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Court Refuses to Rehear Insurance Stacking Case

(CN) - A California appeals court denied the state's request for a rehearing on a ruling that allowed it to "stack" insurance coverage limits across policy periods in the $700 million cleanup of the Stringfellow hazardous waste site in Riverside County.

In the mid-1950s, California used an old quarry as a hazardous waste dump. After releasing 30 million gallons of industrial waste into unlined ponds, the bedrock was found to have fractures leading to an underground stream, while flooding in the 1960s and 1970s caused a plume of toxic chemicals to extend several miles from the site.

The Stringfellow waste site was closed in 1972. Several court decisions since 1993 adjudicated responsibility for the environmental cleanup, which could run from $50 million to $700 million.

In denying the rehearing, 4th Appellate District Court of Appeal also slightly modified wording relating to improper admission of a lost policy, and officialized publication of a section upholding multiyear versus annual application of a policy.

The opinion rejected FMC Corp. v. Plaisted & Companies, decided by the same court in 1998, which prevented limits from being added up across policy periods.

The unexpected denial of review perpetuates a split on the stacking issue within the appeals court and is viewed as generally favorable for policyholders, since it allows access to all coverage, under all policies and for all years available.

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