal: Affiliated Factory Mutual Insurance Company, Allstate Insurance Company (successor in interest to Northbrook Excess & Surplus Insurance (formerly Northbrook Insurance Company)), American Home Assurance Company, American Re-Insurance and Executive Re-Indemnity Inc. and American Excess Insurance Company, Associated Electric & Gas Insurance Services Limited, Birmingham Fire Insurance Company of Pennsylvania, Century Indemnity Company (as successor to both Insurance Company of North America and CIGNA Specialty Insurance Company), Ernest A. Moore, et al., First State Insurance Company, Harbor Insurance Company (d/b/a Greenwich Insurance Company) and Columbia Casualty Company, Highlands Insurance Company, Home Insurance Company, International Insurance Company (as successor in interest to International Surplus Lines Insurance Company), Lexington Insurance Company, National Union Fire Insurance Company of Pittsburgh, North Star Reinsurance Corporation, Northbrook Insurance (successor in interest to Allstate Insurance Company), Ranger Insurance Company, Twin City Fire Insurance Company, Unigard Mutual Insurance Company, Unigard Security Insurance Company, and Westport Insurance (formerly known as Puritan Insurance Company). Northwestern National Insurance Company has a pending motion to dismiss in the Superior Court. Also, Southern American, listed as one of the original defendants, is in liquidation. Neither filed a brief to this Court. {2} 42 U.S.C. §§ 9601-9675 (1995). {3} CERCLA provides liability for owners or operators of facilities or vessels, people who at the time of disposal owned them, and for any "person who by contract, agreement, or otherwise arranged for disposal or treatment, or arranged with a transporter for transport for disposal or treatment, of hazardous substances owned or possessed by such person . . . ." 42 U.S.C. §§ 9607 (a) (1) - (3) (1995). {4} These policies, categorized by the court as "Type II" and "Type III" policies, insured for "damages," "expenses," and "ultimate net loss." Because we are evenly divided on the meaning of these polices, we do not address them in this opinion. {5} If CMP had owned the property, presumably it would be excluded from coverage under owned property exclusions in the policies. {6} The difference can be seen clearly by comparing the "Public Liability" and "Property Damage" sections of the Type I policies. The former contains the "as damages" limitation while the latter does not. See supra p.3. {7} The insurers argue that the phrase "shall by law become liable to pay" conveys the same concept as "as damages." We do not agree. That phrase does not contain the limitation that the payment be made to a third party whose property has been damaged. Indeed, in Patrons Oxford, we concluded that "as damages," and not the phrase "shall become legally obligated to pay" controlled coverage under the insurance contract. Id. at 19 & n.7.