National Insurance Law Forum : Insurance Litigation Lawyer & Attorney : National Insurance Law Forum : Insurance Coverage, Bad Faith Litigation

One is that policyholders will seek to cope with Boston Gas by redefining the injury for which they are seeking coverage. It is also apparent that these strategies may unwittingly cause both policyholders and insurers to re-argue legal doctrines on which they may have taken contrary positions years in the past.

In Boston Gas, the Supreme Judicial Court drew a distinction between long-tail losses and events that are specifically attributable to a discrete identifiable event. The court declared that:
In the ordinary case of a non-progressive injury (e.g., motor vehicle accident or one identified tar spill), the policy in place at the time the covered damage or injury took place would cover all consequential damages, even those taking place after the policy period. Progressive injuries like the environmental contamination in this case are different. Progressive injuries of this type are "indivisible injuries attributable to ongoing events without a single clear 'cause.'"
Whereas long-tail losses must be allocated, coverage for discrete identifiable events is only attributable to one particular policy year and thus does not give rise to any issue of orphan shares or policyholder responsibility for gaps in coverage.

Is it possible for policyholders to convert pollution claims into single-year events to avoid being saddled with responsibility for orphans shares? Two strategies seem apparent.

One strategy will be to devise empirical approaches to quantifying the amount of pollution in any given year. The SJC stated in Boston Gas that “time on the risk” is a default measure for allocation and need not be followed where a more precise and scientific basis exists for determining the amount of damages attributable to property damage during each year of a long-tail loss. Carriers should not be at all surprised if a year or two from now policyholder-oriented consultants such as Navigant begin producing reports purporting to establish that proportionately larger amounts of pollution occurred during covered periods of time or that a high percentage of the cost of cleaning up a given site was attributable to discharges of specific pollutants during a key period of time. Whether such reports satisfy a scientific standard of scrutiny or can withstand Daubert (Lanigan for us) challenges is another story, of course.

A more drastic approach may be to characterize long-tail losses as a one-year event. Such findings are not entirely without precedent, albeit not in Massachusetts. Several years ago, the Minnesota Supreme Court distinguished between claims involving hazardous waste site cleanups, for which it had required pro rata allocation in cases such as Domtar, Inc. v. Niagara Fire Ins. Co., 563 N.W.2d 724 (Minn. 1997) and Northern States Power Co. v. Fidelity & Cas. Co., 523 N.W.2d 657 (Minn. 1994) and bodily injuries suffered by women who had received silicone breast implants. Notwithstanding the ongoing nature of the injuries allegedly attributable to silicone breast implants, the Supreme Court ruled in In Re Silicone Implant Insurance Coverage Litigation, 667 N.W.2d 405 (Minn. 2003) that the continuation of pain and suffering attributable to such implantations were attributable to a specific, identifiable event and therefore did not require inter-policy allocation.

On the other hand, it is difficult to see how this analysis could apply in the context of most environmental liability claims, where contamination either occurred as the result of ongoing discharges from diverse sources over a period of years or decades or that involved ongoing property damage, as in the case of a plume of solvents or DNAPLs migrating through the subsurface.

The irony of any future debate on this point is that, in the past, policyholders have generally argued that the ongoing migration of pollutants from earlier discharges should be a new “trigger of coverage” whereas insurance companies had often argued that the continuation of earlier events was no more than a “loss in progress” and not an ongoing “trigger.” Compare EnergyNorth Natural Gas, Inc. v. Underwriters at Lloyd’s, 848 A.2d 715, 150 N.H. 828 (2004)( that “where the alleged migration of toxic waste is continuing, multiple exposures triggering exposures are also continuing) and American and Foreign Ins. Co. v. Sequatchie Concrete Services, 441 F.3d 341 (6th Cir. 2006)(continuation of loss does not trigger policies). See also Polarome International, Inc. v. Greenwich Ins. Co., No. A-0566-07T1 (N.J. App. December 17, 2008)(“the last pull of the trigger is the initial manifestation of a diacetyl-related personal injury”).

