Hydrite Chemical Co. v. Aetna Cas. & Sur. Co.
| Decision Date | 07 May 1998 |
| Docket Number | 95-2840,97-0719,Nos. 94-0032,s. 94-0032 |
| Citation | 220 Wis.2d 26,582 N.W.2d 423 |
| Court | Wisconsin Court of Appeals |
| Parties | HYDRITE CHEMICAL CO., and Avganic Industries, Inc., Plaintiffs-Appellants, d v. The AETNA CASUALTY & SURETY CO., Affiliated Insurance Co., n/k/a Affiliated FM Insurance Co., American Casualty Co. of Reading, PA., American Motorist Ins. Co., Canadian Universal Ins. Co., Chicago Insurance Co., Continental Casualty Co., First State Ins. Co., First State Underwriters Agency of New England Reinsurance Corp., a/k/a New England Reinsurance Corp., Granite State Insurance Co., Great American Surplus Lines Insurance Co., a/k/a American Empire Surplus Lines Ins. Co., The Home Indemnity Company, Home Insurance Company, Integrity Insurance Company in Liquidation, Samuel F. Fortunato, Commissioner of Insurance of the State of New Jersey, and Michael Miron, in his capacity as Liquidator of Integrity Insurance Company, International Surplus Lines Ins. Co., Interstate Fire & Casualty Co., Northbrook Excess & Surplus Ins. Co., as predecessor to Allstate Insurance Company, Old Republic Ins. Co., Transcontinental Insurance Co., United States Fire Ins. Co., Walbrook Insurance Company Limited, Certain Underwriters at Lloyd's of London, and other companies, Defendants-Respondents. |
On behalf of the plaintiffs-appellants, the cause was submitted on the briefs of Raymond F. Krueger, David V. Meany and Douglas P. Dehler of Michael, Best & Friedrich of Milwaukee.
On behalf of the defendants-respondents, the cause was submitted on the briefs of Todd A. Becker, Richard G. Niess of Coyne, Niess, Schultz, Becker & Bauer, S.C. of Madison, and James K. Horstman, Anthony P. Katauskas and Mary A. Sliwinski of Williams & Montgomery, Ltd., of Chicago.
On behalf of the defendants-respondents, The Aetna Casualty and Surety Company, n/k/a Travelers Casualty and Surety Company, the cause was submitted on the brief of Thomas R. Schrimpf and Susan R. Tyndall of Hinshaw & Culbertson of Milwaukee.
Before DYKMAN, P.J., and ROGGENSACK and DEININGER, JJ.
Hydrite Chemical Co. and Avganic Industries, Inc. (hereinafter "Hydrite") appeal from orders for summary judgment dismissing their insurance coverage action against the defendant insurance companies. Hydrite argues that the trial court erred in Hydrite also appeals from an order compelling it to disclose certain documents to the insurers. Hydrite argues that the documents are protected by the attorney-client privilege and work product doctrine. We have already concluded that the trial court properly granted the insurers' motions for summary judgment. Because the insurers have established that they are entitled to judgment as a matter of law without the withheld documents, the question of whether Hydrite properly withheld the documents is moot. Therefore, we dismiss the appeal from the order compelling discovery. 1
concluding that the insurers do not have a duty to indemnify Hydrite for the cost of investigating and remediating soil and groundwater contamination in the vicinity of Hydrite's chemical facility in Cottage Grove, Wisconsin. We agree with the trial court that City of Edgerton v. General Cas. Co., 184 Wis.2d 750, 517 N.W.2d 463 (1994), precludes coverage. Accordingly, we affirm the trial court's orders granting the insurers' motions for summary judgment.
Effective July 30, 1989, the United States Environmental Protection Agency (EPA) issued the federal portion of a Resource Conservation and Recovery Act Hazardous Waste License (RCRA License) to Hydrite for its Cottage Grove facility. The license required Hydrite to develop and implement a corrective action plan to address environmental damages to property caused by the release of spent industrial solvents from an old drum storage area at the facility.
Hydrite requested indemnification from the defendant insurers for the sums paid and to be paid for the environmental investigation and remediation at the Cottage Grove facility, including the development and implementation of the corrective action plan imposed by the RCRA License. The insurers denied coverage. In April 1991, Hydrite filed a lawsuit against the insurers, seeking coverage for the costs incurred during the investigation and remediation of the contamination at the Cottage Grove facility.
During discovery, Hydrite withheld certain documents under the attorney-client privilege and work product doctrine. Hydrite produced a privilege log identifying the documents it withheld. The insurers moved to compel the production of many of the documents. The trial court ordered Hydrite to produce a number of them. We granted Hydrite's petition for leave to appeal the discovery order. (Appeal No. 94-0032.)
