Insurers don't have to pay for Land O'Lakes environmental cleanup: Court

Insurers don't have to pay for Land O'Lakes environmental cleanup: Court

Source: http://www.businessinsurance.com, August 29, 2013
By: Judy Greenwald

Units of Liberty Mutual Holding Co. Inc. and Travelers Cos. Inc. initially breached their duty to Land O’Lakes Inc. for failing to provide defense coverage for an environmental cleanup, but Minnesota’s statute of limitation bars the agricultural cooperative from pursuing litigation on the issue, an appellate court ruled Thursday.

Midland Cooperatives Inc. owned an oil refinery in Cushing, Okla., from 1943 until 1977, according to the ruling in Land O’Lakes Inc. v. Employers Insurance Co. of Wausau et al. by the 8th U.S. Circuit Court of Appeals in St. Louis.

In 1977, the facility was sold to Hudson Oil Refinery Co., which abandoned the refinery in 1982 and went bankrupt in 1984. Arden Hills, Minn.-based Land O’ Lakes acquired Midland in 1982, including the now-dormant refinery, according to the ruling.

In July 1999, the U.S. Environmental Protection Agency designated the refinery as a Superfund site under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980.

In January 2001, the EPA sent Land O’Lakes a special notice letter informing it that it was considered a “potentially responsible party” under CERCLA and thus potentially liable for cleanup costs at the site.

Land O’Lakes responded to the letter by asserting Hudson Oil, not Midland, caused any contamination at the refinery site, but nevertheless notified Wausau, a unit of Boston-based Liberty Mutual and Hartford, Conn.-based Travelers Indemnity Co. of the EPA’s claims and sought defense and indemnification. Both insurers denied coverage.

 

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