The reversal of burdens of proof that Massachusetts litigants may now make in the wake of Boston Gas foreshadowed to some extent by the Second Circuit’s opinion in Olin Corp. v. Certain Underwriters at Lloyd’s, London, 468 F.3d 120 (2nd Cir. 2006). In Olin, the Second Circuit declared that additional property damage caused by the passive migration or spread of contaminants that had already been discharged into the environment constituted “property damage” under New York law and that such years must be taken into account in determining the denominator for purposes of allocating the manner in which such losses are spread or assigned to policy years. On the other hand, the Second Circuit criticized London Insurer’s arguments view that contamination continues at a constant rate for an indefinite period of time. Further the court was troubled by the prospect that the continuation of property damage in later years would change the amount of coverage under each policy up to that point thus making coverage dependent on events occurring after the policy period. As a result, the court adopted an intermediate approach, holding that property damage occurs as long as contamination continues to spread, whether or not the contamination is based on active pollution or the passive migration of contamination into the soil and groundwater.

In Massachusetts, as elsewhere, it is the policyholder’s burden to present evidence that bodily injury or property damage has occurred during an insurer’s policy period in order to trigger coverage. The irony of Boston Gas is that it is insurers that likely now have the incentive of proving extensive periods of bodily injury or property damage.
 

At the outset of oral argument, Justice Margot Botsford asked counsel for Century Indemnity (Guy Cellucci) where in the record there was any evidence that the pollution had commenced in 1908. She noted that the instruction to the jury and the jury’s finding had only concerned pollution during the Century Indemnity policy period (1951 and 1969). Cellucci responded that there was expert testimony for both parties that pollution had begun contemporaneously with the operation of the site.

Justice Botsford, who took an unusually active role in the argument, inquired whether the policy language that the Appeals Court had considered in Chicago Bridge had involved a different form (London Market) and different policy wordings. Cellucci agreed and stated that, in fact, the wording in the INA policies at issue here correspondence to the line of Illinois insurance cases where courts had applied allocation as opposed to the Chicago Bridge-type wordings that had found for “all sums.”

Indeed, Cellucci noted that the words “all sums” did not appear in the INA policy. Justice Robert Cordy archly observed that he hoped that the insurer’s argument did not hinge solely on that consideration. Cellucci responded that it was only a “minor point” but that it did bear observing that a policyholder could hardly have a reasonable expectation of coverage in the absence of policy wordings to support such an expectation.

Cellucci contended that Massachusetts jurisprudence requires that policy wordings be read together as a whole and not to the exclusion of one term or another. In this case, he argued that the “during the policy period” language clearly limited any insurer’s obligations to those damages attributable to loss during the stated policy period. Judge Botsford observed, on the other hand, that the policy wording was not necessarily all that clear.

Chief Justice Margaret Marshall inquired whether, given the $17 million limit in its 1966-69 policy, only Century Indemnity was on the hook for the insurance cleanup costs. Cellucci stated that this was the case and that the effect of this was to require Century Indemnity to sue other insurers for contribution. Botsford observed that in this event, the other insurers would surely argue that the claims against them were barred in light of settlements.

Justice Spina spoke up for the first time at that point noting that because “all sums” was based in part on the theory of joint and several liability, such claims might be barred by the Massachusetts statute governing claims against tortfeasors. Cellucci appeared to be confused on this point indicating that the issue was not tort law but the meaning of the insurance policies. Spina observed however that, “Any such construction of ‘all sums’ would become ‘muddied up’ by the introduction of joint tortfeasor concepts.”

Returning to his theme, Cellucci argued that the SJC should follow the approach of Massachusetts’ sister states in adopting pro rata allocation. He also emphasized that the issue had not been fully developed in Rubenstein or Chicago Bridge and, indeed, had barely been addressed by the trial court in Rubenstein (at this point, Justice Botsford, who was the trial judge of Rubenstein, appeared to nod her head vigorously).

Justice Spina asked what effect pro rata allocation would have on periods where there was no insurance. Cellucci responded that the policyholder would bear responsibility for periods of self-insurance as it had chosen not to buy insurance.

Justice Cordy wondered how allocation would spread loss and, in particular, whether the insured would be forced to pay a full retention for each triggered year. This led to a discussion of what the “occurrence” was. Justice Spina expressed the view that the reasonable expectation of the parties probably required payment of a separate retention per year. Cordy suggested that there might be other ways of assigning risk so that the insured only paid one full SIR.

Cordy commented that at some level there was a “fictional element” in all of the proposals and the only question was “how much fiction and which fiction we elect to adopt.”

