Fairmount Park sues insurance company for defense in horse manure contamination complaint

Bethany Krajelis Aug. 2, 2012, 1:29am


An environmental contamination complaint over horse manure and trash dumped on land purchased for the development of a St. Clair County subdivision has spurred an insurance coverage dispute in federal court.

In May, Fairmount Park Inc. filed a lawsuit in St. Clair County Circuit Court against Travelers Indemnity Company, seeking both a defense and indemnification in a citizen enforcement action brought before the Illinois Pollution Control Board (IPCB) over the alleged contamination.

The suit, which was removed to federal court earlier this month, stems from a complaint that Caseyville Sport Choice, the developer of the subdivision, filed with the ICPB in 2007 against Irma Seiber and the estate of her late husband, James Seiber.

The Seibers operated a business that had a contract with the Collinsville race track to haul away its horse manure and trash. The ICPB complaint claims that from about 1981 to 1993, the Kentucky couple dumped about 159,000 tons of horse manure and 2,600 tons of trash from the race track on three parcels of land in St. Clair County.

In 2004, the Seibers sold these parcels of land to Caseyville Sport Choice, which said in its IPCB complaint that it became aware of the "huge amount" of horse manure and trash on the land while developing it for a subdivision.

Caseyville claims it spent more than $4.5 million to clean up the land and obtain an Environmental No Further Remediation Order from the Illinois Environmental Protection Agency.

The developer added Fairmount Park as a defendant in its contamination complaint in 2008, claiming that Fairmount Park caused or allowed manure from its race track to be dumped on the land the Seibers sold in violation of environmental laws.

The ICPB website shows that the contamination complaint remains pending and that a status conference in the matter took place on July 18.

An order from the hearing officer at the conference made note of Fairmount Park's lawsuit seeking insurance coverage from Travelers. It also listed E.R. 1 LLC as an assignee of Caseyville Sport Choice.

According to the lawsuit filed in St. Clair County in May, Travelers denied Fairmount Park's request for coverage in October 2011 because Fairmount Park is the successor in interest to Ogden Fairmount.

Fairmount contends in its lawsuit that as Ogden Fairmount's successor in interest, it was insured at all times relevant to the action under general liability policies issued by Travelers to Ogden Fairmount.

The lawsuit also notes that Ogden Fairmount, not Fairmount Park, had entered into the contract with the Seibers to remove its manure and trash, which were supposed to be deposited at a dump in compliance with environmental laws with a portion of the manure to be used at James Seiber's discretion as fertilizer on his land.

Fairmount Park objected in writing to Travelers' denial and renewed its request, which the insurance company denied again in February.

In its lawsuit, Fairmount Park contends that its policies with Travelers provide $2 million in coverage for property damage and $2 million for personal injury.

The ICPB action seeking reimbursement for clean-up costs alleging injury to tangible property, which Fairmount Park asserts is covered under its insurance policy with Travelers.

Last week, Travelers filed a notice of removal in the U.S. District Court for the Southern District of Illinois to move the case from the St. Clair County Circuit Court to federal court in East St. Louis nearly. And on July 30, the insurance company filed an answer to Fairmount's complaint.

In its answer, Travelers denied several of Fairmount's allegations, pointing to its denial letter and conditions of its policies, "which speak for themselves." The insurance company also offered 37 additional defenses in its answer and asked for a jury trial in the matter.

Among the defenses included in the answer, Travelers contends that coverage is barred because Fairmount failed to meet and perform all conditions and obligations under the policies.

It also asserts that coverage of any form of injury, damage, liability or loss arising out of or related to environmental contamination is excluded by pollution exclusions in the policies and as such, has no obligation to defend or indemnify Fairmount in connection with the environmental contamination action.

St. Louis attorney Beth Boggs filed the lawsuit on behalf of Fairmount Park.

Attorney Deborah Druley, also of St. Louis, filed Travelers' response to the suit.

Messages left with both attorneys were not immediately returned.

The citation for the federal lawsuit is 12-CV-827.

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