

                  UNITED STATES COURT OF APPEALS
                      FOR THE FIRST CIRCUIT
                                           

No. 94-1707

                  RICHARD A. MOTTOLO AND SERVICE
                    PUMPING &amp; DRAIN CO., INC.,
                     Plaintiffs - Appellants,

                                v.

                     FIREMAN'S FUND INSURANCE
                         COMPANY, ET AL.,
                     Defendants - Appellees.

                                           

           APPEAL FROM THE UNITED STATES DISTRICT COURT
                FOR THE DISTRICT OF NEW HAMPSHIRE

         [Hon. Joseph A. DiClerico, U.S. District Judge]                                                                 

                                           

                              Before

                     Torruella, Chief Judge,                                                     
                      Boudin, Circuit Judge,                                                     
                 and Barbadoro,* District Judge.                                                         

                                           

     James  H. Gambrill,  with whom  Engel, Gearreald  &amp; Gardner,                                                                           
P.A. was on brief for appellants.              
     Kevin C.  Devine,  with whom  Devine  &amp; Nyquist,  Joseph  S.                                                                           
Crociata, Stuart L. Peacock, Gilberg &amp; Kurent, Stephen Dibble and                                                                       
Ouellette,  Hallisey, Dibble  &amp; Tanguay,  P.A. were on  brief for                                                        
appellees.
     Thomas W. Brunner, Laura  A. Foggan, Richard H.  Gordin, Lon                                                                           
A. Berk, Dennis  A. Tosh and Wiley, Rein &amp;  Fielding on brief for                                                              
Insurance Environmental Litigation Association, amicus curiae.

                                           

                         January 3, 1995
                                           

                                                  

*  Of the District of New Hampshire, sitting by designation.

          TORRUELLA, Chief Judge.  Plaintiffs-appellants, Richard                    TORRUELLA, Chief Judge.                                          

Mottolo  ("Mottolo")  and Service  Pumping  and  Drain Co.,  Inc.

("Service"), appeal the district court's  summary judgment ruling

that no coverage  was provided under insurance policies issued to

Mottolo by defendants-appellees, Fireman's Fund Insurance Company

("Fireman's Fund"),  United States  Fidelity  &amp; Guaranty  Company

("USF  &amp; G") and Aetna Casualty and Surety Company ("Aetna"), for

injury  to property caused by  the dumping of  hazardous waste by

Mottolo and Service.  For the reasons set forth below,  we affirm

the district court's entry of summary judgment.

                                I.                                          I.

                            BACKGROUND                                      BACKGROUND

          On   September   8,  1983,   and   February  4,   1984,

respectively,  the United States  and the State  of New Hampshire

(together, "the  government") brought suits in  the United States

District Court  for New  Hampshire against Mottolo,  Service, and

others, pursuant  to  the Comprehensive  Environmental  Response,

Compensation and Liability  Act of 1980 ("CERCLA"),  42 U.S.C.   

9601-9675,    amended   by    the   Superfund    Amendments   and                                    

Reauthorization Act of 1986,  Pub. L. No. 99-499, 100  Stat. 1613

(1986),  and state  law,  to recover  costs  associated with  the

cleanup of a site  used by Mottolo and Service to  dump hazardous

waste.   The two  cases were later  consolidated.  On  August 28,

1988, the  district court granted in part the government's motion

for  summary judgment,  finding Mottolo  and Service  jointly and

severally  responsible  for all  cleanup  costs  incurred by  the

                               -2-

government at the dump site.  United States v.                                                     

Mottolo, 695 F. Supp. 615, 631 (D.N.H. 1988).                 

          Mottolo  and Service  then brought  this action  in the

United  States  District  Court   for  New  Hampshire  seeking  a

declaration  that the defendant insurance companies are obligated

to  indemnify them  for the costs  of cleaning up  the dump site.

Upon cross motions for summary judgment, the district court found

that  because   plaintiffs'  damages   did  not  arise   from  an

"occurrence,"  as  defined  by  defendants'  insurance  policies,

defendants  did not  have  a duty  to  indemnify the  plaintiffs.

Mottolo  v. Fireman's  Fund Ins.  Co., 830  F. Supp.  658 (D.N.H.                                               

1993).   The district court therefore  granted defendants' motion

for  summary judgment  and  denied plaintiffs'  cross motion  for

summary judgment.  This appeal followed.

