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PETERSEN SAND & GRAVEL, INC. v. MARYLAND CAS. CO.

January 13, 1995

PETERSEN SAND AND GRAVEL, INC., an Illinois corporation, Plaintiff,
v.
MARYLAND CASUALTY COMPANY, a Maryland corporation, Defendant.



The opinion of the court was delivered by: CHARLES P. KOCORAS

 CHARLES P. KOCORAS, District Judge:

 This matter is before the court on plaintiff's motion for judgment on the pleadings pursuant to Rule 12(c) of the Federal Rules of Civil Procedure. For the reasons set forth below, the plaintiff's motion is granted.

 BACKGROUND

 This is an insurance coverage case. The plaintiff, Petersen Sand and Gravel, Inc. ("PS&G"), brought this action against the defendant, Maryland Casualty Company ("Maryland"), alleging that Maryland breached its duties to defend and indemnify PS&G with respect to a suit brought against PS&G by the United States Environmental Protection Agency ("USEPA").

 On June 29, 1990, PS&G received a letter from the USEPA alleging, the following:

 
[USEPA] in cooperation with the Illinois Environmental Protection Agency (IEPA) conducted response actions to address contamination at the Petersen Sand & Gravel Site near Libertyville, Illinois. . . . Prior to undertaking these response actions, USEPA determined that there was a release or threatened release of hazardous substances from the Petersen Sand & Gravel Site.
 
. . . .
 
During the response, USEPA's action at the Site included a remedial investigation. Response costs associated with this Site have been incurred by the USEPA. The approximate USEPA response costs identified up to April 30, 1990, for the above referenced Site are $ 829,781.33.
 
. . . .
 
Information available to USEPA indicates among other things that you are potentially responsible for the release, or threat of release of hazardous substances from the Site. Pursuant to the provisions of Section 107(a) of CERCLA, as amended, and based on evidence currently available to the Agency, USEPA believes that you may be liable for the payment of all costs incurred by USEPA in connection with the Site.
 
. . . .

 See Complaint, Exhibit A, USEPA "PRP Letter." In January, 1991, PS&G sent a copy of the PRP letter to Maryland. On April 9, 1991 and April 18, 1991, Maryland denied coverage and refused to defend or indemnify PS&G with respect to the USEPA action. Maryland neither filed a declaratory judgment action to determine its defense obligations, nor did Maryland agree to defend PS&G under a reservation of rights.

 On September 13, 1991, USEPA filed a complaint against PS&G, seeking to recover $ 833,711.00 in response costs expended at the Libertyville Site. The USEPA complaint alleged, in relevant part, that:

 
1. . . . In this action the United States seeks to recover from defendant, Petersen Sand and Gravel, Inc., all costs it has incurred as a result of the release or threatened release of hazardous substances from a facility known as the Peterson Sand and Gravel Site ("the Site"). . . .
 
7. During the 1960's Raymond A. Petersen allowed "worked out" portions of the gravel pit to be used for the disposal of hazardous substances. Similarly, when Petersen was formally incorporated in 1970, it continued to allow the disposal of hazardous substances at the Site to take place. These ...

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