Maryland Casualty Company v. W.R. Grace Co.

Full title: MARYLAND CASUALTY COMPANY, Plaintiff, v. W.R. GRACE CO., et al., Defendants

Court: United States District Court, S.D. New York

Date published: May 1, 2000

88 Civ. 4337 (JSM) (S.D.N.Y. May. 1, 2000)

Opinion

88 Civ. 4337 (JSM)

May, 2000

Elizabeth M. DeCristofaro, Ford Marrin Esposito Witmeyer Gleser LLP, for Continental Casualty.

Anthony J. Marchetta, Pitney, Hardin, Kipp Szuch LLP, for W.R. Grace.

MEMORANDUM OPINION AND ORDER

JOHN S. MARTIN, JR., District Judge.

In an opinion and order dated April 28, 1994, the Court granted Continental Casualty Company summary judgment against Grace declaring that the Continental policies required Grace to provide self-insurance for claims arising from gradual pollution and that Continental had no duty to defend Grace on such claims.

Almost six years later in January, 2000, Grace filed this motion for summary judgment claiming that an agreement entered into between Continental and Grace in 1990 modified their prior policies and that Continental is liable to Grace for indemnity and defense costs on pollution claims.

The question that naturally arises is "If the 1990 agreement required Continental to provide this coverage, why did Grace not assert this claim in response to the 1994 motion?" The answer is that Grace's then counsel must have recognized that the claim was frivolous and did not wish to run the risk of having the Court impose sanctions under Rule 11 or 28 U.S.C. § 1927. Grace has, however, obtained new counsel who are apparently less concerned about their professional reputation and the damage to their pocketbook that sanctions may involve.

In short, Grace's claim borders on the frivolous. The 1990 agreement on its face clearly does not apply to claims relating to gradual pollution. The policy specifically states in the final whereas clause: "[the parties] have entered into this agreement solely to resolve their disputes under the Primary Policies concerning coverage for Products Claims. . . ." So there could be no doubt on this issue paragraph 11(h) provided:

Nothing in this Agreement shall be construed to reduce, alter, modify, or affect the following: (a) the parties' rights and obligations under the Primary Policies, except those relating to Products claims, or (b) the parties' rights and obligations under any policies other than the Primary Policies.

In view of this clear language setting forth the limits of the agreement, Grace's tortured attempt to construe other language in the agreement to give it dramatic new rights with respect to pollution claims is completely without merit.

For the foregoing reasons Grace's motion for partial summary judgment, or, in the alternative, to amend its cross-claims is denied.

SO ORDERED.