                               II.                                         II.

                        STANDARD OF REVIEW                                  STANDARD OF REVIEW

          We review a district  court's grant of summary judgment

de novo and read the record in a light most favorable to the non-                 

moving party,  drawing all  inferences in the  non-moving party's

favor.  LeBlanc v. Great Am. Ins. Co., 6  F.3d 836, 841 (1st Cir.                                               

1993), cert. denied,    U.S.   , 114 S. Ct. 1398,  128 L.Ed.2d 72                             

(1994).   Summary  judgment is  appropriate when  "the pleadings,

depositions, answers to interrogatories, and  admissions on file,

together  with  the affidavits,  if any,  show  that there  is no

genuine issue as to  any material fact and that  the moving party

                               -3-                                          3

is entitled to  a judgment as a matter of law."   Fed. R. Civ. P.

56(c).   A "material" fact is one  "that might affect the outcome

of the suit under the governing law."  Anderson v. Liberty Lobby,                                                                           

Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 91  L.Ed.2d 202 (1986).              

A dispute about a material fact  is "genuine" if "the evidence is

such  that a  reasonable  jury could  return  a verdict  for  the

nonmoving party."  Id.                               

          Essentially, Rule  56(c) mandates the entry  of summary

judgment  "against a party who fails to make a showing sufficient

to  establish the  existence  of  an  element essential  to  that

party's case, and  on which that  party will  bear the burden  of

proof at trial."   Celotex Corp. v.  Catrett, 477 U.S. 317,  325,                                                      

106 S. Ct.  2548, 91 L.Ed.2d 265  (1986).  As to  issues on which

the nonmovant has the burden of proof, the movant need do no more

than  aver  "an  absence of  evidence  to  support  the nonmoving

party's case."  Id. at 325.  The burden of production then shifts                            

to  the nonmovant, who, to avoid summary judgment, must establish

the  existence of  at least  one question  of  fact that  is both

"genuine" and  "material."  See Anderson,  477 U.S. at 248.   The                                                  

nonmovant,  however,  may  not  rest  upon  mere  denial  of  the

pleadings.  Fed. R. Civ. P. 56.

                               III.                                         III.

                            DISCUSSION                                      DISCUSSION

          A.  Duty to Indemnify                    A.  Duty to Indemnify                                         

          Under New Hampshire law, an insurer's duty to indemnify

an insured may  be determined  by an analysis  of the  underlying

                               -4-                                          4

allegations against  the insured  and  the express  terms of  the

policy.  Great Lakes  Container v. National Union Fire  Ins., 727                                                                      

F.2d 30,  32  (1st Cir.  1984) (citing  Aetna Ins.  Co. v.  State                                                                           

Motors,  Inc.,  109  N.H. 120,  244  A.2d  64  (1968)).   If  the                       

complaint in the underlying action does not on its face establish

lack of  coverage, however, inquiry may  proceed into independent

evidence.  M. Mooney Corp. v. United States Fidelity &amp; Guar. Co.,                                                                           

Inc., 136 N.H. 463, 469, 618  A.2d 793 (1992).  When interpreting              

the policy in light of these facts, a reviewing court  employs an

objective standard, inquiring whether  a reasonable person in the

insured's position  would have expected indemnity  for the claims

asserted against him.   See Merchants Ins. Group v.  Warchol, 132                                                                      

N.H. 23, 27, 560 A.2d 1162 (1989).

          B.  The "Occurrence" Policy Provision                    B.  The "Occurrence" Policy Provision                                                         

          Mottolo seeks a declaration  of coverage from Fireman's

Fund,  USF &amp; G and  Aetna under insurance  policies which provide

coverage  for  claims  brought  against  an  insured  because  of

property  damage   caused  by   an  "occurrence."     The  phrase

"occurrence,"  is  defined  in   each  policy  as  "an  accident,

including  continuous or  repeated exposure to  conditions, which

results in bodily injury or property damage neither  expected nor

intended from the standpoint of the insured."  The threshold, and

dispositive,  question   in  this   case  is   whether  Mottolo's

contamination  of property  was an  "accident," and  therefore an

                               -5-                                          5

"occurrence" covered by the relevant insurance policies.1  

          The  New   Hampshire   Supreme  Court   has   addressed

"occurrence" policy provisions virtually  identical to the one at

bar in a line of cases beginning with Vermont Mutual  Ins. Co. v.                                                                        

