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Fuel Company Liable for Negligent Delivery

August 14, 2012 | Category: Subro News and Cases

In Nationwide Mut. Fire Ins. Co. v. Morgan Fuel & Heating Co., Inc., 2012 WL 3193590 (N.Y. App. Div. Aug. 8, 2012), a homeowner’s insurance company sued in subrogation after it paid more than $173,000 to a company specializing in environmental cleanup to remediate damage to the insured's property by removing contaminated soil. The defendant fuel company made two separate fuel oil deliveries into the insured’s underground tank only three weeks apart, not realizing the tank was low because of a leak in the tank. The theory was that the fuel company negligently deposited fuel oil into an already leaking tank. After the defendant was denied summary judgment, the appellate court reversed based on the conclusion that there was evidentiary proof that the oil tank was leaking before the allegedly negligent delivery of additional fuel and that the costs associated with the cleanup of soil contamination caused after the second delivery could not be separated from pre-second delivery soil contamination.