A federal appeals court on Thursday overturned a lower court decision that had favored a General Re Corp. unit in a dispute with a trucking company in a pollution case and ruled that an endorsement of its exaggerated policy was ambiguous.
On February 19, 2019, a tanker owned by Fitchburg, Massachusetts-based Performance Trans Inc., overturned in North Salem, New York, and spilled approximately 4,300 gallons of gasoline and diesel on the roadway and into a nearby reservoir, according to the the first U.S. Circuit Court of Appeals in Boston Performance Trans., Inc .; Utica Mutual Insurance Co. v.General Star Indemnity Co.
Remedial work has so far cost almost $ 3 million, according to the decision.
At the time of the accident, PTI had approximately $ 1
After the reorganization costs exceeded the Utica policy, PTI filed a claim with General Star, which denied coverage based on a "total pollution" exclusion in its policy.
PTI and Utica Mutual sued the U.S. District Court in Worcester for breach of contract, claiming that there was coverage under a "special risk" endorsement in the Gen Re coverage, or that at least the policy was ambiguous.
The District Court held that the policy was unambiguous and ruled in favor of Gen Re. It was overthrown by a unanimous three-judge appeals panel, which concluded that the approval of specific hazards was ambiguous and "susceptible to at least three different interpretations." others ”, nor do other policy provisions resolve the ambiguity, the ruling says.
"In these circumstances, neither PTI's nor General Star's interpretation of Special Hazards Endorsement is unreasonable," the judgment said. "Massachusetts law is unequivocal that we must interpret all ambiguity in favor of the insured in the face of two credible interpretations of the policy." It is said in the reversal of the lower court's decision.
Lawyers in the case did not respond to a request for comment.