Malcolm,  128 N.H.  521,  517 A.2d  800  (1986) and  ending  most                 

recently  in Providence Mutual Fire Ins. Co. v. Scanlon, 138 N.H.                                                                 

301, 638 A.2d 1246 (1994) and Green Mountain Ins. Co. v. Foreman,                                                                          

138  N.H. 440,  641  A.2d 230  (1994).2   In  between, the  Court

decided  Jespersen v. U.S. Fidelity &amp; Guaranty Co., 131 N.H. 257,                                                            

260, 551 A.2d 530 (1988) and  Fisher v. Fitchburg Mut. Ins.  Co.,                                                                          

131  N.H. 769, 560  A.2d 630 (1989).   In those  cases, the Court

construed  the term  "accident"  in the  context of  "occurrence"

coverage to mean "'an  undesigned contingency, . . .  a happening

by  chance, something out of the usual course of things, unusual,

fortuitous, not anticipated, and  not naturally to be expected.'"

Jespersen, 131 N.H. at  260 (quoting Vermont Mutual, 128  N.H. at                                                             

523) (other  citations omitted).   The Jespersen  Court explained                                                          

that the question of whether the causal event was "fortuitous" is

                                                  

1   Because  we  agree with  the  district court  that  Mottolo's
actions did not constitute an "accident,"  and therefore were not
an  "occurrence" covered  by  the insurance  policies, we  do not
reach the question of whether the property damage was expected or
intended from  the standpoint of Mottolo,  although, as explained
infra, that inquiry is  at least partly subsumed by  our analysis               
of whether the contamination was an "accident."    

2  The substantive law of New Hampshire controls this litigation.
See Klaxon Co. v. Stentor  Elec. Mfg. Co., 313 U.S. 487,  496, 61                                                   
S.  Ct. 1020, 85  L.Ed. 1477 (1941)  (a federal  court sitting in
diversity must apply the substantive law that would be applied by
the state in which it sits); American Title Ins. Co. v. East West                                                                           
Fin. Corp., 959 F.2d 345, 348 (1st Cir. 1992).                      

                               -6-                                          6

answered  by considering not "'the character of the act viewed in

isolation,  but  . .  . the  character  of the  act  viewed, with

reference to the insured, as  a cause of injury.'"  Id.  (quoting                                                                

Vermont Mutual, 128 N.H. at 524).                        

                               -7-                                          7

          In Scanlon, the New  Hampshire Supreme Court reiterated                              

the  test formulated  in Vermont  Mutual for  determining whether                                                  

there is an accident:

            "If the insured did not intend to inflict
            the   injury  on   the   victim  by   his
            intentional act,  and the act  was not so
            inherently injurious that the  injury was
            certain to  follow from it, the  act as a
            contributing  cause  of  injury would  be
            regarded    as    accidental    and    an
            'occurrence.'"

Scanlon,  638 A.2d at 1249  (quoting Vermont Mutual,  128 N.H. at                                                             

524).    An intentional  act is  "inherently  injurious if  it is

certain to  result in some  injury, although not  necessarily the

particular alleged injury."  Id.                                         

          Mottolo's  actions in  dumping  materials  at the  site

were, of  course, intentional.   Therefore, his actions  were not

"accidental" if  either 1) he intended to  cause the injury or 2)

his actions  were "inherently injurious."   Mottolo has  sworn by

affidavit  that he did not  intend to injure  property by dumping

the  waste.    The  question,  therefore,  is  whether  Mottolo's

intentional acts  of dumping hazardous waste  were so "inherently

injurious" that they could  not be performed without a  certainty

that some degree of injury to property would result.   This is an

objective  inquiry  for which  Mottolo's  "intent"  to injure  is

irrelevant.   See  Jespersen,  131 N.H.  at  261 ("Because  their                                      

intentional act was inherently injurious, it is of no consequence

that the Jespersens have  sworn, without contradiction, that they

did not intend to cause the alleged injuries."); see also Fisher,                                                                          

131 N.H. at 773.

                               -8-                                          8

          C.  Underlying Allegations                    C.  Underlying Allegations                                              

          The  United  States  Environmental   Protection  Agency

("EPA") made the following allegations of pollution in paragraphs

10 and 11 of its Complaint in the underlying action: 

            10.    Between  at  least  1975  and 1978
            Richard  Mottolo  buried  more than  1650
            drums   and   other  smaller   containers
            containing  waste,   including  hazardous
            substances, in the  southwest portion  of
            the  Mottolo  site.   These  wastes  were
            transported from K.J. Quinn and Co., Inc.
            and   Lewis   Chemical  Corporation   and
            disposed of at the Mottolo site.

