Any good trial lawyer will tell you that the law is about telling stories.
Once upon a time, Timothy and Stacy Creamer bought a house. Only after they closed did they realize that some strategically placed rugs were hiding the evidence that, “up from the ground come a bubblin’ crude.”
Unlike Jed Clampett, rather than finding themselves millionaires, the Creamers found themselves with a million dollar liability – literally.
This being a law story, of course the sellers were bankrupt. The Creamers thus pursued the sellers’ insurer. The case ended up in the Appeals Court, which held that the Creamers could pursue their claims under the policy.
The insurer, Arbella, made three arguments in support of its summary judgment motion. The Court rejected them all. In order, the Court held that:
- The property damage was caused by an occurrence. Arbella argued that the damage was caused by the sellers’ fraud, not by the original release of oil. However, as the Court pointed out, the Creamers’ had claims based on Chapter 21E, the Commonwealth’s superfund law. Since Chapter 21E is a strict liability statute, the Creamers’ damages were caused by the release, not by the sellers’ fraud. (But see number 3, below!)
- The loss occurred during the policy period. Following precedent, the Court concluded that, so long as the property damage occurred during the policy period, it did not matter that the harm to the claimant did not occur until later.
- At least some of the damage was not “expected or intended.” This is the most significant part of the case. While preserving Creamers’ claims, the Court split the baby on this one. It held that the original release was not expected or intended, but that, once the sellers discovered the spill without doing anything about it, any further damage was “expected” by the seller. The Court thus remanded for a determination by the Superior Court how much of the total property damage was “expected.”
The Creamers will thus get their day in court, but, depending on when the sellers learned of the contamination, their recovery could be significantly limited. They certainly will not get enough to move to Beverly Hills. No swimming pools or movie stars for the Creamers.