The Michigan Sixth Circuit Court of Appeals was continuing to hear the case between PSI and Wausaw Insurance, trying to determine who was the guilty party for the old Peters Road site's deplorable condition. Wausaw, since it was the insuring company, appeared to be the one at fault. not PSI, as the public had thought.
Paperwork presented at the proceedings was noteworthy, as PSI did some diligent research to cover themselves wherever possible. For example, from 1956 to 1967 the policy was worded for coverage only "caused by accident." In 1967, it was reworded to coverage only "caused by occurrence," which they believed was a completely different policy provision. Reading the fine print turned up more details: the policies did NOT cover insurance for dischargers, dispersals, release or escape of smoke, vapors, soot, fumes, acids and other toxic chemicals. But if these conditions came as a result of an accident and caused property damage, Wausaw definitely appeared to be the responsible one.
PSI therefore, on the basis of this evidence, asked for a partial summary judgment on March 2, 1992. The other companies involved were opposed. On April 24, 1992, the Sixth Circuit Court ruled against PSI in this judgment, not completely convinced with PSI's side of the story. PSI needed to prove to the court that these conditions were "sudden" and "accidental," basically having the burden of proof showing all the contaminated soil and rotted property left behind became that way "overnight." It could have looked like a lost battle, but PSI decided to appeal. Any remedial action on the land was still on hold throughout.
Paperwork presented at the proceedings was noteworthy, as PSI did some diligent research to cover themselves wherever possible. For example, from 1956 to 1967 the policy was worded for coverage only "caused by accident." In 1967, it was reworded to coverage only "caused by occurrence," which they believed was a completely different policy provision. Reading the fine print turned up more details: the policies did NOT cover insurance for dischargers, dispersals, release or escape of smoke, vapors, soot, fumes, acids and other toxic chemicals. But if these conditions came as a result of an accident and caused property damage, Wausaw definitely appeared to be the responsible one.
PSI therefore, on the basis of this evidence, asked for a partial summary judgment on March 2, 1992. The other companies involved were opposed. On April 24, 1992, the Sixth Circuit Court ruled against PSI in this judgment, not completely convinced with PSI's side of the story. PSI needed to prove to the court that these conditions were "sudden" and "accidental," basically having the burden of proof showing all the contaminated soil and rotted property left behind became that way "overnight." It could have looked like a lost battle, but PSI decided to appeal. Any remedial action on the land was still on hold throughout.
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Twenty-five years after the closure of a small oil refinery on Brownstown's south end, a Michigan Department of Natural Resources examination of the Peters Road property unearthed nightmares not unlike those witnessed by residents of Niagara Falls, New York and the nearby Love Canal, which most likely inspired the modern environmental movement.
Petroleum Specialties Incorporated (PSI) owned sixty acres of land near the triple borders of Brownstown, Flat Rock and Woodhaven. Right across Peters Road by a block was the expanding Deerfield Estates trailer park. Residents of Deerfield resembled their counterparts in New York in various ways, meaning they had no idea the conditions on a neighboring property were more toxic than those found earlier in the decade at the BASF South Works property, for instance. PSI had been an active oil refinery from sometime in the 1930s until 1964. Upon ceasing as an active refinery, it became a storage facility. Evidentally, the land was tossed aside as a figurative afterthought since at least the early 1970s, as the conditions found by the M-DNR were repulsive enough.
The inspection took place on June 15, 1989. Inside were a total of 38 bulk tanks, enough to handle 17 million gallons of oil... provided it stayed in the bulk tanks. The M-DNR found an open lagoon of petroleum, high PCB counts in the soil, asbestos construction material, leaking electrical transformers, lead, arsenic, cyanide, benzene, and rotting storage drums containing Xylene and Toluene. A suit was filed by the M-DNR immediately after this inspection, with a hoped-for answer coming quickly from the property's owner. In the meantime, all nearby residents could do was be patient for progress. Undoubtedly, this was not accomplished without a great deal of fear.
The year 1991 would become increasingly problematic for residents at Flat Rock's Deerfield Estates and areas surrounding the abandoned PSI Plant on Peters Road. It had been over sixteen months since the initial exploration by the Michigan DNR had unearthed serious chemical pollution of the grounds, which had been unchecked for decades. Finally, the M-DNR penned a "Potentially Responsible Party" (PRP) letter, dated January 8, appealing for the ownership to take corrective action, seal any leaks and clean up the grounds. No response or cooperation was forthcoming.