            11.  The drums and  other containers were
            buried  in  an   area  in  the  southwest
            portion  of  the  site  adjacent  to  the
            intermittent stream.3   

          Because   these   allegations    are   by    themselves

insufficient  to  determine  whether  there was  an  "occurrence"

within  the  meaning  of  the  insurance  policies  --  or,  more

precisely, whether  Mottolo's acts were  so inherently  injurious

that some degree of  injury to property was certain to  result --

we look to the facts underlying the complaint.4

          At all times relevant to this litigation, Mottolo owned

65 acres of land on Blueberry Hill Road  ("the site") in Raymond,

New Hampshire.   In 1973,  Mottolo purchased  Service, a  company

whose primary  business involved  cleaning out drains  and grease

traps,  and pumping  out  septic tanks  and  cesspools.   Service
                                                  

3    The  State  of  New  Hampshire  made  essentially  the  same
allegations in its Complaint.

4  We  review those facts in the light  most favorable to Mottolo
and Service.   See  Nereida-Gonz lez v. Tirado-Delgado,  990 F.2d                                                                
701, 702 (1st Cir. 1993). 

                               -9-                                          9

disposed of waste accumulated  from these operations -- generally

sand, grease, and sewage  -- by taking the waste to a contractor,

or by discharging the  sewage into the city sewer  system through

licensed  spots.    In   1975  and  1977,  respectively,  Service

contracted  with K.J. Quinn  and Company ("Quinn")  and the Lewis

Chemical Corporation  ("Lewis") to pick  up and dispose  of waste

generated  by those companies.  Mottolo picked up waste for Quinn

and  Lewis until sometime in 1978, disposing approximately 200 to

300 barrels of  waste from Lewis  and 1,200 to  1,300 barrels  of

waste from Quinn.

          Mottolo or one of his  employees drove the Service dump

truck to  pick  up drums  and  barrels of  waste  at Quinn's  two

facilities  in Malden, Massachusetts and Seabrook, New Hampshire.

Mottolo  knew  Quinn  manufactured  shoe  polish  at  its  Malden

facility and  polyurethane at its Seabrook facility.  Mottolo was

informed at the Seabrook plant that Quinn "had polyurethane which

is very  thick -- it  looks like  wax."  Most  of the  containers

usually  had  the  words  "slop"  or  "waste"  written  on  them.

Although most  of the  drums  and barrels  Mottolo received  from

Quinn were sealed, Mottolo occasionally  had to replace covers on

the containers  and  observed  that  they held  a  thick  "goopy"

substance or "water slop."  On one  occasion, Service picked up a

cardboard container  from Quinn  which leaked a  "rancid" "super,

super strong"  smelling liquid  onto the  pavement  at the  site.

Mottolo  made no attempt to  ascertain the contents  of the waste

containers.

                               -10-                                          10

          Mottolo knew Lewis ran a solvent factory and knew  that

the  sludge  he  hauled  was  leftover  from  Lewis'  operations.

Mottolo's agreement with Lewis began when a Lewis official called

Mottolo and informed him that they had "a lot of solvent and were

looking . .  . to get rid of  it."  Mottolo informed him  that he

had a dump, but that he did not have a permit.  They nevertheless

agreed that Mottolo would  dispose of the containers.   The drums

and barrels Mottolo picked up at  Lewis were always sealed and he

never saw what was in them when he picked them up.

          Mottolo, or  one of his employees,  would transport the

drums and barrels  to the site on  Mottolo's truck and then  dump

them.   After ten to fifteen loads accumulated, George Frotten, a

Mottolo employee, would  bulldoze the containers in an attempt to

level off the site.   Dirt was then placed over them.  During the

bulldozing,  barrels and  drums would  be crushed  and flattened,

causing them to rupture  and spill their contents into  the soil.

Mottolo  knew that the containers broke during the bulldozing and

that  their contents would spill  into the soil.   Mottolo stated

that "[w]hen a drum broke open, you would have reds or blues. . .