Arguing for Boston Gas, David Elkind urged the Court to simply apply the wording of the policies. Justice Marshall archly responded that he could get at least six votes for this proposition but that the problem was somewhat more complicated than this simple statement. Elkind argued that Century Indemnity was conflating the concepts of “trigger” and “scope” and that the question with respect to “during the policy period” was not whether the policy responded but how much would be paid.

Botsford asked Elkind how he dealt with the “to which this policy applies” language in the policy. Elkind responded that this language dealt with other aspects of the policy and took note of the fact that the Century Indemnity policy contained provisions allocating defense costs but not indemnity. He also argued that since these were liability policies, coverage should track the nature of the insured’s liability.

Justice Cordy inquired whether the language in question was similar to the Century Indemnity policy that the New Hampshire Supreme Court had examined in its pro-insurer analysis in EnergyNorth v. Century Indemnity. Elkind was forced to concede this but suggested that most other states that had considered similar language had adopted an “all sums” approach. Justice Cordy took issue with him on this point and appeared to reject any suggestion that decisions such as Consolidated Edison involved principles of law differing from those applying to Massachusetts.

Justice Marshall took note of the fact that the policies in question were issued in the 1950s and 1960s and pre-dated the long-tail liabilities that have since emerged as the result of asbestos litigation and the adoption of statutes such as CERCLA. She wondered whether, outside of the long-tail claim situation, any business would have expected to obtain coverage in the manner proposed by Boston Gas.

A colloquy ensued with respect to the effect of “occurrence” language. Botsford asked whether the occurrence could take place during the policy period. Elkind responded that the “occurrence” was the causative event and not necessarily the continuing property damage. Botsford wondered whether separate wells that leaked on the site might still be one “occurrence.” Elkind agreed, noting the “conditions” language in the policy.

Botsford next raised a question with respect to the scope of the contra proferentum doctrine and asked whether the policies were manuscripted. Elkind responded that although these were not standard wordings there was no evidence of joint negotiation and it appeared that any manuscripted wording had solely been presented by INA.

Justice Spina broke in wondering “what the point” was since any resolution on the terms proposed by Boston Gas would merely necessitate a second round of complex and lengthy litigation between its insurers to resolve the issues of allocation. Elkind responded that it was not appropriate for the Court to worry about the equities of the situation and that it should solely interpret the wording of the policy.

Botsford also wondered what remedy was available to Century Indemnity. Elkind responded that it had substantial reinsurance for the amounts that it paid that might well entirely take care of its loss and that otherwise it was entitled to pursue claims for contribution and would in any event receive a set-off for settlements with the other insurers. Justice Cowin, who had been entirely silent up to that point, wondered whether Century Indemnity agreed that it had these rights. Justice Botsford noted that there would in any event be a fight about allocation in any subsequent ensuing contribution proceedings.

Wrapping up, Elkind argued that pro rata allocation should not be adopted and that in any event the extreme version proposed by Century Indemnity had only to date been followed by one state (Minnesota) and need not be followed here. Additionally, he argued that at most Boston Gas should be responsible for a single self-insured retention for the entire period of coverage.

Justice Ireland asked no questions throughout the argument. Justice Gants did not participate in the oral argument as his nomination to the SJC has not been approved by the Governor’s Council. He may yet participate in the decision, however, if his nomination is approved in January, as expected.

Based on the justices' questioning, the court does not seem satisfied with the insured's theories of "all sums" or "joint and several" liability.  On the other hand, they also do not feel that the policy wordings at issue are necessarily clear as applied to such claims.  It remains to be seen whether the SJC will follow the lead of  the New Jersey Supreme Court in developing extra-contractual rules for allocating long-tail losses or will find ambiguity due to the lack of clear policy wordings.  It is also unclear whether the court will adopt a broad standard for resolving future disputes or will simply deal with the crucial threshold question of whether allocation should be permitted to uninsured periods, leaving issues such as "collapsing bathtubs" and the like for future cases.

A decision is expected by April or May. 

2.  American & Foreigh Ins. Co. v. Jerry's Sports Center  (PA). 

On November 19, 2008, the Pennsylvania Supreme Court announced that it would accept review of American & Foreign Ins. Co. v. Jerry’s Sport Center, Inc., 948 A.2d 834 (Pa. Super. 2008) in which the Superior Court ruled that where an insurer had a contractual duty to defend, it may not recoup its defense costs later on, even if found not to owe coverage, under a theory of unjust enrichment or quantum meruit.

