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|Thursday, November 19, 1992
Orange County Edition
Court Orders Insurer to Pay for Cleanup; Ruling:
Panel says Farmers is liable for fuel-leak work, despite
its policy provision that excludes pollution.;
By: MARK I. PINSKY
A jury found that Chuchua's business insurance, which included earthquake coverage, also contained a provision excluding payment for pollution damage. Orange County Superior Court Judge William F. Rylaarsdam then ruled that the insurer was not responsible for the cleanup because of the provision.
But the appellate court reversed, ruling that because the seepage was the result of an earthquake, the cleanup costs should be paid by the insurer. The appeals court ordered the case returned to Superior Court to decide how much money Farmers has to pay.
Terry L. Kelly, Chuchua's attorney, said that the
appeals court ruling sends a message to insurers that, in
such cases, they will have to pay claims "no matter
how many pollution exclusion endorsements they attach to
Copyright (c) 1992 Times Mirror Company
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