Aeroquip Corporation v. Aetna Casualty and Surety Company, Inc.

Aeroquip Corporation brought this action against Aetna Casualty and Surety Company, Inc., seeking a declaration that certain Aetna insurance policies cover cleanup costs resulting from a leak in an underground fuel tank. Each policy excluded coverage for pollution, but some policies contained an exception to the exclusion for “sudden and accidental” pollution. The district court granted summary judgment in favor of Aetna. We conclude that Aeroquip, acting as the policyholder, had the burden of proving the exception to the exclusion and we therefore affirm.

Facts

In 1979, Aeroquip leased certain real property to Brasher Brothers, Inc. Soon thereafter, Brasher Brothers installed a 12,000 gallon underground diesel fuel tank. The tank was connected to an island with a pump, as at a gas station. During the period of this lease, Brasher Brothers was insured under a series of comprehensive general liability policies issued by Aetna.

In 1986, Aeroquip hired an environmental consulting firm to remove the tank. The consultants discovered that approximately 7,500 gallons of diesel fuel had leaked into the soil. The cause and time of the leak, which apparently was in the plumbing between…