.   It would look like shoe polish."   He stated that some of the

contents  would "sit there and  mass."  Mottolo  once brought two

tank  trucks of liquid waste from Quinn and pumped their contents

directly into the dump site.

          D.  The District Court's Analysis                    D.  The District Court's Analysis                                                     

          In  finding  that   Mottolo's  acts  were   "inherently

injurious,"  the   district   court  applied   the   "exceptional

                               -11-                                          11

circumstances" test  articulated by the New  Jersey Supreme Court

in  Morton Int'l, Inc. v. General Accident  Ins. Co., 134 N.J. 1,                                                              

629  A.2d 831  (1993),  rather than  New Hampshire's  "objective"

test.    Mottolo,  830 F.  Supp.  at  664.   The  district  court                          

distinguished the  Vermont Mutual-Scanlon line  of cases, stating                                                   

that "'environmental-pollution litigation should  generally [not]

be  included  in  that  category   of  cases  .  .  .   in  which

reprehensible  conduct justifies  a presumption  that injury  was

intended.'"   Id.  at  664 (quoting  Morton,  134 N.J.  at  86).5                                                     

Applying   the   Morton  standard,   the  court   listed  several                                 

"exceptional  circumstances" that enabled  it to  infer Mottolo's

subjective intent to injure.  Id. at 664-65.                                            

          The  district court was bound  to apply the  law of New

Hampshire  and erred in  not doing so.6   It is perhaps plausible

that, in applying Morton,  the district court was expressing  its                                  

belief that New Hampshire courts would distinguish Vermont Mutual                                                                           
                                                  

5   The  rationale for  the distinction  is that  "'insureds held
responsible  for environmental  pollution  vary significantly  in
their degree  of  culpability for  the harm  caused by  pollutant
discharge.'"  Mottolo, 830  F. Supp. at 664 (quoting  Morton, 134                                                                      
N.J.  at 86).   Therefore,  "'[a] general rule  in environmental-
pollution coverage litigation that  would permit intent to injure
to  be presumed  simply on  the basis of  a knowing  discharge of
pollutants would be unjustified.'"  Id. (quoting Morton, 134 N.J.                                                                 
at 86).   Regardless of the merits of this  proposition, there is
no basis in Vermont Mutual and its progeny for inferring that the                                    
New  Hampshire Supreme Court would adopt  it.  Rather, the law of
New Hampshire, as evolved from Vermont Mutual through Scanlon and                                                                       
Foreman,  is clear.    The Court  applies  an objective  test  to                 
determine whether  the causation of injury was an "accident" and,
therefore, an "occurrence" for insurance coverage purposes. 

6  We note that the "exceptional circumstances"  standard applied
by the district court was actually more favorable to Mottolo than
New Hampshire's objective, reasonable person standard.   

                               -12-                                          12

and its  progeny and  apply the Morton  standard.   In any  case,                                                

however,  as  discussed below,  we  find  incorrect the  district

court's  premise for  distinguishing the  New Hampshire  cases --

that they relied  on the "reprehensible" nature of the claimant's

conduct  to justify the presumption  of intent to  injure.7  Once

the premise falls, so does the justification for using a standard

other than that expressly pronounced by the New Hampshire Supreme

Court.

          E.  Analysis                    E.  Analysis                                

          The  proper  question,  under  New  Hampshire  law,  is

whether a reasonable person in Mottolo's shoes would foresee that

his dumping of  waste was certain to cause  some degree of injury

to  property.  See Fisher, 131 N.H.  at 773 ("A reasonable person                                   

would foresee that entering  into two contracts to sell  the same

property would inevitably lead  to the breach of at  least one of

                                                  

