Cotter Corporation, Petitioner v. American Empire Surplus Lines Insurance Company; Great American Insurance Company…

Summary

The court held that qualified pollution exclusions turn on whether the insured expected or intended contaminants to migrate off its property or into groundwater, not merely whether it expected seepage or intended an initial discharge. Because the underlying complaints alleged potentially covered negligence and strict-liability claims, the primary insurers had a duty to defend, and conflicting evidence about Cotter's expectations precluded summary judgment on indemnity. The court affirmed that the excess policies imposed no duty to defend because they expressly disclaimed one.