Carlton Fields Jorden Burt
Scott C. Shine
July 24, 2014
Like many other federal and state environmental laws, Washington’s Model Toxics Control Act (MTCA) exposes property owners to strict liability, regardless of fault or intent, for certain types of environmental contamination. Twenty years ago, in Weyerhaeuser Co. v. Aetna Cas. & Surety Co., 874 P.2d 142 (Wash. 1994), the Supreme Court of Washington held that a property owner’s efforts to remediate polluted sites triggers a liability insurer’s duty to indemnify the owner, even where the government has not yet taken formal action against the insured. Weyerhaeuserleft open the question of whether a voluntary clean-up, undertaken to avoid strict liability, also triggers the insurer’sduty to defend. Although, in most circumstances, the duty to defend is actuated before the duty to indemnify, a Washington appellate court held, in Gull Industries, Inc., v. State Farm Fire and Casualty Co. of NY, 69569-0-1 (Wash. App. Ct. June 2, 2014), that an insurer has no duty to defend where the government has not issued “an explicit or implicit threat of immediate and severe consequences.’
The Petroleum Leak and the MTCA
In 1984, Gull Industries discovered a release of petroleum product into the soil adjacent to one of its gas stations, and it undertook a voluntary remediation of the soil and groundwater. In 2005, under the MTCA, Gull reported the leak and the clean-up to Washington’s Department of Ecology (“DOE”). The DOE responded by letter, stating that Gull’s report had revealed levels of contamination that required action, that the DOE had “placed the property … with an ‘Awaiting Cleanup’ status,” and that the plaintiff should “be aware that there are requirements in state law which must be adhered to.” The response did not cite any specific state laws or identify any consequences for failure to comply.