Hocker Oil Co., Inc. v. Barker-Phillips-Jackson, Inc.

• Decision Date: 23 June 1999
• Docket Number: Nos. 22552,BARKER-PHILLIPS-JACKSO,INC,22553,s. 22552
• Citation: 997 S.W.2d 510
• Parties: HOCKER OIL COMPANY, INC., Respondent-Appellant v., Defendant and Ranger Insurance Company, Appellant-Respondent.
• Court: Missouri Court of Appeals

Page 510

997 S.W.2d 510

HOCKER OIL COMPANY, INC., Respondent-Appellant v. BARKER-PHILLIPS-JACKSON, INC., Defendant and Ranger Insurance Company, Appellant-Respondent.

Nos. 22552, 22553.

Missouri Court of Appeals,

Southern District,

Division One.

June 23, 1999.

Motion for Rehearing and Transfer to

Supreme Court Denied July 13, 1999.

Application for Transfer Denied

Aug. 24, 1999.

Ronald C. Willenbrock, Julie A. Stoff, Amelung, Wulff & Willenbrock, P.C., St. Louis, for appellant Ranger Ins. Co.

Mark B. Leadlove, Jennifer M. Arthur, Bryan Cave, LLP, St. Louis, for respondent Hocker Oil Co.

JOHN E. PARRISH, Judge.

Ranger Insurance Co. (Ranger) appeals the judgment entered with respect to Count I of a five-count action brought by Hocker Oil Company, Inc., (Hocker). Hocker cross-appeals with respect to Count II of the judgment. Counts III, IV and V were directed to Barker-Phillips-Jackson, Inc. (Barker-Phillips). There was no disposition of any claim against Barker-Phillips. Judgment was entered on Counts I and II as permitted by Rule 74.01(b), the trial court finding no just reason for delay. Ranger's appeal is No. 22552. Hocker's appeal is No. 22553.

Pursuant to stipulation, Ranger was designated appellant and Hocker respondent. See Rule 84.04(j), Missouri Rules of Court (1998). ¹ Count I was a breach of contract action directed to an insurance policy Ranger issued to Hocker. Count II was an action for vexatious refusal to pay claims based on that policy. The trial court entered judgment for Hocker on Count I and judgment for Ranger on Count II. This court affirms in No. 22552 and No. 22553.

Facts

Hocker operates a number of service stations and related businesses in Missouri. Some premises on which the businesses are located are owned individually by John Hocker and Phyllis Hocker, president and vice-president, respectively, of Hocker. The corporation owns others. The corporation operates all of the businesses.

Ranger issued an insurance policy for the period February 1, 1987, to February 1, 1988, in which Hocker and Gas Plus, Inc., were named insureds. The policy was entitled "Special Multi-Peril Policy." The policy identified premises operated by Hocker at 29 locations as businesses to which insurance coverage was provided. The business premises for which insurance was provided included Hocker's Ironton, Missouri, station.

On January 12, 1988, a drain plug on an underground gasoline storage tank at the Ironton gasoline station failed. Approximately 2,000 gallons of gasoline were released into the ground. The gasoline migrated onto property owned by Edgar R. Bay and Norma G. Bay adjacent to Hocker's Ironton station. On January 13, 1988, Barker-Phillips, the insurance agent through whom Hocker purchased its insurance policy, notified Ranger of the occurrence. The means of notification was a form entitled "General Liability Loss Notice." It was directed to Ranger and identified the policy to which the loss referred by number and by the insured's name and address.

Ranger replied by letter dated January 21, 1988. Ranger's letter referred to a policy endorsement, GU271. Ranger concluded that by reason of the endorsement "there is no coverage for this loss." Policy endorsement GU271 is part of the policy Ranger issued to Hocker. The endorsement states that the policy's coverage does not apply:

(1) to bodily injury or property damage arising out of the actual, alleged or threatened discharge, dispersal, release or escape of pollutants:

(a) at or from premises owned, rented or occupied by the named insured;

(b) at or from any site or location used by or for the named insured or others for the handling, storage, disposal, processing or treatment of waste;

(c) which are at any time transported, handled, stored, treated, disposed of, or processed as waste by or for the named insured or any person or organization for whom the named insured may be legally responsible; or

(d) at or from any site or location on which the named insured or any contractors or subcontractors working directly or indirectly on behalf of the named insured are performing operations:

(i) if the pollutants are brought on or to the site or location in connection with such operations, or

(ii) if the operations are to test for, monitor, clean up, remove, contain, treat, detoxify or neutralize the pollutants.

(2) to any loss, cost or expense arising out of any governmental direction or request that the named insured test for, monitor, clean up, remove, contain treat, detoxify or neutralize pollutants.

Pollutants means any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste includes materials to be recycled, reconditioned or reclaimed.

