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Legal Watch: Volume 20
Prepared by William H. BodeCase Summary: Approximately five hundred home owners in the Riggs Park area of Washington D.C. sued Chevron U.S.A. based on the presence of gasoline below their properties. The plaintiffs asserted the contamination resulted from a discharge of gasoline from a retail gasoline outlet formerly owned and operated by Chevron. After discovery was concluded, Chevron sought to dismiss a number of the claims, including a claim for “emotional distress damages.” Before the federal court in Washington, Chevron argued that the plaintiffs were precluded from bringing a claim for negligent infliction of emotional distress because there was no accompanying physical injury, which is almost universally required to support this claim. The federal district court agreed that the failure to plead injury is fatal to a claim for intentional or negligent infliction of emotional distress but, nevertheless, permitted the claim for damages for emotional distress to stand. The court applied the law of the District of Columbia where the homeowners reside (rather than Maryland where the station was located) and found that the plaintiffs could recover damages for emotional distress under their independent trespass claim. Thus, the court ruled that the plaintiffs could recover damages for: 1) “fear and anxiety over whether plaintiffs or their families were exposed to toxic chemicals from the 15 year period when the release was discovered until 2004 when air tests showed no endangerment;” 2) “fear and anxiety over any possible diminution of the value of their homes;” and 3) “humiliation over the contaminated state of their neighborhood.”
Bode & Grenier, LLP
1150 Connecticut Ave., NW
Washington, D.C. 20036
Telephone: 202-862-4300 | Email: email@example.com
HOMEOWNERS THREATENED BY GASOLINE SPILL MAY RECOVER DAMAGES FOR EMOTIONAL DISTRESS
LESSON: This case is important because it shows a path for plaintiffs to recover possibly huge damages for emotional distress through the “back door.” While normally damages for emotional distress are not recoverable unless a physical injury is present, this case permits plaintiffs to recover them as part of a claim for “trespass.” The case instructs on the need for terminal operators to assure themselves that their secondary containment area will without question retain a major spill. Olachukwu Nnadili, et al. v. Chevron U.S.A., Inc.
TERMINAL OPERATORS ENTITLED TO COVERAGE FOR CONTAMINATION DESPITE POLLUTION EXCLUSION CLAUSE AND LATE NOTICE TO INSURANCE CARRIER
LESSON: When a release of contaminants occurred many years ago, occurrence based comprehensive liability policies may provide coverage for the clean-up and defense costs. This is true in many States even if the CGL policy has a pollution exclusion clause. Finally, terminal operators should be alert to provide notice to their insurance broker and carrier as soon as the loss is known. But a failure to provide timely notice is not necessarily fatal: the carrier must show prejudice arising from the late notice. Wolf Lake Terminals, Inc. and Tanco Terminals, Inc. v. Mutual Marine Insurance Company, et al.
PETROLEUM TRADER DENIED $600,000 DEMURRAGE THAT SUN INTERNATIONAL AGREED WAS OWING
LESSON: Contracts setting demurrage charges often have a dispute resolution provision. Terminal Operators must be vigilant when a dispute about the charges arises, and follow strictly the terms of the dispute resolution clause or risk forfeiting any claim for demurrage. Arcadia Petroleum Limited v. Sun International Limited
Please address any comments or questions to Mr. Bode at 202-862-4300 or firstname.lastname@example.org.
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