8.5.7 Administrative Proceedings as "Suits"

• Jurisdiction: Arizona

There is a split of authority on whether administrative proceedings by which federal and state environmental protection agencies pursue remediation constitute a "suit" within the meaning of standard CGL policies, obligating insurance companies to defend the insured throughout the administrative process. The Arizona courts have not addressed the issue.

The traditional view defines "suit" as requiring a court action of an adjudicating nature.^[350] When a broad definition of "suit" is utilized, coverage is often found. For example, the court in Fireman's Fund Insurance Co. v. Ex-Cell-O Corp.,^[351] held that coverage did not hinge upon the form of action or nature of the relief sought, "but on an actual or threatened use of legal process to coerce payment or conduct by a policy holder."^[352] The court continued, "Accordingly, I hold that a 'suit' includes any effort to impose on the policy holder a liability ultimately enforceable by a court, and the 'damages' include money spent to clean up environmental contamination."^[353]

In Avondale Industries, Inc. v. Travelers Indemnity Co.,^[35...