City of Edgerton v. General Cas. Co. of Wisconsin

• Decision Date: 25 November 1992
• Docket Number: No. 91-1408,91-1408
• Citation: 493 N.W.2d 768,172 Wis.2d 518
• Parties: CITY OF EDGERTON, and Edgerton Sand & Gravel, Inc., Plaintiffs-Respondents, v. GENERAL CASUALTY COMPANY OF WISCONSIN, Defendant-Appellant, d Wisconsin Insurance Security Fund, Defendant, Aetna Casualty and Surety Company, Defendant-Co-Appellant,d Hanover Insurance Companies, Wausau Insurance Companies, and Local Government Property Insurance Fund, Defendants.
• Court: Wisconsin Court of Appeals

Page 768

493 N.W.2d 768

172 Wis.2d 518

CITY OF EDGERTON, and Edgerton Sand & Gravel, Inc., Plaintiffs-Respondents, v. GENERAL CASUALTY COMPANY OF WISCONSIN, Defendant-Appellant,

d

Wisconsin Insurance Security Fund, Defendant,

Aetna Casualty and Surety Company,

Defendant-Co-Appellant,d

Hanover Insurance Companies, Wausau Insurance Companies, and

Local Government Property Insurance Fund, Defendants.

No. 91-1408.

Court of Appeals of Wisconsin.

Submitted on Briefs July 14, 1992.

Opinion Released Nov. 25, 1992.

Opinion Filed Nov. 25, 1992.

For the defendant-appellant the cause was submitted on the briefs of Thomas N. Harrington and Heidi L. Vogt of Cook & Franke S.C., Milwaukee.

For the defendant-co-appellant the cause was submitted on the briefs of Thomas R. Schrimpf and Susan R. Tyndall of Hinshaw & Culbertson, Milwaukee.

For the plaintiffs-respondents the cause was submitted on the briefs of James A. Olson and Steven J. Schooler of Lawton & Cates, S.C., Madison.

Amicus Curiae brief was filed by Joseph J. Muratore, Jr., Racine, Attorney, and Thomas J. Dawson, Madison, and Eugene R. Anderson, Robert M. Horkovich, Carol A. Matthews and Bruce A. Brown, of counsel, New York City, for Wisconsin Public Intervenor and Wisconsin's Environmental Decade.

Amicus Curiae brief was filed by Thomas C. Ewing and Douglas B. Clark of Foley & Lardner, Madison, for Wisconsin Policyholders Ass'n Amicus Curiae brief was filed by Robert C. Burrell of Borgelt, Powell, Peterson & Frauen, S.C., Milwaukee, Attorneys, and Thomas W. Brunner, Marilyn E. Kerst and James P. Anasiewicz of Wiley, Rein & Fielding, of counsel, Washington, D.C., for Wisconsin Ins. Alliance and Ins. Environmental Litigation Ass'n.

Before SUNDBY, CANE and LaROCQUE, JJ.

SUNDBY, Judge.

Edgerton Sand & Gravel, Inc. (ES&G) owns a landfill site in Rock county which it closed December 30, 1984. During 1984 and 1985 it capped the landfill. The city of Edgerton leased the site for a municipal landfill from approximately 1968 to 1984. In 1984 volatile organic compounds (VOCs) were detected in the groundwater under, and in the vicinity of, the site.

By certified letter dated June 22, 1989, the United States Environmental Protection Agency (EPA), pursuant to section 104(e) of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) ¹ [42 U.S.C. § 9604(e) ], informed ES&G and the city that it was investigating the circumstances surrounding the presence of hazardous substances in and around the ES&G site. EPA requested that ES&G, the city, and other potentially responsible parties (PRPs) respond to the Wisconsin Department of Natural Resources (DNR) with detailed information as to the disposal of hazardous substances at the site from 1950 to 1984. ² On July 7, 1989, the city forwarded EPA's letter to its insurer, General Casualty Company of Wisconsin, and advised: "[w]e are insisting that you accept tender of coverage immediately and ... request that you retain independent expert counsel for the City of Edgerton to represent the City in this matter."

General Casualty also insured ES&G against liability for property damage and personal injury arising out of its ownership and use of the landfill. ³ On July 20, 1989, ES&G forwarded EPA's letter to General Casualty and requested that it provide ES&G with defense coverage and pay any costs ES&G "may have regarding this site."

By certified letter dated February 27, 1990, DNR gave the PRPs thirty days to propose a PRP-implemented remediation work plan to clean up the site and remediate the environmental problems associated with the site, or face listing of the site on CERCLA's National Priorities List (NPL), or state action. ⁴ On April 23, 1990, ES&G notified its excess liability insurer, Aetna Casualty and Surety Company, that ES&G ES&G and the city began this action December 20, 1990, seeking a declaration that General Casualty and Aetna are obligated under their policies to defend them against, and indemnify them for, any liability arising out of EPA's and DNR's claims, actions or suits involving the landfill. ES & G and the city also stated a claim against General Casualty and Aetna for bad faith in refusing to provide them with a defense.

had received EPA's Information Request letter and DNR's enforcement letter of February 27, 1990. ES&G requested that Aetna accept coverage of defense costs and any liability ES&G might incur as a result of EPA's and DNR's potential claims. General Casualty and Aetna denied coverage and refused to provide ES&G and the city with a defense.

