New York State Jury Returns Verdict For Policyholder In Environmental Coverage Trial

In early November, a jury found in favor of the policyholder in KeySpan Gas East Corp. v. Munich Reinsurance America Inc. et al., resolving a 17-year-old coverage dispute over pollution cleanup costs for historic manufactured gas plant sites on Long Island. Long Island Lighting Co., which sued the insurers in 1997 for coverage of a state ordered environmental remediation effort, had operated the sites since the late nineteenth century. The policies were later assigned to KeySpan Gas East Corp. After a three and a half week trial, a New York state jury concluded that KeySpan's predecessor provided timely notice to the insurer. In doing so, it rejected Century's arguments that coverage was barred by late notice and that the environmental damage to the sites was intentional or expected. The court previously had held that clean-up costs would be allocated by using a pro rata formula because the parties were unable to determine what damage occurred during the various