Hocker responded that "gasoline is a product, not a pollutant"; that, therefore, the policy covered the loss caused by the gasoline leak. Hocker requested that Ranger provide a copy of any published definition Ranger had of the words "pollutant," "pollution," and "gasoline." Ranger's claim representative, Jack M. Connaughton, responded, "As to a definition of pollutant, I can only refer you to the last sentence at the bottom of endorsement GU 271, Pollution Exclusion." Mr. Connaughton stated, "As far as pollution and gasoline are concerned, I do not know of a published definition other than in a dictionary." On behalf of Ranger, Mr. Connaughton again denied coverage.

On April 22, 1988, Mr. and Mrs. Bay filed a lawsuit against Hocker seeking damages for personal injuries and property damage caused by the gasoline leak. That action was later settled. Hocker paid Mr. and Mrs. Bay $95,000. In exchange it received title to the property Mr. and Mrs. Bay owned in Ironton that adjoined the premises where the gasoline leak occurred. Hocker notified Ranger that the Bays' action had been settled. Hocker demanded reimbursement for the settlement amount and payment of attorney fees it incurred. Ranger denied coverage. Hocker filed this action.

Ranger moved for summary judgment on Counts I and II. Hocker moved for partial summary judgment on those counts as to the issue of liability. The trial court granted Ranger's motion as to Count II, Hocker's claim for vexatious refusal to pay. It granted Hocker's motion for summary judgment as to liability on Count I. The trial court entered a "Partial Summary Judgment Order" dated January 13, 1998, that included the acknowledgment and directive:

Inasmuch as counsel for the parties have indicated that they will try to come to an agreement as to the amount of Hocker's damages, further proceedings to prove Hocker's damages may be unnecessary. Accordingly, the parties are instructed to try to reach an agreement as to damages, and in the event they are unable to reach agreement, to request a hearing or other proceeding on damages.

The judgment from which Ranger and Hocker appeal was entered July 14, 1998. It recites:

Hocker and Ranger have now entered into a joint "Stipulation of Fact" concerning damages, which has been filed with this Court. Hocker has also presented the Court with a calculation of prejudgment[ ²] interest on the stipulated principal amounts from the date they were incurred through June 30, 1998.... Accordingly, this Court enters judgment in favor of plaintiff Hocker Oil Company against defendant Ranger Insurance Company in the amount of $232,057.01. Post-judgment interest shall accrue on that amount commencing July 1, 1998.

Appellate Review

This court's review of a summary judgment is essentially de novo. Woodfill v. Shelter Mut. Ins. Co., 878 S.W.2d 101, 102 (Mo.App.1994). "When reviewing a summary judgment, an appellate court looks ... to all pertinent materials presented to the trial court to determine if there is any material fact issue and that the moving party was entitled to judgment as a matter of law." Dent Phelps R-III School Dist. v. Hartford Fire Ins. Co., 870 S.W.2d 915, 917 (Mo.App.1994). In cases involving construction of insurance policies "[w]here there is no issue over a material fact with respect to interpretation of an insurance policy, but there is a question about the meaning of the language of the policy - whether the language affords coverage for a loss - the matter in dispute is a question of law." Woodfill, supra, at 103.

Ranger's Appeal--No. 22552

Ranger's first point asserts the trial court erred in granting partial summary judgment for Hocker as to Count I because the pollution exclusion in the multi-peril policy was applicable to preclude liability under that policy. Ranger contends the pollution exclusion in that policy is unambiguous; that any damages arising from the release of gasoline from Hocker's underground storage case were not covered.

Sargent Const. Co v. State Auto. Ins. Co., 23 F.3d 1324 (8 th Cir.1994), aptly and succinctly states Missouri's law regarding insurance policies found to be ambiguous.

Missouri law regards insurance policies as contracts to which the rules of contract construction apply. Peters v. Employers' Mut. Casualty Co., 853 S.W.2d 300, 301-03 (Mo. [banc] 1993). When an insurance policy is ambiguous, a court shall construe it using contractual rules of construction. American Family Mut. Ins. Co. v. Ward, 789 S.W.2d 791, 795 (Mo. [banc] 1990). Furthermore, if an insurance policy is ambiguous, the policy shall be construed against the insurer. Robin v. Blue Cross Hosp.. Serv.. Inc., 637 S.W.2d 695, 698 (Mo. [banc] 1982).

Id. at 1326-27 (footnotes omitted). If a policy is not ambiguous, its express terms will be enforced as written. Hempen v. State Farm Mut. Automobile Ins. Co., 687 S.W.2d 894 (Mo. banc 1985).

An ambiguous insurance policy is construed against the insurer because the policy's purpose is to provide protection. Krombach v. Mayflower Ins. Co., 827 S.W.2d 208, 210 (Mo. banc 1992). The insurer is the drafter of the policy. "[I]nsurers who seek to impose upon words of common speech an esoteric...