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The Collaborative Clearinghouse for Lawsuits and Other Claims Against ACE Group Insurance Companies

College Sorority Sues ACE Unit over Pollution Claim

July 2nd, 2013 - The sisters of Alpha Kappa of Alpha Chi Omega are unhappy with Century Indemnity Co. over its alleged refusal to reimburse them for costs they incurred cleaning up contaminated dirt and water surrounding their sorority house at the University of Oregon.

The sorority filed suit in Oregon state court against the ACE group unit to try to force it to pay more than $100,000 for pollution remediation. Century has since petitioned to remove the matter to U.S. District Court in Portland.

Indemnity is the successor in interest to companies that provided liability insurance coverage to the sorority. Those policies were in effect from 1980 through 1986.

At issue is a 1,000-gallon storage tank that the sorority installed on its premise in the 1950s to hold heating oil. In 1982 Alpha Kappa converted its heating source to natural gas, but left the tank in the ground and heating oil from it leaked into the soil when the tank rusted.

Leaking oil mixed with groundwater, which was collected by a sump pump and discharged into a public street in 2012. The Oregon Emergency Response System was notified and a team pumped 880 gallons of water and petroleum from the tank.

The state removed the tank and ordered the sorority to clean up the site. Further fluids were removed, as were 288 tons of contaminated soil.

Alpha Kappa said that it spent $103,653 to clean up the site. On August 28th, 2012, it tendered a demand to Century’s predecessor. Six weeks later, the ACE unit denied coverage.

The sorority said that because it held the policy during the period when the heat-source conversion was made, Century has a duty to indemnify it.

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