7   Vermont  Mutual did  involve  "reprehensible" conduct.    See                                                                           
Vermont Mutual, 128 N.H. at 521 (act of sexually assaulting young                        
boy inherently injurious because psychological injury  certain to
result).   In Fisher,  however, the  New Hampshire  Supreme Court                              
held  that  the sellers'  act of  signing  two purchase  and sale
agreements  for his  home  was inherently  injurious because  the
sellers would  inevitably have  to breach  one of  the contracts.
Fisher, 131 N.H.  at 773.   Even a willful  breach of a  contract                
cannot properly  be termed "reprehensible" conduct; certainly not
on  par  with  the  conduct  at issue  in  Vermont  Mutual.    In                                                                    
Jespersen, the Court  held that the  claimant's discharge of  his                   
business partner was inherently  injurious because some degree of
mental  and   physical  distress   was  a   natural  consequence.
Jespersen,  131 N.H.  at 261.   The  discharge  of a  partner, by                   
itself, is not "reprehensible" conduct.  Moreover, the Court went
so  far as  to  note  that  even  a  justifiable  termination  is                                                          
inherently injurious.  Id. (emphasis added).  In summary, the New                                   
Hampshire  Supreme   Court  has   never  linked   its  objective,
"inherently injurious" standard to the "reprehensible" nature  of
any of the claimants' conduct.

                               -13-                                          13

the  two   contracts.").     The  New  Hampshire   Supreme  Court

"determine[s] whether an injury was the result of an accident not

by considering 'the character of the act viewed in isolation, but

.  . .  the character of  the act  viewed, with  reference to the                                                                           

insured, as  a cause  of injury.'"   Jespersen,  131 N.H.  at 260                                                        

(emphasis  added)  (quoting Vermont  Mutual,  128  N.H. at  524).                                                     

"[T]he  Court does not look to the actor's subjective intent that

the  result in question occur,  but rather, the  Court 'may infer

that the  actor's state  of  mind was  the same  as a  reasonable

person's state of  mind would  have been.'"   King v.  Prudential                                                                           

Property and Cas. Ins.  Co., 684 F. Supp. 347, 349  (D.N.H. 1988)                                     

(quoting W. Keeton,  D. Dobbs, R. Keeton, &amp;  D. Owen, Prosser and                                                                           

Keeton on the Law of Torts   8, at 35-36).                                    

          Although the  district court applied an incorrect legal

standard, our application of  the proper legal standard leads  to

the same result as that reached by the district court.  Under New

Hampshire's  objective  standard,  Mottolo's  haphazard  dumping,

bulldozing and burying of  drums containing chemical waste would,

at  first blush,  appear objectively certain  to result  in "some

injury" to adjacent property.8   During the routine bulldozing of

the containers, they would  be crushed, flattened, and punctured,

causing  their  contents  to  spill  into  the  soil.    The  EPA

ultimately recovered  from  the site  more than  1,650 drums  and

                                                  

8  We note that it  is not necessary that it be certain  that the
act cause  the particular injury  alleged; it  is only  necessary
that it was certain to  cause some injury.  Scanlon, 638  A.2d at                                                             
1249.

                               -14-                                          14

other smaller containers which  held toxic, flammable, corrosive,

irritant and  explosive materials.9   Mottolo was aware  that the

containers  were leaking into the soil.  On one occasion, Mottolo

pumped two tanks of liquid waste directly into the soil.  Because

the  site is located adjacent  to an intermittent  stream, it was

foreseeable  that whatever  was being  dumped would find  its way

into the waters of the stream.10  

          Mottolo  argues, however, that  he did not  know he was

dumping hazardous waste.   The  test under New  Hampshire law  is

whether a  reasonable person  under the circumstances  would have

known that he was dumping harmful substances.  See Jespersen, 131                                                                      

N.H. at  260; Fisher, 131  N.H. at 773.   The facts  presented on                              

summary judgment,  viewed most  favorably  to Mottolo,  establish

that a reasonable person under the circumstances would have known

that he was dumping some form of hazardous substances, or, at the

least, that the  substances that were injurious to the  land.  As

to this, there is no genuine factual dispute.

          Mottolo was  in the  business of cleaning,  among other

things, cesspools  and grease traps, for  approximately two years

prior to his contracting  with Quinn.  Mottolo disposed  of waste

accumulated from those operations  -- generally sand, grease, and

                                                  

9   The hazardous  chemicals identified by  the EPA  at the  site
included  acetone,  toluene,   trichlorethylene,  xylene,   butyl
acetate,  methanol,  methylene  chloride,   methyl  methacrylate,
methyl ethyl ketone, and methyl isobutyl ketone.

10   Investigators  discovered  an upswelling  of groundwater  in
several locations between the site and a creek downhill with odor
and color consistent with those at the site.  

                               -15-                                          15

sewage -- by taking the waste to a contractor, or by  discharging

the sewage  into the  city sewer  system through  licensed spots.

