Bituminous Cas. Corp. v. Cowen Const., Inc., 95,971.

Decision Date30 April 2002
Docket NumberNo. 95,971.,95,971.
Citation55 P.3d 1030,2002 OK 34
PartiesBITUMINOUS CASUALTY CORP., Plaintiff, v. COWEN CONSTRUCTION, INC., and Hospital Casualty Company, Defendants.
CourtOklahoma Supreme Court

Robert N. Naifeh, Jr. of Derryberry, Quigley, Solomon, Blankenship & Naifeh, Oklahoma City, OK, for the plaintiff.

Alan Wayne Gentges of Scott & Gentges, Tulsa, OK, for the defendant, Cowen Construction, Inc.

Michael J. Heron, Mary Beth Hanan and Patrick R.B. Sherry of Johnson Hanan & Heron, Oklahoma City, OK, for the defendant, Hospital Casualty Co.

LAVENDER, J.

¶ 1 Pursuant to the Uniform Certification of Questions of Law Act, 20 O.S.1991 §§ 1601 et seq., the United States District Court for the Northern District of Oklahoma certified the following questions:

1. Under Oklahoma law, what is the proper "trigger of coverage" theory to determine the applicability of a commercial general liability policy1 to injuries allegedly caused by lead poisoning?
2. Under Oklahoma law, is the scope of the total pollution exclusion of a commercial general liability policy limited to "environmental pollution?"

¶ 2 Since the language used in the insurance contract (in issue) is in itself clear and unambiguous insofar as it addresses coverage for "property damage" and "bodily injuries" occasioned by "pollutants," it will be given its plain and ordinary meaning. The second certified question is answered in the negative. Because our response to the second query disposes of the case, we decline to answer the first certified question. The Court will answer only those certified questions which are "determinative" of a cause.2 When, as here, the provided answer resolves the case, any additional response would necessarily be given in the abstract3 and, hence, will not be offered.

I STATEMENT OF FACTS AND PROCEDURAL HISTORY

¶ 3 St. John Medical Center [hospital] contracted with Cowen Construction, Inc.[Cowen] to build a kidney dialysis center in Tulsa, Oklahoma. Cowen completed the contracted-for dialysis center in November 1993. In October 1996 eight patients4 — who had received dialysis treatments at the center — were diagnosed as suffering from lead poisoning and associated illnesses. Tests revealed that the B-bath unit of the dialysis center was contaminated with lead.5

¶ 4 Patients who were treated in the contaminated dialysis unit and suffered lead poisoning brought actions in the District Court of Tulsa County, State of Oklahoma, against hospital [and others] for damages related to their injuries. Cowen was not directly sued in these actions. Nonetheless, in one of the state-court actions6 hospital brought a third-party petition against Cowen alleging that it had negligently constructed the venting system7 for the B-bath dialysis unit resulting in its contamination. Hospital's third-party petition is based upon theories of negligence, breach of warranty in the unit's construction and breach of contract.8

¶ 5 During periods relevant to the dialysis unit's construction and the patient/plaintiffs' claims Cowen purchased Commercial General Liability ["GCL"] insurance policies from Bituminous Casualty Corporation [Bituminous] [for three policy periods beginning June 15, 1991 and ending May 1, 1994], from CNA Insurance Company [CNA] [for policy periods from 1994 to 1996], and from United States Fidelity Insurance and Guaranty Company [USF & G] [from 1996 until the present.] ¶ 6 In February 2000 Hospital Casualty Company [HCC], hospital's insurer, placed Bituminous and CNA on notice that it would seek indemnity from them if it had to pay— on hospital's behalf—for the patient/plaintiffs' alleged injuries. [Only USF & G had agreed to defend Cowen against hospital's claims.] After receipt of HCC's notice Bituminous sought declaratory relief in the United States District Court for the Northern District of Oklahoma to determine whether it had any contractual obligation to either defend or indemnify Cowen in the third-party action.

