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INSURERS OF EKOTEK CLIENTS NEEDN'T PAY FOR OIL CLEANUP

The 10th U.S. Circuit Court of Appeals has upheld a federal judge's ruling that insurers of former Ekotek clients in Utah and Idaho need not pay for the oil-recycling company's cleanup.

U.S. District Judge Bruce Jenkins had made the initial decision stemming from Ekotek's $58 million Superfund mess in Salt Lake City.Both courts concluded years of routine, negligent oil-dumping could not be characterized as "sudden and accidental." Thus, insurers for the ex-Ekotek customers are off the hook because they had a "pollution exclusion" clause in their policies.

The insured include big corporations and mom-and-pop gas stations, school districts and local governments and other entities that sent used motor oil from their fleets to Ekotek in good faith. Now, they are likely to be stuck with the expense of cleanup.

Steven Self ran the troubled 6.6-acre facility from the early 1980s until the Environmental Protection Agency shut it down in 1988. Self was convicted of two federal environmental felonies and got six months in a halfway house and six months confinement in his San Diego County home.

One ex-Ekotek client, Quaker State Minit-Lube, went to court to get an order that its five insurers were responsible for its share of the cleanup expenses.

Fireman's Fund and the other four insurers dug up additional information about the willful environmental transgressions at Eko-tek.

The insurers' lawyers, including Barbara K. Berrett of Salt Lake City, using sworn statements of former Ekotek employees, told the federal courts of numerous persistent and negligent discharges of dirty oil and other substances.

Quaker State contended the spills were accidental and that the courts were ignoring insurance law in not forcing its insurance companies to cover their expenses.