After briefing on the interlocutory appeal was complete, the Wisconsin Supreme Court decided City of Edgerton v. General Cas. Co., 184 Wis.2d 750, 517 N.W.2d 463 (1994). Certain insurers moved the court of appeals to remand the case so that the trial court could apply the holding of Edgerton. We did so, staying the appeal and directing the trial court to consider the Edgerton issues on remand.
On remand, both Hydrite and the insurers moved for summary judgment. The trial court granted the insurers' motion and dismissed Hydrite's complaint, concluding that, under the holding of Edgerton, the insurers did not have a duty to defend or indemnify Hydrite. Hydrite appealed. (Appeal No. 95-2840.)
Hydrite moved this court to remand the case again for the trial court to resolve the Edgerton issue as to certain insurers that did not join in the first motion for summary judgment. We granted Hydrite's motion. On remand, Hydrite and the insurers stipulated to the terms of certain "lost policies." The trial court again concluded that Edgerton precluded coverage and granted summary judgment to the remaining insurers. Hydrite appealed. (Appeal No. 97-0719.) All three appeals have been consolidated before this court.
We review summary judgments de novo, using the same methodology as the trial court. See Green Spring Farms v. Kersten, 136 Wis.2d 304, 315-16, 401 N.W.2d 816, 820 (1987). Summary judgment is appropriate In deciding the motion, the trial court first considers the pleadings to determine whether the complaint states a claim for which relief may be granted and whether the answer states a defense. See State Bank v. Elsen, 128 Wis.2d 508, 511, 383 N.W.2d 916, 917 (Ct.App.1986). If they do, the moving party's evidentiary facts are examined to determine whether that party has made a prima facie case for summary judgment. If the moving party has made a prima facie case, the opposing party's affidavits and proofs are considered to determine whether a genuine issue exists as to any material fact. Id. If a material factual issue exists, summary judgment is inappropriate. Id.
when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. See § 802.08(2), STATS.; Germanotta v. National Indem. Co., 119 Wis.2d 293, 296, 349 N.W.2d 733, 735 (Ct.App.1984).
Hydrite argues that the trial court misconstrued City of Edgerton v. General Cas. Co., 184 Wis.2d 750, 517 N.W.2d 463 (1994), and inappropriately granted summary judgment. The insurers contend that the trial court properly granted them summary judgment under the supreme court's holding in Edgerton. Accordingly, we will start our analysis with Edgerton.
In Edgerton, Edgerton Sand & Gravel, Inc. (ES & G) owned property that the City of Edgerton (City) leased and used as its landfill from 1968 to 1984. Id. at 758 & n. 5, 517 N.W.2d at 468. The groundwater at the site became contaminated. Id. at 759, 517 N.W.2d at 468. In 1989, the City and ES & G each received a letter from the EPA requesting them to respond to a request from the Wisconsin Department of Natural Resources (DNR) to provide information regarding the disposal of hazardous substances at the landfill. Id. at 759-60, 517 N.W.2d at 468. In 1990, they each received a letter from the DNR requesting them to propose a plan for remediation of the site and any problems associated with it. Id. at 760, 517 N.W.2d at 468.
The City and ES & G forwarded these letters to their insurance carriers, and ES & G specifically requested its insurers to pay any costs incurred regarding the site and to provide a defense. Id. at 760-62, 517 N.W.2d at 468-69. The insurers refused to provide coverage or a defense. Id. at 762, 517 N.W.2d at 469. Both the City and ES & G filed a declaratory judgment action against the insurers, seeking a determination that the insurers had a duty to defend and indemnify them for any liability arising out of DNR or EPA claims, actions or suits involving the contaminated site. Id.
In Edgerton, the relevant insurance policies read:
The company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of
A. bodily injury or
B. property damage
to which this insurance applies, caused by an occurrence, and the company shall have the right and duty to defend any suit against the insured seeking damages on account of such bodily injury or property damage .
Id. at 769, 517 N.W.2d at 472 (emphasis omitted).
The supreme court held that "damages" as used in insurance policies means legal damages, generally pecuniary in nature, designed to compensate for past wrongs or injuries. Id. at 783, 517 N.W.2d at 478. "Damages" does not include the cost of complying with an injunctive decree. Id. The court noted that remediation and response costs assigned under CERCLA 2 and equivalent state statutes 3 are, by definition, considered to be equitable relief. Id. at 784, 517 N.W.2d at 478. The court continued [A]s an equitable form of relief, response costs were not designed to compensate for past wrongs; rather, they were...
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