II THE COURT'S FUNCTION WHEN RESPONDING TO A CERTIFIED QUESTION FROM A FEDERAL COURT

¶ 7 Because the case from which the certified question emanates is not before us for resolution, we refrain (1) from applying the declared state-law response to the facts elicited in the federal-court litigation and (2) from passing upon the effect of federal procedure on the issues, facts and proof in the case. We have briefly outlined the case's factual underpinnings to place the certified questions in a proper perspective. It is for the United States District Court for the Northern District of Oklahoma to analyze our answer's impact on the case and facts ultimately before it.9

III CERTIFIED QUESTION ANSWERED

¶ 8 The posited certified questions call for the Court to ascertain the meaning of certain terms found in general liability insurance policies/contracts10 between Bituminous (insurer) and Cowen (insured). It is settled under Oklahoma's extant jurisprudence that ascertaining whether the terms of an insurance policy are ambiguous is for the Court to determine as a matter of law.11

¶ 9 Oklahoma's extant jurisprudence demarcates guidelines for ascribing meaning to an insurance policy's terms. Basically, an insurance policy is a contract. When its terms are unambiguous and clear, the employed language is accorded its ordinary, plain meaning and enforced so as to carry out the parties' intentions.12 In this process we are mindful that an insured and insurer are free to contract for that quantum of coverage which one is willing to extend and the other is willing to purchase.13 The parties are bound by the terms of their agreement and the Court will not undertake to rewrite the same nor to make for either party a better contract than the one which was executed.14 The last principle of construction relevant to resolution of the dispositive certified question before the Court requires that a contract be construed as a whole, giving effect to each of its parts.15 These rules are amplified by the provisions of 36 O.S.1991 § 3621 "Construction of Policies" which state:

Every insurance contract shall be construed according to the entirety of its terms and conditions set forth in the policy and as amplified, extended, or modified by any rider, endorsement, or application attached to and made a part of the policy.

¶ 10 We begin by noting that today's case does not mark the first time the Court has considered the scope of a "pollution exclusion clause" in a comprehensive GCL insurance policy. The Court in Kerr-McGee Corp. v. Admiral Ins. Co.16 reviewed a similar policy exclusion and held that it was unambiguous. While we accept the certified question for answering because the wording of the insurance contract (in issue) is—although similar—different, we reach the same conclusion as the earlier Court did.

¶ 11 The primary focus of our analysis is construction of the following exclusion-from-coverage found in a special endorsement to the Bituminous/Cowen GCL policy:

(1) Bodily injury or property damage arising out of the actual, alleged or threatened discharge, dispersal, release or escape of pollutants.17

Bituminous would have the Court declare that the special endorsement's terms are unambiguous and limit the scope of covered harm—i.e, there is no coverage for damage occasioned by pollutants.18 The insured asks the Court (1) to find that the above-quoted policy language is ambiguous and (2) to construe the "pollution exclusion" endorsement to "mean pollution in the traditional environmental sense and for which the insured would have expected to exclude its products incorporated into its work." It is Cowen's claim that the word "pollutant" as used in the GCL policy is "unclear."

¶ 12 The Court is required in its construction of the policy's terms to give effect to the entire contract. Our review discloses no observable ambiguity in the exclusion's language found on the insurance policy's face. Giving the language used in the pollution-exclusion clause—as stated in the special endorsement—its plain and ordinary meaning evinces an exclusion of coverage for bodily injury or property damage caused by a pollutant's release. Nowhere in the policy's lexicon is there language employed which would sustain finding—as suggested by the insured—the pollution exclusion clause only excluded from coverage that bodily injury and/or property damage which occurred when the general "environment" was damaged by the insured's acts. An insured cannot insist upon a strained construction of relevant policy language in order to claim a patent ambiguity exists nor can it contradict the written instrument's plain terms under the guise of a latent ambiguity.19

¶ 13 The general import of the GCL insurance policy's original pollution-exclusion-clause—see policy paragraph "2. Exclusions (a) & (f)(1) a-d"20 — can be read to support a finding that an "environmental" limitation exists as to the original pollution-exclusion provision's scope. The base policy's limitation is couched in geographic terms and refers to clean up, removal and response to the effects of pollutants denoting an environmental element. However, the original limitations were removed or superceded by the special endorsement's terms. If we were to impose upon the special endorsement's pollution-exclusion-provision the same meaning and scope as that of the original contract's term, the former would be rendered redundant and the negotiation for and inclusion of the special endorsement would become a vain and useless act.21 The elimination of the language used in the original policy by way of the special endorsement is legally significant. The requirement that effect must be given to each part of the Bituminous/Cowen insurance contract (as amended by the special endorsement) compels today's construction of the contested term—i.e., that it does not contain an environmental limitation but rather excludes from coverage any property damage or bodily injury...

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