The opinion of the court was delivered by: GLENN E. MENCER
In 1973, American Guarantee, an insurance company located in Chicago, Illinois, issued a policy to United Brass that provided comprehensive general liability insurance. United Brass had purchased the policy through an insurance agent, John Hawkins of the Greensboro Insurance Agency, Greensboro, North Carolina. Mr. Hawkins' stamped signature appears on the policy, and the policy was presumably delivered to Mr. Hawkins, who countersigned the policy in North Carolina. At that time, United Brass, a North Carolina corporation, had its principal place of business and a manufacturing plant in Randleman, North Carolina. The American Guarantee insurance policy provided coverage for the facility in Randleman, North Carolina, and for two other United Brass warehouse and sales facilities in California and in New York. On January 27, 1975, United Brass purchased the assets of Keystone Brass Works. In October 1975, the parties agreed to include the former Keystone Brass facility located in Erie, Pennsylvania, as an insured risk on the American Guarantee policy. The American Guarantee policy was effective until January or February of 1976, when another insurer's policy became effective. Hawkins dep. at 73.
Since 1975, the Keystone foundry has employed a process involving molds formed from sand to produce manufactured cast brass valve components. Keystone uses brass alloys that contain primarily copper, tin, lead, and zinc. During the casting process, microscopic metal particles adhere to the molding sands. After a number of uses, the molding sands become suffused with these particles and can no longer be used as molds. Keystone then has an outside party pick up this used sand to haul it away.
During the first three months of 1975, Keystone employed Sitter Trucking Company to transport the waste sand away from its facility. In April 1975, Max Silver & Sons offered to haul away the sands for free. Mr. Silver believed that the sands contained valuable metals that could be recovered and that the profit gained from recovering metals would justify his bearing the expense of hauling the sand.
The record indicates that silver hauled the waste sand to the Millcreek Dump Site, located in the outskirts of Erie.
There is, however, no record of which particular dates or on how many occasions Silver came to take the waste away. Silver continued to haul the waste away until 1981, when Independent Iron & Metal Company began to transport the sand away, also to the Millcreek site.
In August 1980, the Pennsylvania Department of Environmental Resources notified Albert Fuchs, the lessee of the Millcreek site, that his use of the property as a slag dumpsite without a permit was illegal. In August 1983, the United States Environmental Protection Agency (EPA) gave notice to Ralph Riehl, the owner of the site, that it was planning a clean-up of the site based on testing that it had conducted. Riehl v. Travelers Ins. Co., 772 F.2d 19, 21 (3d Cir. 1985). On April 18, 1985, the EPA wrote to the Keystone Foundry Division of United Brass and requested information concerning Keystone's involvement with the site. On October 16, 1989, the EPA filed a civil action against several parties it considered responsible for the site. On January 4, 1990, United Brass was joined as a third-party defendant by certain of the defendants.
The insurance policy at issue, a "Special Multi-Peril Insurance Policy," provides comprehensive general liability insurance to United Brass. The policy states:
An "occurrence" is defined as:
. . . an accident, including injurious exposure to conditions which results, during the policy period, in bodily injury or property damage neither expected nor intended from the standpoint of the insured.
American Guarantee contends that the facts of this case do not indicate that there has been an "occurrence" within the period that the policy was effective and that it has no duty to defend or to indemnify United Brass. United Brass ...