Anderson v. Minnesota Ins. Guar. Ass'n
| Decision Date | 26 July 1994 |
| Docket Number | No. C7-93-2490,C7-93-2490 |
| Citation | 520 N.W.2d 155 |
| Parties | Kenneth M. ANDERSON, as Personal Representative of the Estate of Fred W. Hedberg; et al., Appellants, v. MINNESOTA INSURANCE GUARANTY ASSOCIATION, Respondent, Employers Insurance of Wausau, a Mutual Company, et al., Defendants, The Hartford Insurance Company, St. Paul Fire & Marine Insurance Company, National Indemnity Co., Respondents. |
| Court | Minnesota Court of Appeals |
Syllabus by the Court
The district court erred in holding appellants' equitable estoppel claim barred by this court's opinion in Sylvester Bros. Dev. Co. v. Great Cent. Ins. Co., 480 N.W.2d 368 (Minn.App.1992), pet. for rev. denied (Minn. Mar. 26, 1992). Appellants made a showing of a legally viable claim sufficient to warrant amendment of the complaint to allege an equitable estoppel cause of action.
Maclay R. Hyde, Nicholas N. Nierengarten, Rick E. Kubler, Jonathan M. Redgrave, Gray, Plant, Mooty, Mooty & Bennett, Minneapolis, for appellants.
Richard J. Chadwick, Chadwick, Johnson & Condon, Minneapolis, for The Hartford Ins. Co.
Charles E. Spevacek, Stacy A. Broman, Meagher & Geer, Minneapolis, for St. Paul Fire & Marine Ins. Co.
Charles E. Lundberg, Bassford, Lockhart, Truesdell & Briggs, Minneapolis, and Laura A. Foggan, Daniel E. Troy, Bryan Earl, Wiley, Rein & Fielding, Washington, DC for amicus curiae Ins. Environmental Litigation Ass'n.
Bradley C. Clary, Oppenheimer, Wolff & Donnelly, St. Paul, and Edward Zampino, Victor C. Harwood, III, Peter E. Mueller, Harwood Lloyd, Hackensack, NJ, for amicus curiae Aetna Cas. and Sur. Co. Karen A. Schaffer, Asst. Dakota County Atty., Chair, Civ. Committee, St. Paul, for amicus curiae Minnesota County Attys. Ass'n.
Considered and decided by PARKER, P.J., and SCHUMACHER and HOLTAN, * JJ.
This court granted discretionary review of the district court's denial of appellants' motion to amend their complaint to add a claim for equitable estoppel. We reverse and remand.
At the center of this dispute is a 92-acre parcel of land (the property) in Minnetonka owned by John Hedberg and the estate of Fred Hedberg. Between the late 1930s and 1954, two acres of the property were used as the Minnetonka Township dump site (the dump site). Fred Hedberg purchased the property in August of 1946. The dump site on the property was operated by a municipal entity until about 1948 and was operated by private parties until 1954. At no time were the property's owners or any of the appellants involved in management of the dump site. After 1954, the site was no longer used as a dump.
An environmental assessment performed on the property in 1987, in preparation for development, disclosed the existence of the former dump site. Appellants notified the Minnesota Pollution Control Agency (MPCA), which has required appellants to pay for investigation and remedial actions.
Appellant Kenneth Anderson, the personal representative of the estate of Fred Hedberg, sued in federal district court, seeking contribution for costs of the cleanup from several potentially responsible parties. Three of the potentially responsible parties brought counterclaims against Kenneth Anderson; one of those three also brought third-party actions against John Hedberg, individually and as trustee of the Dorothy E. Hedberg irrevocable trust, and against Hedberg Partners 87. Appellants tendered the counterclaims and the MPCA's claims to the respondent insurers. Each insurer denied coverage.
Appellants brought the present declaratory judgment action asserting respondents must defend and indemnify them against the counterclaims and the MPCA's claims. Appellants' claims against respondents were based on comprehensive general liability (CGL) policies with effective dates between March 10, 1963, and March 1, 1984.
The earliest CGL policies required the insurer
to pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of injury to or destruction of property, including the loss of use thereof, caused by accident. 1
After March 1, 1966, the CGL policies required the insurer to
pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of * * * property damage to which this insurance applies, caused by an occurrence.
Between 1966 and 1973, "occurrence" was defined to mean
an accident, including injurious exposure to conditions, which results, during the policy period, in bodily injury or property damage neither expected nor intended from the standpoint of the insured.
