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California wastewater company loses case against insurer which refused to pay full costs after explosion

21 December 2017

A California appellate court ruled on December 20 in favour of an insurance company in its battle with a wastewater facility that was storing hazardous materials on its site when a major explosion occurred there in 2014. The court affirmed a lower court ruling that held Allied Insurance was within its rights when it withheld $2.5 million from Santa Clara Waste Water.

Stock image
Stock image reported that Allied paid Santa Clara $2.5 million, less than half of the policy’s limit, because it said the company violated the policy by concealing the fact it was illegally harbouring hazardous materials on site.

Santa Clara Waste Water is a private wastewater processing company based in Santa Paula, California. In 2014, a huge explosion at the plant resulted in injuries to several of the plant’s employees and three firefighters, prompting criminal charges and civil lawsuits.

Several of the criminal charges related to the company’s storage of barrels and drums of sodium hydroxide, a chemical known as “Petromax,” on its facility site.

Santa Clara Waste Water contends the chemical is not a hazardous material, particularly in the form it was found on the site. This was rejected in an earlier trial, and company executives, including CEO William Mitzel, pled no contest to misdemeanor charges relating to a failure to inventory hazardous materials.

An appeal to the California Supreme Court remains a possibility.

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