Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Bellaire Corp. v. American Empire Surplus Lines Insurance Co.

Court of Appeals of Ohio, Eighth District, Cuyahoga

June 28, 2018

BELLAIRE CORPORATION PLAINTIFF-APPELLANT
v.
AMERICAN EMPIRE SURPLUS LINES INSURANCE COMPANY, ET AL. DEFENDANTS-APPELLEES

          Civil Appeal from the Cuyahoga County Court of Common Pleas Case No. CV-13-816172

          ATTORNEYS FOR APPELLANT Gabrielle T. Kelly David Sporar Brouse McDowell, L.P.A. Lucas M. Blower Amanda M. Leffler Brouse McDowell, L.P.A.

          ATTORNEYS FOR APPELLEES For American Empire Surplus Lines Insurance Company Gregory A. Harrison Dinsmore & Shohl, L.L.P Robert D. Anderle Seeley, Savidge, Ebert & Gourash Co., L.P.A.

          For American Insurance Company David A. Schaefer McCarthy, Lebit, Crystal & Liffman Co., L.P.A. Robert D. Anderle Seeley, Savidge, Ebert & Gourash Co., L.P.A. For Federal Insurance Company Robert D. Anderle Daniel F. Gourash Seeley, Savidge, Ebert & Gourash Co., L.P.A., Dipali Parikh

          For First State Insurance Company Karl A. Bekeny Stephanie Rzepka Kevin M. Young Tucker Ellis, L.L.P. Stacy S. Freel Wayne S. Karbal Karbal, Cohen, Economou, Silk & Dunn, L.L.C. Robert D. Anderle Seeley, Savidge, Ebert & Gourash Co., L.P.A.

          ATTORNEYS FOR APPELLEES (continued) For First State Underwriters Agency of New England Reinsurance Corporation Stacy S. Freel Wayne S. Karbal Karbal, Cohen, Economou, Silk & Dunn, L.L.C.

          BEFORE: E.T. Gallagher, J., McCormack, P.J., and Laster Mays, J.

          JOURNAL ENTRY AND OPINION

          EILEEN T. GALLAGHER, JUDGE

         {¶1} Plaintiff-appellant, Bellaire Corporation, appeals an order granting summary judgment in favor of defendants-appellees, Federal Insurance Company ("Federal"), American Empire Surplus Lines Company ("American"), and First State Underwriters Agency of New England Corporation ("First State") (collectively "the Insurers"). Bellaire claims the following two errors:

1. The trial court erred by granting summary judgment in favor of the appellee insurers and against Bellaire Corporation.
2. The trial court erred by failing to consider all arguments presented in the summary judgment.

         {¶2} We find no merit to the appeal and affirm the trial court's judgment.

         I. Facts and Procedural History

         {¶3} Bellaire is an Ohio corporation. Its corporate predecessor, The North American Coal Company ("NACCO"), operated a bituminous coal mine known as Conemaugh Mine No. 1 in west central Pennsylvania from 1968 to 1981. While the mine was in operation, it regularly filled with groundwater that needed to be pumped out and discharged. However, before discharging the water into local waterways, the water had to be treated because, as is common with mines, the water becomes acidic as it mixes with oxygen and elements in the mine. This phenomenon is known in the mining industry as "acid mine drainage."

         {¶4} Ralph Shank, Bellaire's chief mining engineer, explained during his deposition that regulations, such as the Clean Steam Laws, have been governing mining operations and the treatment of acid mine drainage since the mid-1960s. (Shank depo. at 19, 46-48, describing Clean Stream Laws.) In accordance with those regulations, Bellaire obtained a mining permit in 1968 known as Permit No. 367M045 "Authorizing the Operation of a Coal Mine," to operate the Conemaugh Mine No. 1 ("the Permit"). Under the terms of the Permit, Bellaire is responsible for acid mine drainage both while the mine is in operation and after its closure. (See the Permit marked as BEL567 attached to Federal's motion for summary judgment; Shank depo. 18, 56, 176-177; Kranz depo. 57-60.) Thus, Bellaire treated the acid mine drainage from the Conemaugh Mine No.1 at the nearby Hices Run Mine Drainage Treatment Plant, which was built for that purpose.

         {¶5} When Bellaire closed the mine in December 1981, Bellaire and the Pennsylvania Department of Environmental Resources ("PADER") formulated a plan to seal the mine to prevent the discharge of acid water from the mine that could pollute adjoining areas. An internal memorandum suggests that personnel within Bellaire anticipated seepage of acidic water after the mine's closure and believed the Hices Run treatment plant should remain open to deal with that contingency. (Shank depo. 87-90.) The internal memorandum, dated May 21, 1982, states: "Current plans are to leave the plant intact. Plant may be needed in the future if NACCO[1] is required to treat mine water." (Shank depo. 87-90; Internal Memorandum dated May 21, 1982 titled "Conemaugh Mine No.1 Mine Closing Questionable Areas with Penelec."[2]) Despite the precautions set forth in the memorandum, Bellaire sealed the mine by filling its boreholes with cement and tore down the Hices Run treatment plant.

         {¶6} In 1984, "red water" began flowing out of the Conemaugh mine onto nearby properties, and the property owners brought property damage claims against Bellaire. Federal, Bellaire's primary liability carrier, paid the claims in the mid-1980s. Following a lengthy investigation, PADER later determined that the "red water" was coming from the Conemaugh mine and demanded that Bellaire pump the mine and treat the polluted water.

         {¶7} Bellaire constructed the Hutchinson Hollow Treatment Plant, which opened in May 1990, to prevent additional flooding of acid mine drainage from the Conemaugh mine. The construction of the plant cost $2, 172, 061. (Complaint ¶ 50.) Bellaire alleges it incurred approximately $8 million in costs to operate the treatment plant in the ensuing years, and that it financed a $5 million trust to cover future operating costs. (Complaint ¶ 50.)

         {¶8} Bellaire submitted claims to the Insurers seeking $15 million in damages, which it argues represents the cost of constructing and operating the Hutchinson Hollow Treatment Plant. The Insurers denied the claims. Consequently, in November 2013, Bellaire filed a complaint against the Insurers alleging breach of contract claim, for denying coverage, and a claim for declaratory judgment, seeking a declaration that the Insurers' policies covered Bellaire's claims.

         {¶9} The Insurers filed motions for summary judgment, arguing, among other things, that Bellaire's damages did not result from an "occurrence" as defined by the policies because the treatment of acid mine drainage is a statutorily mandated, routine business expense that is prophylactic in nature. The Insurers also argued that the construction and operation of the Hutchinson Hollow Treatment Plant was not "property ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.