From 1973 on, "occurrence" was defined to mean
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.
In 1970, the Insurance Rating Board (IRB), which developed standardized policy language for stock insurance companies, introduced what has come to be called the qualified pollution exclusion clause. See E. Joshua Rosenkranz, Note, The Pollution Exclusion Clause Through the Looking Glass, 74 Geo.L.J. 1237, 1251 (1986). The IRB's proposed exclusion (footnote omitted) read:
It is agreed that the insurance does not apply to bodily injury or property damage arising out of the discharge, dispersal, release or escape of smoke, vapors, soot, fumes, acids, alkalis, toxic chemicals, liquids or gases, waste materials or other irritants, contaminants or pollutants into or upon land, the atmosphere or any water course or body of water; but this exclusion does not apply if such discharge, dispersal, release or escape is sudden and accidental.
Id. 2
Before insurers could include the qualified pollution exclusion clause in policies issued to Minnesota insureds, the provision had to be approved by the Commissioner of the Minnesota Department of Commerce. Minn.Stat. § 70A.06, subd. 2 (1969). When the qualified pollution exclusion clause was introduced, the IRB and the MIRB submitted regulatory filings on behalf of their insurer members. Individual insurers also submitted regulatory filings on their own behalf. With the regulatory filings, the IRB submitted an explanation of the qualified pollution exclusion clause which read:
Coverage for pollution or contamination is not provided in most cases under present policies because the damages can be said to be expected or intended and thus are excluded by the definition of occurrence. The above exclusion clarifies this situation so as to avoid any question of intent. Coverage is continued for pollution or contamination caused injuries when the pollution or contamination results from an accident except that no coverage will be provided under certain operations for injuries arising out of discharge or escape of oil into any body of water.
The independent filing by the St. Paul Insurance Companies was accompanied by the same explanation. The qualified pollution exclusion was approved by the Minnesota Department of Commerce in June of 1970.
It is the explanation that accompanied the regulatory filing of the qualified pollution exclusion clause that forms the basis of appellants' equitable estoppel claim. According to appellants, respondents misled insurance regulators across the country, and specifically in Minnesota, into believing that the pollution exclusion clause was merely a clarification of existing coverage when, in fact, it was a significant reduction in coverage. The district court concluded that this court had essentially rejected appellants' equitable estoppel claim in Sylvester Bros. Dev. Co. v. Great Cent. Ins. Co., 480 N.W.2d 368 (Minn.App.1992), pet. for rev. denied (Minn. Mar. 26, 1992), in which this court held the pollution exclusion clause was unambiguous. Accordingly, the district court ruled that extrinsic evidence was not admissible to vary the meaning of the pollution exclusion clause and denied appellants' motion to amend their complaint to add a claim for equitable estoppel. This court granted discretionary review.
Did the district court abuse discretion in denying appellants' motion to amend their complaint to add a claim for equitable estoppel?
Whether to allow a party to amend pleadings is a decision that rests within the discretion of the district court; its decision will not be reversed on appeal absent a clear abuse of discretion. Warrick v. Giron, 290 N.W.2d 166, 169 (Minn.1980). Amendment should be freely allowed where justice so requires. Minn.R.Civ.P. 15.01.
The district court determined that appellants' proposed equitable estoppel claim was not a viable cause of action based on this court's opinion in Sylvester Bros. Whether the district court's reading of Sylvester Bros. was correct presents a question of law; questions of law are reviewed de novo on appeal. See Hibbing Educ. Ass'n v. Public Employment Relations Bd., 369 N.W.2d 527, 529 (Minn.1985).
A motion to amend may be properly denied if the party opposing the amendment would be prejudiced. Envall v. Independent Sch. Dist. No. 704, 399 N.W.2d 593, 597 (Minn.App.1987), pet. for rev. denied (Minn. Mar. 25, 1987). There is no claim of prejudice in this case.
Amendment may also be denied if the proposed amendment does not state a viable claim for relief. See Eisert v. Greenberg Roofing & Sheet Metal Co., 314 N.W.2d 226, 228-29 (Minn.1982) (). Whether appellants' proposed amendment states a viable claim is analogous to the issue presented by a motion to dismiss for failure to state a claim under Minn.R.Civ.P. 12.02; such a motion can be granted only if it is certain from the pleadings that no facts could be introduced to support the relief sought. See Northern States Power v. Franklin, 265 Minn. 391, 395, 122 N.W.2d 26, 29 (1963) (...
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