Insurance Fight Prolongs Indiana Junk Yard’s Pollution

September 15, 2016

Five years of court battles haven’t resolved the blame game between a western Indiana junk yard and one of the nation’s largest insurance companies over water pollution.

Valley Forge Insurance has spent millions of dollars in an attempt to stop PCB-contaminated storm water from illegally draining from the Hartford Iron & Metal salvage yard and into city streets, sewers and waterways, The Star Press reported. Now, a group of citizens is conducting a soil sampling to determine whether the contamination has spread to nearby residential properties.

A decade ago, the Indiana Department of Environmental Management said auto fluids and other waste were mismanaged at the five-acre site. In 2009, the scrap yard agreed to remove widespread, dangerous levels of PCBs and lead in the soil and to control the runoff of storm water, but that l hasn’t happened because of the legal dispute.

U.S. District Court Judge Robert Miller Jr. wrote last month that the factual background of the legal dispute is complex.

Hartford Iron sought liability coverage from its insurer, Valley Forge, when the state environmental management department and the federal Environmental Protection Agency wanted Hartford Iron to pay penalties and remediate the site. Eventually, the insurance company agreed to pay for the cleanup of the site and to defend Hartford Iron.

In 2013, Valley Forge agreed to pay an EPA fine of more than $189,500 for the scrap yard illegally discharging PCB-contaminated storm water down the city’s storm drains and other violations. But the pollution continued. Hartford Iron notified the department last month that PCB-contaminated storm water from its gate emptied into a city sewer inlet.

Brandon Davis, a spokesman for Valley Forge parent CNA Financial Corporation, declined to comment on pending litigation.

Hartford Iron’s lawyer, Mark Shere, said the salvage yard company has been upset about the insurance company’s failure to take responsibility for halting the illegal stormwater discharges in 2012.

Meanwhile, the state environmental management department sued Hartford Iron last month for ignoring the seven-year-old agreement to clean up the site.

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