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

COFFEYVILLE RESOURCES REFINING & MARKETING, LLC v. LIBERTY SURPLUS INSURANCE CORPORATION et al

ATTENTION: It is possible that this information may no longer be current and therefore may be inaccurate. The index contains both open and closed cases and is not a complete list of cases in which an ACE Insurance Group company is involved. This information is provided to give interested persons an idea of the issues disputed in the indexed cases. For a full understanding of a case, one should read the rest of the court file, including the response. For the most up-to-date and complete information on a case, visit www.pacer.gov or contact the clerk of the relevant court.

Case Number: 
6:08-cv-01204 Search Pacer
Opposing Party: 
Coffeyville Resources Refining & Marketing, LLC
Court Type: 
Federal
US District Court: 
District of Kansas 
Date Filed: 
Jul 10 2008

"COUNT I
BREACH OF ENVIRONMENTAL INSURANCE CONTRACTS BY LSI AND ILLINOIS UNION

29. On July 16, 2007, Coffeyville Resources provided LSI with formal notice of the flood, the oil spill, and LSI's responsibility to provide pollution coverage. Coffeyville Resources thereafter made demand on LSI for its policy limits. On November 7,2007, LSI denied liability beyond its policy sub-limit of $10,000,000 for "clean-up," upon the contention that all oil spill losses caused by Coffeyville Resources could potentially be cleaned up, hence were subject to the policy sub-limit.

30. Independent of the alleged sub-limit, LSI is responsible to Coffeyville Resources up to the limits of the LSI policy coverage for all: " . . . sums the 'Insured' becomes legally obligated to pay for 'loss' arising from 'claims' for 'bodily injury' or 'property damage' caused by 'pollution conditions' at or emanating from a 'covered location'."

31. LSI's denial of its remaining policy coverage was "without just cause or excuse," such that LSI is statutorily liable to pay the attorney fees expended by Coffeyville Resources for recovery herein pursuant to K.S.A. 40-256.

32. LSI is also responsible to pay ten percent (10%) per annum interest on the claim proceeds due Coffeyville Resources from the date of notice of the claims, pursuant to K.S.A. 16-201.

33. Illinois Union was also provided with the notices and information described above. However, Illinois Union denied all liability under its policy, contending the losses sustained by Coffeyville Resources were precluded by the LSI sub-limit of $10,000,000 for "clean-up," by adopting LSI's argument that the losses could potentially be cleaned up.

34. Illinois Union is liable to Coffeyville Resources upon the same contractual provisions and statutory obligations described above for LSI, such that Illinois Union should pay Coffeyville Resources Illinois Union's policy limits of $25,000,000, additional attorney fees pursuant to K.S.A. 40-256, and an additional 10% per annum interest pursuant to K.S.A. 16-201.

COUNT II
BREACH OF COMPREHENSIVE GENERAL LIABILITY INSURANCE CONTRACTS BY NATIONAL UNION AND WESTCHESTER

35. The National Union CGL Umbrella policy provided coverage for "Bodily Injury or Property Damage arising out of any discharge, disbursal, seepage, migration, release or escape of Pollutants that . . . was abrupt and neither expected nor intended by the Insured." (End. No. 28.) Section IV.G.(1), as modified by Endorsement No. 3 of the National Union policy, provided that the $25,000,000 in policy coverage would apply as "the total applicable limits of applicable Other Insurance are reduced or exhausted." To the extent that the $10,000,000 "clean-up" sub-limit coverage appropriately limits coverage under the LSI and Illinois Union policies, National Union should be required to fully indemnify Coffeyville Resources' liability and losses, because National Union's CGL coverage will "continue in force as underlying coverage." (Id.) Stated differently, if the $10,000,000 sub-limit applies as LSI contends, National Union's CGL coverage will drop down to indemnify the next $25,000,000 of losses incurred after the policy limits of the LSI and Illinois Union coverages are exhausted. National Union's coverage commences when the LSI and Illinois Union coverages are exhausted, whether such exhaustion occurs due to the policies' total limits or their sub-limits of coverage.

36. On July 16,2007, Coffeyville Resources provided National Union with formal notice of the flood, the oil spill, and National Union's pollution coverage responsibility. On November 19,2007, Coffeyville Resources made demand on National Union for the policy limits. On December 4, 2007, National Union denied liability, contending that National Union had no obligation to respond in damages until the entire aggregate limits of the LSI and Illinois Union policies were exhausted, and that those limits were not yet exhausted.

37. Any judgment in favor of Coffeyville Resources and against National Union will automatically result in an additional award of Coffeyville Resources' attorney fees for services and expenses pursuant to K.S.A. 40-908, because the National Union policy also provides property insurance for losses caused by fire, tornado, lightning or hail.

38. National Union's denial of remaining insurance coverage was "without just cause or excuse," such that National Union is statutorily liable to pay the attorney fees expended by Coffeyville Resources for recovery herein pursuant to K.S.A. 40-256.

39. National Union is also responsible to pay ten percent (10%) per annum interest on the claim proceeds due Coffeyville Resources from the date of notice of the claims, pursuant to K.S.A. 16-201.

40. Westchester was also provided with the notices and information described above, but Westchester denied all liability under its CGL Policy, upon the same arguments provided by National Union, contending Westchester's insurance responsibilities would not commence until complete payment of the policy limits by National Union.

41. Westchester is liable to Coffeyville Resources upon the same contractual provisions and statutory obligations described above, such that Westchester should pay Coffeyville Resources the appropriate loss indemnification, attorney fees and expenses pursuant to K.S.A. 40-908 and K.S.A. 40-256, and 10% per annum interest from the date of claim pursuant to K.S.A. 16-201.

WHEREFORE, Plaintiff, Coffeyville Resources, prays for judgment in an amount in excess of $50,000,000, for its costs, expenses, attorney fees pursuant to K.S.A. 40-908 and K.S.A. 40-256, for interest pursuant to K.S.A. 16-201, for a declaration that all postjudgment oil release losses shall be indemnified in a manner consistent with the Court's legal and factual determinations, and for such other and further relief as the Court deems just and equitable from LSI, Illinois Union, National Union and Westchester."

The provided text is an excerpt from a document filed in this case. For a full understanding of the case, one should read the complete court file, including the response.

Javascript is required to view this map.