Partial Summary Judgment Secured for Sunoco, Inc. Against Illinois National Insurance Company

On July 27, 2005, the U. S. District Court for the Eastern District of Pennsylvania granted Sunoco's Motion for Partial Summary Judgment against Illinois National Insurance Company (INI), ordering INI to reimburse Sunoco's past defense and investigation costs in connection with the MtBE Suits.  Further, the District Court ruled that INI's obligation to defend and/or reimburse would continue until such time as INI's policy limits were exhausted.

INI issued a manuscript insurance policy to Sunoco that provided a $250,000 per occurrence self-insured retention amount and a $5 million aggregate self-insured retention amount.  Sunoco, faced with some seventy lawsuits claiming damage to groundwater arising from Sunoco's MtBE products, had paid over $5 million in defense in the aggregate for these lawsuits, but had not paid in excess of $250,000 for defense costs for any single lawsuit.  Sunoco brought a motion for partial summary judgment claiming that its payments had triggered INI's duty to defend. 

At issue on this motion was whether each of the underlying claims faced by Sunoco were single or separate occurrences.  The District Court determined that Pennsylvania law was applicable; the underlying MtBE lawsuits constituted a single occurrence; that Sunoco had paid $5,250,000, an amount in excess of its self-insured retention and, accordingly, the INI policy was triggered.  On October 11, 2005, the District Court rejected INI's motion for reconsideration on the choice of law ruling.