In July, the M-DNR sent another notification, an "Administrative Order for Response Activity," dated July 28. This letter asked for a cooperative incorporation of a specific remediation plan for the PSI site. Once again, PSI refused to either answer or comply. Stress levels in the nearby communities continued to rise. Finally on November 7, the M-DNR officially filed suit in the Michigan State Court, believing they would eventually gain the winning hand.
PSI, however, had been doing some homework behind the scenes in order to defend their position, which was as yet unclear to the public. Were they proactive or not? Lead by their owner, Marvin Fleischman, the company began seeking defense and indemnification from their insurers. Zurich Insurers had been the company's insurance agency from 1951 to 1956, while a firm named Wausaw oversaw PSI's insurance from 1956 to 1985. Neither firm wanted anything to do with this, and they took no action to cooperate. In a declaratory judgment action dated August 20, both insurers claimed they had no duty to defend PSI despite its requests. PSI then countersued Wausaw - its most recent insurer - on October 2. The case now had PSI and Zurich as partners in the suit. Nothing was getting accomplished as far as cleanup; everyone's hands were tied on a legal front until the court could make a decision.
The Michigan Sixth Circuit Court of Appeals was continuing to hear the case between PSI and Wausaw Insurance, trying to determine who was the guilty party for the old Peters Road site's deplorable condition. Wausaw, since it was the insuring company, appeared to be the one at fault. not PSI, as the public had thought.
Paperwork presented at the proceedings was noteworthy, as PSI did some diligent research to cover themselves wherever possible. For example, from 1956 to 1967 the policy was worded for coverage only "caused by accident." In 1967, it was reworded to coverage only "caused by occurrence," which they believed was a completely different policy provision. Reading the fine print turned up more details: the policies did NOT cover insurance for dischargers, dispersals, release or escape of smoke, vapors, soot, fumes, acids and other toxic chemicals. But if these conditions came as a result of an accident and caused property damage, Wausaw definitely appeared to be the responsible one.
PSI therefore, on the basis of this evidence, asked for a partial summary judgment on March 2, 1992. The other companies involved were opposed. On April 24, 1992, the Sixth Circuit Court ruled against PSI in this judgment, not completely convinced with PSI's side of the story. PSI needed to prove to the court that these conditions were "sudden" and "accidental," basically having the burden of proof showing all the contaminated soil and rotted property left behind became that way "overnight." It could have looked like a lost battle, but PSI decided to appeal. Any remedial action on the land was still on hold throughout.
Marvin Fleischman and PSI representatives were not satisfied with the verdict handed down in April, to say nothing of Zurich Insurance's new bid for a total summary judgment against PSI. This, however, would be struck down by the court, as they requested more of a judgment than PSI had. Despite Zurich insinuating that the conditions at the Peters Road facility were "no accident," Zurich's reach for damages was going too far. In this case, PSI was only seeking insurance coverage for the bad soil that would need to be unearthed and hauled away to clean up the property.
Nearby residents were more jittered to find out that PSI admitted dumping and storage of materials on-site was still going on, despite the fact many residents thought all operations had stopped. The Michigan DNR mentioned the soil was indeed damaged long-term. However, if it could be proven that the soil damage came from an accident that occurred on-site anytime between 1951 and 1956 (when PSI changed insurers), PSI might still end up on the winning side of things by obtaining retroactive coverage.
PSI presented that they were aware of a "series of discreet releases" via a defective condenser box and leaky valves & pipes between 1951-1956. Although these alone did not cause the extreme conditions currently at the site, the court ruled these occurrences were not "miniscule by nature." The Court tried to dismiss the case as such. Zurich's only available plan was to attempt and prove malicious intent with these releases in order to continue this wild case.
Petroleum Specialties Incorporated (PSI) owned sixty acres of land near the triple borders of Brownstown, Flat Rock and Woodhaven. Right across Peters Road by a block was the expanding Deerfield Estates trailer park. Residents of Deerfield resembled their counterparts in New York in various ways, meaning they had no idea the conditions on a neighboring property were more toxic than those found earlier in the decade at the BASF South Works property, for instance. PSI had been an active oil refinery from sometime in the 1930s until 1964. Upon ceasing as an active refinery, it became a storage facility. Evidentally, the land was tossed aside as a figurative afterthought since at least the early 1970s, as the conditions found by the M-DNR were repulsive enough.
