X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Shortly after Pan American World Airways declared bankruptcy in 1992, Miami-Dade County notified the airline’s insurance companies that they would be held liable for soil and groundwater contamination caused by Pan Am at Miami International Airport. But the insurance companies — Associated Aviation Underwriters, United States Aviation Underwriters, Generali France Assurances and others — denied coverage and filed suit in Miami-Dade Circuit Court for a declaratory judgment relieving them of liability. The county filed a counterclaim accusing the insurance carriers of breach of contract and asking the court to back their right to pursue its claims for pollution at the Miami airport. In November 2001, Judge Amy Dean granted the summary judgment in favor of the insurance companies, ruling that the carriers were not liable for the pollution, because the county was not party to their insurance policies with Pan Am. On Monday, attorneys for the county sought to have the summary judgment reversed, arguing before the 3rd District Court of Appeal that the county had a right to pursue recovery. The suit is one of numerous court actions the county has undertaken to recover the cost of cleaning up millions of gallons of jet fuel and other contaminants that have been seeping into the airport’s property for decades. The latest estimates show it will cost $700 million to clean up pollution at the airport. Greenberg Traurig attorney Reggie Bouthillier, who is representing the county, said in an interview that Pan Am’s share of the cleanup cost is about $200 million. Elliot Scherker, a shareholder at Greenberg Traurig in Miami who also represents the county, told the three-judge panel that Pan Am’s lease agreement with the county made it clear that the county was an “additional insured” under its policies with Association Aviation Underwriters and the others. According to the lease agreements, New York-based Pan Am, which had rented facilities at the airport since 1948, was required to carry insurance with an indemnification clause taking responsibility for any damage to the property. “This was drafted in a way to protect Dade County,” Scherker told the court. In purchasing this type of insurance, Pan Am was essentially protecting the interests of its landlord, the county, Scherker argued. Even though the county was not specifically named as a party in Pan Am’s insurance policies until 1990, the nature of its relationship with the county implied that Pan Am was taking out insurance on its behalf, he said. Scherker also claimed that when the county reached a bankruptcy settlement with Pan Am in 1992, the airline assigned its insurance rights to the county. According to the settlement, the county released Pan Am of liability for any pollution caused by jet fuel spills and other contaminants, except for “claims that are recoverable from the insurance companies related to environmental damage caused by Pan Am.” But the attorney for the insurance companies, Alvin Davis, a partner at Steel Hector & Davis in Miami, disputed Scherker’s characterization of the bankruptcy settlement. He told the appellate panel that there was no language in the bankruptcy settlement that gave the county permission to pursue claims against Pan Am’s insurers. If Pan Am intended to “assign” its insurance rights to the county, it should have specifically stated that in the bankruptcy agreement, Davis said. None of the language in the settlement gave the county status as a third-party beneficiary, he said. The language in the lease agreements with the county is also clear that Pan Am was responsible for holding liability insurance only for itself, Davis said. In 1990, however, the lease agreement was changed to require Pan Am to have the county named as a party to its insurance policy — which was already required of numerous other airlines. “They later drafted a lease agreement that did have the specific language,” Davis said. “This shows it wasn’t simply an oversight but that they added it when they wanted to add it.” Davis also noted that the insurance companies were further protected by a number of “pollution exclusion” provisions that only covered Pan Am for contamination related to explosions and crashes. Pollution exclusions in other cases have been upheld by the Florida Supreme Court, he said. But the county argued that the exclusions should be voided because the insurance companies never had them reviewed by the Florida Department of Insurance, which is required under state law. Davis claimed the policies were not subject to jurisdiction of the state insurance department because they were issued to Pan Am’s headquarters in New York for operations nationwide and overseas. Third DCA Judge Gerald Cope Jr., sitting with Judges James Jorgenson and Mario Goderich, questioned whether it was reasonable to require a national company to gain approval for its insurance policy provisions from individual states. “If we accept that argument, then theoretically, they’d have to go to 50 states to get approval,” Cope said. Under the 1992 bankruptcy settlement, Pan Am agreed to pay the county $5.5 million for environmental damage to the airport. But that had nothing to do with Pan Am’s insurance companies and does not relieve them of liability, Bouthillier said. The bankruptcy settlement was reached before the county could fully assess the extent of the damage caused by Pan Am and other airlines, Bouthillier said. That’s why the county made sure its right to pursue claims under Pan Am’s insurance policies was preserved under the bankruptcy settlement, he said. “The bottom line is, they don’t want to pay anything, which is typical of insurance companies,” Bouthillier said.

This content has been archived. It is available exclusively through our partner LexisNexis®.

To view this content, please continue to Lexis Advance®.

Not a Lexis Advance® Subscriber? Subscribe Now

Why am I seeing this?

LexisNexis® is now the exclusive third party online distributor of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information.

ALM's content plays a significant role in your work and research, and now through this alliance LexisNexis® will bring you access to an even more comprehensive collection of legal content.

For questions call 1-877-256-2472 or contact us at [email protected]

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.