Jerry's Sport Center was a defendant in one of the nuisance suits that the NAACP and numerious municipalities brought against gun manufacturers, distributors and vendors a few years ago.   Royal defended under a reservation of rights but later obtained a ruling that it had no duty to defend because the NAACP case did not allege or involve “bodily injury.”   Consistent with its reservation of rights, Royal then sought to recoup the sums that it had paid in the interim to defend.

Royal's claim was accepted by the Court of Common Pleas, which found that an implied contract existed between the parties in light of the fact that the insured had accepted Royal’s defense pursuant to a reservation of rights letter that included an asserted right to recoupment of fees.  On appeal, however, the Superior Court held that such an analysis undercut the focus of the duty to defend on the possibility of coverage as distinguished from such facts as might ultimately be adjudicated. The court also took note of the fact that it was Royal’s suggestion that the insured retain independent counsel as opposed to participating in a joint defense involving multiple defendants that would have resulted in substantially lower legal costs to the policyholder. Where the insurer had a contractual duty to defend and had obtained various benefits by exercising that right to defend, the Superior Court refused to find that an implied contractual right to reimbursement existed or that the insured was unjustly enriched by the defense that Royal had provided so as to entitle Royal to reimbursement of attorney’s fees under a theory of quantum meruit.

It is heartening that the Supreme Court has accepted Royal's appeal, although it faces an uncertain fate given the fractious composition of the court and closely divided way that high profile cases such as Baumhammer's and Madison Construction have been resolved in recent years.

3.  Tanner v. Nationwide Indemnity, No. 07-0760 (TX)

And you thought that the Texas Supreme Court had emptied its insurance docket!

In this case, the court is being asked to decide whether accident victims can compel coverage for the insurer of a motorist who collided with them after driving over 100 mph in an effort to elude police.   The insured (Gibbons) was charged with using his car as a deadly weapon but later jumped bail.  His insurer (Nationwide) disclaimed coverage on the basis of an intentional acts exclusion which provides, in pertinent part, that the policy did not cover “willful acts the result of which the insured knows or ought to know will follow from his conduct.”

A decade ago, the Texas Supreme Court ruled in Trinity Universal Ins. Co. v. Cowan, 945 S.W.2d 819 (Tex. 1997) that a liability insurers had no duty to provide coverage for emotional distress claims brought by a customer against a camera store that surreptitiously copied and circulated of “candid” photos.  In Cowan, the court held that the insured's intentional acts were no “accident” as the resulting emotonal distress was the reasonable foreseeable result of these acts. The question in Tanner will be whether the same sort of analysis should apply to conduct that, while highly reckless, was not intended to cause injury and might not necessarily have resulted in injury. 

The Supreme Court heard oral argument on October 19, 2008 (the briefs and and a video and audio transcript are on the court's web site).  Press reports concerning the justices' questions have since prompted some newspapers to editorialize that the the court has gotten to friendly to the insurance industry (Lamar Homes, Frank's Casing???).

This insurance coverage dispute arose out of dumping activity by Richard Towns between 1972 and 1987. Towns operated a waste hauling business. Over time, he culled some of the debris from his business and used it to fill in a steep embankment at his house. Some of the debris was also used to fill in a swimming hole in front of the property.

Towns sold his home in 1987. Thereafter, the new owners, concerned about the fill, contacted the Vermont Attorney General’s Office which ultimately issued an order to Towns directing him to engage an environmental consultant and clean up the property.

Towns initially sought coverage for the state’s claim from Vermont Mutual, which had insured him after he sold the property in 1987. Ultimately, the Vermont Supreme Court affirmed a lower court’s ruling that the Vermont Mutual policy did not cover the loss. Towns v. Northern Security Ins. Co., 726 A.2d 65, 67 (Vt. 1999).

Thereafter, Towns sued Northern Security, which had insured him between 1983 and 1987. Northern Security disputed its claimed obligations, citing the “business pursuits” exclusion in its homeowners’ policy and contending that the loss in question had “manifested” after its policies had expired. These arguments were for the most part rejected by a state trial court in a 2007 opinion although the court declared that Northern Security was only liable for its “time on the risk” (25%) as its coverage had only been in effect for four of the sixteen years that Towns had lived there.

On appeal, the Vermont Supreme Court agreed with the trial court that the “business pursuits” exclusion did not apply. Although the debris had been generated in the course of the insured’s business, the court held that what was relevant was the dumping activity, which is subject to the non-business exception to the exclusion. This point was contested by Chief Justice Greiber, who argued in a dissenting opinion that the sheer amount and duration of the fill activity was clearly integral to the insured’s waste hauling business.