The inspection took place on June 15, 1989. Inside were a total of 38 bulk tanks, enough to handle 17 million gallons of oil... provided it stayed in the bulk tanks. The M-DNR found an open lagoon of petroleum, high PCB counts in the soil, asbestos construction material, leaking electrical transformers, lead, arsenic, cyanide, benzene, and rotting storage drums containing Xylene and Toluene. A suit was filed by the M-DNR immediately after this inspection, with a hoped-for answer coming quickly from the property's owner. In the meantime, all nearby residents could do was be patient for progress. Undoubtedly, this was not accomplished without a great deal of fear.
The year 1991 would become increasingly problematic for residents at Flat Rock's Deerfield Estates and areas surrounding the abandoned PSI Plant on Peters Road. It had been over sixteen months since the initial exploration by the Michigan DNR had unearthed serious chemical pollution of the grounds, which had been unchecked for decades. Finally, the M-DNR penned a "Potentially Responsible Party" (PRP) letter, dated January 8, appealing for the ownership to take corrective action, seal any leaks and clean up the grounds. No response or cooperation was forthcoming.
In July, the M-DNR sent another notification, an "Administrative Order for Response Activity," dated July 28. This letter asked for a cooperative incorporation of a specific remediation plan for the PSI site. Once again, PSI refused to either answer or comply. Stress levels in the nearby communities continued to rise. Finally on November 7, the M-DNR officially filed suit in the Michigan State Court, believing they would eventually gain the winning hand.
PSI, however, had been doing some homework behind the scenes in order to defend their position, which was as yet unclear to the public. Were they proactive or not? Lead by their owner, Marvin Fleischman, the company began seeking defense and indemnification from their insurers. Zurich Insurers had been the company's insurance agency from 1951 to 1956, while a firm named Wausaw oversaw PSI's insurance from 1956 to 1985. Neither firm wanted anything to do with this, and they took no action to cooperate. In a declaratory judgment action dated August 20, both insurers claimed they had no duty to defend PSI despite its requests. PSI then countersued Wausaw - its most recent insurer - on October 2. The case now had PSI and Zurich as partners in the suit. Nothing was getting accomplished as far as cleanup; everyone's hands were tied on a legal front until the court could make a decision.
The Michigan Sixth Circuit Court of Appeals was continuing to hear the case between PSI and Wausaw Insurance, trying to determine who was the guilty party for the old Peters Road site's deplorable condition. Wausaw, since it was the insuring company, appeared to be the one at fault. not PSI, as the public had thought.
Paperwork presented at the proceedings was noteworthy, as PSI did some diligent research to cover themselves wherever possible. For example, from 1956 to 1967 the policy was worded for coverage only "caused by accident." In 1967, it was reworded to coverage only "caused by occurrence," which they believed was a completely different policy provision. Reading the fine print turned up more details: the policies did NOT cover insurance for dischargers, dispersals, release or escape of smoke, vapors, soot, fumes, acids and other toxic chemicals. But if these conditions came as a result of an accident and caused property damage, Wausaw definitely appeared to be the responsible one.
PSI therefore, on the basis of this evidence, asked for a partial summary judgment on March 2, 1992. The other companies involved were opposed. On April 24, 1992, the Sixth Circuit Court ruled against PSI in this judgment, not completely convinced with PSI's side of the story. PSI needed to prove to the court that these conditions were "sudden" and "accidental," basically having the burden of proof showing all the contaminated soil and rotted property left behind became that way "overnight." It could have looked like a lost battle, but PSI decided to appeal. Any remedial action on the land was still on hold throughout.
Marvin Fleischman and PSI representatives were not satisfied with the verdict handed down in April, to say nothing of Zurich Insurance's new bid for a total summary judgment against PSI. This, however, would be struck down by the court, as they requested more of a judgment than PSI had. Despite Zurich insinuating that the conditions at the Peters Road facility were "no accident," Zurich's reach for damages was going too far. In this case, PSI was only seeking insurance coverage for the bad soil that would need to be unearthed and hauled away to clean up the property.
Nearby residents were more jittered to find out that PSI admitted dumping and storage of materials on-site was still going on, despite the fact many residents thought all operations had stopped. The Michigan DNR mentioned the soil was indeed damaged long-term. However, if it could be proven that the soil damage came from an accident that occurred on-site anytime between 1951 and 1956 (when PSI changed insurers), PSI might still end up on the winning side of things by obtaining retroactive coverage.
PSI presented that they were aware of a "series of discreet releases" via a defective condenser box and leaky valves & pipes between 1951-1956. Although these alone did not cause the extreme conditions currently at the site, the court ruled these occurrences were not "miniscule by nature." The Court tried to dismiss the case as such. Zurich's only available plan was to attempt and prove malicious intent with these releases in order to continue this wild case.