Prior to  his relationships with  Quinn and Lewis,  then, Mottolo

had  at  least some  rudimentary  knowledge of  how  the official

system for disposing of waste operated.

          Mottolo  knew   Quinn  manufactured  shoe   polish  and

polyurethane  and that Lewis operated a solvent factory.  A Quinn

employee described  the polyurethane it needed  disposed as "very

thick  -- it  looks like  wax."   Mottolo's agreement  with Lewis

began when a Lewis employee called him and said that Lewis had "a

lot of  solvent and were looking  . . . to  get rid of  it."  The

Lewis employee  asked Mottolo if  he "had a  means to get  rid of

some solid stuff."  Mottolo told him that he had a dump, but that

he  did not have  a permit.  Apparently,  this was sufficient for

Lewis.  Lewis always paid Mottolo in cash, no invoices were used,

and Lewis never wanted any receipts.  Lewis' clandestine behavior

would  suggest to a reasonable business person that something was

amiss, but Mottolo made  no attempt to ascertain the  identity of

the waste he was hauling.

          Mottolo knew that the  containers were bulldozed at the

site, causing their  contents to spill out the soil.  He observed

drums leak  and burst at  the site and he  knew that some  of the

waste  that leaked  at  the site  consisted  of a  thick  "goopy"

substance and  a "rancid" "super, super  strong" smelling liquid.

Mottolo  disposed of  approximately 1,650  drums and  other small

containers of waste at the site over a three to four year period.

                               -16-                                          16

          Based  on these facts, we think there can be no genuine

dispute  that  a  reasonable  person  in  Mottolo's  shoes,  with

Mottolo's  experience,  would  have  known that  he  was  dumping

substances  that were certain to cause "some degree" of injury to

adjacent property.  

                               -17-                                          17

          Mottolo  makes one  last stand,  however, arguing  that

regardless of what  is known  today, a reasonable  person in  the

mid-1970s  would not  have  believed that  dumping the  waste was

inherently injurious.   We agree  that the proper  test looks  to

what  a reasonable  person, at  the time,  would have  known with

respect  to  the injurious  nature of  his  acts.   The defendant

insurance companies have provided  evidence of the actual harmful

effects of the  dumping on  the site and  nearby water  supplies.

The  defendants have  also provided,  as noted  above, sufficient

evidence to  establish that a reasonable person  would have known

that he was dumping  hazardous materials.  This evidence  is more

than sufficient to shift  the burden to Mottolo to  establish the

existence  of a  genuine issue  of material  fact  concerning the

"state  of the  art" (or,  more precisely,  the state  of general

knowledge) with respect to hazardous waste in the mid-1970s.  See                                                                           

Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.  Ct. 2505, 91                                  

L.Ed.2d 202 (1986).11  

          Such evidence might  include expert affidavit testimony

that the state of scientific evidence was insufficient during the

relevant time  period and  that such  dumping was  not considered

"inherently injurious."   Mottolo has presented no  such evidence

                                                  

11  Because the underlying action against Mottolo by the EPA  and
the  State of New Hampshire  was initiated in  federal court, the
burden shifting framework of New Hampshire's declaratory judgment
act, N.H. Rev. Stat. Ann.    491.22, does not apply.  See Town of                                                                           
Allenstown,  et al.  v. National  Casualty Company,  No. 94-1106,                                                            
slip op. at  8-9 (1st Cir. Sept. 30, 1994).   The ultimate burden
of  establishing coverage  therefore  remains on  the  plaintiff,
Mottolo.  

                               -18-                                          18

and has failed to establish a genuine issue of material fact with

respect  to the  state  of the  art  regarding knowledge  of  the

dangers of hazardous waste  dumping in the 1970s.   His statement

that  he  did  not  believe  the  substances  were  hazardous  is

insufficient by itself to defeat the motion.  See Fed. R. Civ. P.                                                           

56.

                               IV.                                         IV.

                            CONCLUSION                                      CONCLUSION

          Although  we find  that the  district court  applied an

incorrect legal standard, we agree with its conclusion that there

is no genuine issue of material fact that the intentional dumping

of  hazardous  waste  by  the plaintiffs-appellants  was  not  an

"occurrence" covered  by the  pertinent insurance policies.   The

decision of  the  district court  granting  defendants-appellees'

motion for summary judgment is therefore 

          Affirmed.                       Affirmed.                            

                               -19-                                          19