The Supreme Court also rejected Northern Security’s reliance on the “own property” exclusion. In keeping with the approach followed by most courts, the court held that groundwater contamination was a public resource and not the insured’s “own property.” The court also rejected Northern Security’s argument that because the groundwater contamination was below state action levels, it did not satisfy the policy’s requirement of “property damage.”

The court suggested, however, that the exclusion might yet apply to any costs that were solely related to the insured’s property, as distinguished from the cost of preventing third-party property damage.

The court also rejected Northern’s argument that a manifestation trigger was appropriate, declaring instead that it would follow the majority rule which applies a continuous trigger to claims of this sort where the disposal activity and resulting damage was ongoing over a period of years.
On the other hand, the Supreme Court also sustained the lower court’s decision to limit the insurer’s obligation to that portion of defense and indemnity during its “time on the risk.” The court noted that a “time on the risk” method offers several policy advantages including spreading the risk to the maximum number of carriers, providing a ready means of identifying each insurer’s liability through a relatively simple calculation and avoiding the necessity for subsequent indemnification actions between or among insurers. In cases of this sort, the court held that as the policy was self-insured, it was fair and reasonable to require the insured to bear responsibility for that portion of total defense and indemnity for which he or she chose to assume the risk.

Vermont is an unusual state within which to litigate environmental coverage issues. Unlike states in southern New England, Vermont lacks the type of heavy industry that have historically generated significant numbers of environmental claims in the past. On the other hand, insurers for the most part have been denied the opportunity to include pollution exclusions by reason of regulations followed by Vermont regulators since the early 1970s. Even so, there has been a relative dearth of clear appellate case law construing the availability of insurance coverage for such claims.

The Towns opinion may ultimately be particularly important in two respects.  First, it reenforces the growing consensus in the Northeast and New England that "all sums" has no place in insurance jurisprudence.   Although the Massachusetts SJC has a proud tradition of forging its own path without regard for the views of sister states, it is less likely to view "time on the risk" as a made up argument by insurers where allocation has been approved by the Supreme Courts of Connecticut, New Hampshire, New Jersey, New York and now Vermont.

Second, this is the rare case (Security in Connecticut being another), where a court has explicitly applied  allocation principles to the duty to defend.  As many of these cases (e.g.  ConEd, EnergyNorth) have arisen in the context of excess policies, the focus of most cases has been on insurer's claimed indemnity duties.  Towns rightly affirms that the same analysis applies to the scope of an insurer's duty to pay or reimburse defense costs.

At issue in Boston Gas Co. v. Century Indemnity Co., No. 07-1452 (1st Cir. June 10, 2008) was a jury’s award of $6 million to a gas utility for the cost of cleaning up a former production facility in Everett, Massachusetts. Despite the fact that the site was operated from 1908 to 1969, the District Court instructed the jury that Boston Gas could assign its entire loss to an individual policy issued by Century Indemnity’s predecessor and need only pay a single $100,000 SIR.. Additionally, Judge Zobel issued a declaration that Century was liable for all future cleanup costs.

On appeal, the First Circuit expressed perplexity with respect to whether Massachussets law allows such “all sums” recoveries or would require some sort of allocation. The court was not persuaded that the Appeals Court’s 1998 opinion in Rubenstein, which the District Court had relied on, was particularly persuasive, describing the Appeals Court’s analysis as “cursory.”
As a result, the First Circuit has certified three allocation questions to the Supreme Judicial Court:

1. Should long tail losses be pro rated in some manner among all insurers “on the risk” so that the sued carrier is only liable for its fractional share?

2. If some sort of pro rata liability is called for in such circumstances, what allocation method or formula should be sued?

3. If a single insurer in such circumstances is subject to liability under more than one policy and each policy has a separate deductible or self-insured retention, how many self-insured retentions must be applied?

It will be interesting to see how these issues are briefed to the SJC and, in particular, whether the court will be asked to hold that allocation should be done on a “pure time on the risk” basis (back to 1908) or merely, as the First Circuit suggests, among the period of available insurance policies. The distinction may not matter much to Century Indemnity, given the fact that, as in Con Ed many years ago, the insured had SIRs in all of the applicable policies, but it will surely have major implications in other cases in the future.

