A recent case, out of the Northern District of Ohio, Lockheed Martin Corp. v. Goodyear Tire & Rubber Co. (Case No. 5:10 CV 673, February 11, 2011), held that a landowner could not seek insurance coverage from the previous landowner’s insurer. 

Aetna Insurance issued to Goodyear Tire & Rubber Co the policies at issue. The policies provided Goodyear with coverage for environmental contamination. After Goodyear sold property to Lockheed, Lockheed discovered environmental contamination on the property. Apparently lacking insurance coverage of its own (or perhaps seeking additional coverage), Lockheed sought to force Aetna to cover the cost of its remediation, even though the policies were issued to previous landowner Goodyear.

Lockheed’s argument did not persuade the court that the insurance coverage should follow the chain of title, stating (and quoting Aetna’s counsel): “If Lockheed, a stranger to the insurance contracts between [Aetna] and Goodyear, were allowed to access Goodyear’s policies…Goodyear would face the probability that the policy limits which it purchased from [Aetna] would be eroded by payments to a new ‘additional insured’ — Lockheed — who did not emerge until decades after the policies had been issued.”

The court noted that Lockheed may still have recourse against Goodyear for indemnity under CERCLA. But Lockheed will have to seek contribution without the benefit of Goodyear’s insurance money!