Two industrial sites in Illinois were found to have significant amounts of groundwater contamination related to their operations. When the owner’s insurer refused to indemnify, the owner sued. The case turned on testimony from an expert witness, who was excluded by the district court because he didn’t use reliable methods.
The site owner operated two industrial facilities related to railroad. At Site I, the owner performed operations such as plating parts for locomotive engines in chrome. At Site II, the owner‘s operations included refueling diesel engines. The site owner discovered contamination at both sites.
Site I had a sump that held wastewater from the chrome plater. When the water in the sump reached a certain level, a pump would pump the water to a holding tank. The owner found a chemical called hexavalent chromium contaminating the area around the sump. At Site II, the owner discovered two types of ground-water contamination. It found a chlorinated solvent by a tank into which metal parts were dipped to degrease them. It also found diesel fuel near a large tank where locomotives would refuel.
The contamination at these two sites cost the owner millions of dollars in damages and remediation expenses. It sought indemnification from its insurer, but the owner‘s policy had an exclusion for any property damage arising out of chemical leaks or discharges. The insurance company denied coverage on this basis.
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