ES&G and the city filed a motion for summary judgment on March 26, 1991. On April 26, 1991, General Casualty filed a cross-motion for summary judgment, claiming that no "suit seeking damages" had been filed which triggered its duty to defend. It further contended that the insureds' failure to give it timely notice of an "occurrence" or claim, as required by its policies, relieved it of any obligation to provide its insureds with coverage under its policies. It also requested that the trial court dismiss the insureds' bad faith claim. On April 29, 1991, Aetna filed a substantively identical cross-motion for summary judgment. In the alternative, General Casualty and Aetna each moved the trial court for a continuance to permit it to conduct additional discovery.

On May 10, 1991, the trial court granted ES&G's and the city's motion for summary judgment and denied General Casualty's and Aetna's cross-motions, except on the insureds' bad faith claims, which it dismissed. The court did not rule on General Casualty's and Aetna's motions for a continuance. ⁵

On July 18, 1991, the circuit court entered an amended judgment. General Casualty and Aetna appeal. ES&G and the city do not appeal from that part of the judgment which dismissed their bad faith claim. We affirm that part of the judgment which denied General Casualty's and Aetna's cross-motions for summary judgment and reverse that part of the judgment which granted ES&G's and the city's motion for summary judgment. We also reverse the judgment in favor of the city against Aetna because Aetna does not insure the city.

THE ISSUES

When confronted with cross-motions for summary judgment, the reviewing court must rule on each party's motion on an individual basis. Each motion must be denied if material factual issues exist as to the motion. 10A C. WRIGHT & A. MILLER, FEDERAL PRACTICE AND PROCEDURE § 2720 (2d ed. 1983). See also Ziegler Co., Inc. v. Rexnord, Inc., 139 Wis.2d 593, 595 n. 1, 407 N.W.2d 873, 875 n. 1 (1987); Grotelueschen v. American Family Ins. Co., 171 Wis.2d 437, 492 N.W.2d 131 (1992) (J. Abrahamson, dissenting). In most respects, Wisconsin's summary judgment statute, sec. 802.08, Stats., is substantially the same as Rule 56, Fed.R.Civ.P., which governs summary judgment procedure in the federal district courts. We conclude that this construction of the federal rule is consistent with Wisconsin summary judgment methodology. We, like the federal appellate courts, review the trial court's decision by applying, just as the trial court applied, the standards and methods set forth in the summary judgment rule. Wright v. Hasley, 86 Wis.2d 572, 579, 273 N.W.2d 319, 322-23 (1979).

We identify the following issues presented by the parties' motions and cross-motions:

(1) Did issuance of the June 22, 1989 PRP letters by EPA to ES&G and the city under section 104(e) of CERCLA trigger the duty of General Casualty and Aetna to defend their insureds against the Superfund (2) Are clean-up and remediation costs, which ES&G and the city incur in response to the Superfund initiative, sums which they are obligated to pay "as damages," within the meaning of that term as used in the insurers' policies? We conclude that they are.

                [172 Wis.2d 530] initiative? 6  We conclude that the insurers' duty to defend was not triggered by the PRP letters of June 22, 1989, but arose when DNR's letter of February 27, 1990, unequivocally imposed upon ES&G and the city the responsibility to remediate and clean up the landfill or bear the expense thereof. 7
                

(3) Do the personal injury liability coverage provisions of General Casualty's and Aetna's policies provide coverage for ES&G's and the city's liability for groundwater contamination? We conclude that "personal injury," as defined in General Casualty's and Aetna's policies, includes injury to the groundwater.

(4) Do General Casualty's policies exclude coverage because ES&G and the city expected or intended that contaminants would leach into the groundwater from the landfill? We conclude that General Casualty's basic policy's "expected" or "intended" exclusions do not apply to personal injury liability coverage under Coverage P, applicable to ES&G, or to the Broad Form Extended Liability Coverage Endorsement, applicable to the city. Because coverage of groundwater contamination is provided under the personal injury liability coverage provisions, we need not consider whether coverage for property damage liability is excluded by provisions of General Casualty's basic policy.

(5) Was coverage under the insurers' policies triggered during a policy period? Because the question of the appropriate trigger of coverage for personal injury liability has not been briefed, and the need to answer that question may be obviated by the evidence at trial, we do not reach this issue.

(6) Is the cost of cleaning up and remediating the landfill site itself excluded from coverage under the policies' owned-property exclusion? We conclude that where, as here, the purpose of remedial work on the insured's property is to repair or prevent environmental damage, the cost of such work is not excluded by the owned-property exclusion.

(7) Is any party entitled to summary judgment on the question of whether General Casualty and Aetna were prejudiced by the insureds' untimely notice of an "occurrence" or claim? We conclude that there is a genuine issue of...