In 2006, U.S. District Court Judge Rya Zobel (who some will recall as the author of the original “manifestation” trigger opinion in Eagle Picher) ruled that Century Indemnity could be liable for the insured’s entire cost of cleaning up a polluted MGP site near Boston Harbor despite the fact that its policies had only been in effect for a brief period of the overall time when pollution occurred. The crucial issue presented by the Boston Gas appeal is whether the First Circuit will take an independent view of “pro rata” versus “all sums” or will feel constrained to affirm Judge Zobel in light of rulings of the Massachusetts Appeal Court in Rubenstein v. Royal Ins. Co., 44 Mass. App. Ct. 842, 694 N.E.2d 381 (1998), review denied (Mass. 1999) and Chicago Bridge & Iron Co. v. Certain Underwriters at Lloyds, 59 Mass. App. Ct. 646, 797 N.E.2d 424 (2003), further appellate review denied (Mass. 2004) adopting a theory of “joint and several” liability.

Massachusetts is among those jurisdictions whose highest state court has never addressed the issue of allocation. This is not for lack of opportunity. In both Chicago Bridge and Rubenstein, the insurers sought further appellate review but their requests were denied by the Supreme Judicial Court.  The court’s inaction on issues of allocation may reflect the fact that it is perfectly content with the analysis adopted by the Appeals Court.   Alternatively, as insurers might prefer, it may reflect the court’s view that neither case presented an appropriate vehicle decide this momentous issue,  given the inadequate factual record in Rubenstein and the peculiar issues of Illinois law and London Market insurance wordings considered in Chicago Bridge.

The key question presented by Boston Gas will be whether the panel feels constrained to follow the rulings of the Appeals Court or is free to make its own determinations with respect to this issue. In the complex dance between state and federal courts considering insurance issues, federal courts are bound to follow state law but are not necessarily bound to adopt the rulings of intermediate appellate courts if there are sufficient Erie “data points” that suggest to the federal court’s satisfaction that the state’s highest court would take a different view. Thus it was that between 1985 and 1990, Massachusetts insurers suffered with the Appeals Court’s declaration in Shapiro v. Public Service Mutual that pollution exclusions were ambiguous, a situation that remained unrectified until the Supreme Judicial Court weighed in in 1990 with Hazen Paper and Belleville.

On the other hand, recent coverage history is replete with cases in which state and federal courts took contradictory views of the same issues. Illinois, in particular, has been a problem in this regard as the Illinois Supreme Court and the Seventh Circuit took opposite views of the trigger of coverage in the Eljer sequence of cases. More recently, the Illinois Supreme Court concluded that TCPA claims trigger Coverage B under the CGL policy a few months after the Seventh Circuit declared that they obviously did not.

Although the First Circuit and Massachusetts courts have enjoyed a more cordial relationship over the years than other state and federal courts, it remains to be seen whether the First Circuit, even if it decides to ignore Rubenstein and Chicago Bridge, would adopt the insurer’s position in this case. Much may depend on which Judge writes the opinion. The senior jurist on the panel, Leonard Boudin, described the policyholder’s “joint and several” position as “crazy” although it also appeared that he had not yet read Chicago Bridge or Rubenstein. On the other hand, Judge Selya seemed entirely comfortable with adopting a theory of “joint and several” liability insofar as the insurer could not show that the injury occurring during its policy was somehow divisible from the overall environmental loss giving rise to the claims against Boston Gas. The third jurist, Judge Gelpi, who was only appointed to the U.S. District Court in Puerto Rico in 2006 and manifested a clear lack of understanding concerning Erie principles, gave no indication as to his views on the substantive coverage issues.

Apart from allocation, Boston Gas may also yield an interesting ruling concerning the effect of “owned property” exclusions in such cases. Massachusetts courts, like many states, ignore the owned property exclusion insofar as work is undertaken on the insured’s property to prevent or remediate off-site contamination. In this case, the U.S. District Court essentially gave an “all or nothing” instruction to the jury with the result that, having found that some of the work was necessary to remediate off-site property, the jury refused to limit the insured’s award in any respect for certain tasks that solely concerned property damage on the insured’s property. The issue on appeal, therefore, is whether even in cases where there is off-site damage, some portion of indemnity should be subject to the exclusion for tasks that are solely attributable to on-site contamination and in no way related to the prevention or remediation of off-site pollution.