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RANGER INS. CO. v. SAFETY-KLEEN CORP.

February 11, 1993

RANGER INSURANCE COMPANY, Plaintiff,
v.
SAFETY-KLEEN CORPORATION, Defendant.


GOTTSCHALL


The opinion of the court was delivered by: JOAN B. GOTTSCHALL

This matter is before the court on the motion to dismiss of defendant Safety-Kleen Corporation ("Safety-Kleen"). For the reasons set forth below, the motion is granted in part and denied in part.

 BACKGROUND

 In this action, plaintiff Ranger Insurance Company ("Ranger") seeks a declaration concerning its liability under four comprehensive general liability insurance policies issued on a primary basis to Safety-Kleen and covering the time period April 1980 to October 1983. Two lawsuits have been filed against Safety-Kleen based on injuries within that period, with Ranger settling or contributing to the settlement of each suit under a reservation of rights. The declaration requested here would establish Ranger's right to reimbursement of some or all of the amounts paid toward those settlements.

 The first claim in question, which is the only one relevant to this motion, relates to a 1988 lawsuit filed against Safety-Kleen by James Junker ("Junker") and his wife, Karen Junker. In that action, Junker claimed that he contracted acute lymphatic leukemia as a result of continuous exposure to hazardous chemicals in products manufactured by Safety-Kleen. In particular, Junker complained of exposure to benzene in a solvent used to clean grease from automotive parts. The exposure occurred during Junker's employment as an automotive mechanic from 1978 or 1980 until May 1987. Ranger contributed an unspecified amount to the [*] settlement in the Junker litigation, but now asserts a number of defenses to coverage in Count I of its complaint.

 Counts II and III are pled in the alternative, should it be determined that Ranger had an obligation to indemnify Safety-Kleen in the Junker litigation. As discussed below, Safety-Kleen moves to dismiss each of these counts.

 COUNT II

 In Count II, Ranger contends that if there is coverage for the Junker litigation, each of its four policies of insurance was triggered by an occurrence within each policy period. Each of Ranger's policies provides for a deductible of $ 50,000 per occurrence subject to a $ 500,000 aggregate. Under each policy, if Ranger pays any part or all of a deductible amount to effect settlement of any claim or suit, the named insured is to reimburse it for the deductible amount paid. Cmplt., P 16. Adding up the deductibles under the policies, if there was one occurrence within each policy period, Safety-Kleen would have an obligation to reimburse Ranger $ 200,000. The reimbursement obligation would even be greater if there was more than one "occurrence" within a given policy period.

 It is fundamental that an insurer does not become obligated to its insured until a triggering event takes place within the policy's period of coverage. See Zurich Ins. Co. v. Raymark Indus., Inc., 118 Ill. 2d 23, 514 N.E.2d 150, 112 Ill. Dec. 684 (1987). The triggering event, or "occurrence," is defined in each of Ranger's policies as an "accident, including continuous or repeated exposure to conditions, which results in bodily injury or property damage neither expected nor intended from the standpoint of the insured." Cmplt., P 19. Each of Ranger's policies further provides that:

 For the purpose of determining the limit of the company's liability, all bodily injury and property damage arising out of continuous or repeated exposure to substantially the same general conditions shall be considered as arising out of one occurrence.

 The policies also provide for a $ 50,000 deductible per occurrence, which is applied as follows:

 The deductible amount applies under the Bodily Injury Liability or Property Damage Liability Coverage, respectively, to all damages because of all bodily injury or property damage as the result of any one occurrence.

 As discussed below, while it is undisputed that Junker was continuously or repeatedly exposed to Safety-Kleen's products, the parties differ in their views as to whether this exposure constitutes a single occurrence, subject to only one deductible.

 Safety-Kleen would categorize the exposure on a regular basis to hazardous chemicals resulting in Junker's sickness as a single "occurrence" under the policies' definition of that term. Although that exposure continued over a number of policy periods, Safety-Kleen posits that such exposure ...


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