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Unisys Corporation v. Insurance Company of North America

154 N.J. 217, 712 A.2d 649 (1998)

ENVIRONMENTAL LIABILITY; INSURANCE—Interpretation of environmental coverage provisions of a multistate, multisite insurance policy is to be done on a site by site basis applying the law of the location of each site accordingly.

This case is a companion case to Pfizer, Inc. v. Employers Insurance of Wausau, 154 N.J. 187 (1998) and HM Holdings, Inc. v. Aetna Casualty & Surety Insurance Co., 154 N.J. 208 (1998). This is also a multistate, multisite environmental insurance coverage case. The lower court requested that the parties state their choice of law positions. The insured argued that New Jersey law applied to the issues of late notice and the pollution-exclusion clause, arguing that (a) the insured risk was foreseeably multistate, (b) the insurers did not include choice of law provisions in the policies, and (c) the two substantial sites, representing forty-three percent of the total damage, were in New Jersey. The insurers countered that either the law of the site or, alternatively, the law of New York (where the contracts were entered into) should apply.

The Court found that the analysis in this case was slightly different from that of Pfizer and HM Holdings because two of the waste sites were located in New Jersey. This meant that the first factor under Section 6 of the Restatement (Second) of Conflicts of Laws, the competing interests of the states, favored New Jersey, at least in so far as the New Jersey sites were involved. The fact that all the New Jersey sites had already been remediated did not end New Jersey’s interest. Application of New York law as to New Jersey sites would frustrate New Jersey law. On the other hand, there was no reasonable expectation that New Jersey law would apply to sites outside of New Jersey. Since there appeared to be no significant administrative difficulty in applying New Jersey law to the New Jersey sites and the law of the waste sites to the non-New Jersey sites, that was the approach to be taken.

With respect to the late-notice provisions, the competing interests of the states and the expectation of the parties also favored application of the law of the waste sites.


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