Johnson Controls, Inc. v. Employers Ins. of Wausau
| Decision Date | 27 December 2001 |
| Docket Number | No. 01-1193.,01-1193. |
| Citation | 250 Wis.2d 319,2002 WI App 30,640 N.W.2d 205 |
| Parties | JOHNSON CONTROLS, INC., Plaintiff-Appellant, v. EMPLOYERS INSURANCE OF WAUSAU, a mutual company (f/n/a Employers Mutual Liability Insurance Company of Wisconsin), Affiliated FM Insurance Company, AIU Insurance Company, Allstate Insurance Company (as successor to Northbrook Excess and Surplus Insurance Company), American Employers' Insurance Company, American Home Assurance Company, American Motorists Insurance Company, Central National Insurance Company of Omaha, Employers Mutual Casualty Company, Employers Reinsurance Corporation, Federal Insurance Company, First State Insurance Company, Granite State Insurance Company, Highlands Insurance Company, Landmark Insurance Company, London Market (certain underwriters at Lloyd's London and London Market Insurance Companies), National Union Fire Insurance Company of Pittsburgh, PA, Northbrook Excess and Surplus Insurance Company (as predecessor to Allstate Insurance Company), Puritan Insurance Company (f/n/a Manhattan Fire and Marine Insurance Company), Stonewall Insurance Company, Transamerica Premier Insurance Company, Travelers Indemnity Company, United National Insurance Company, Zurich Insurance Company, International Insurance Company, and Westchester Fire Insurance Company, Defendants-Respondents, ALLIANZ UNDERWRITERS INSURANCE COMPANY, American Centennial Insurance Company, American Insurance Company, Associated International Insurance Company, California Union Insurance Company, Continental Insurance Company, Fireman's Fund Insurance Company, Harbor Insurance Company, North Star Reinsurance Corporation, and Republic Insurance Company, Defendants. |
| Court | Wisconsin Court of Appeals |
On behalf of the plaintiff-appellant, the cause was submitted on the briefs of Matthew J. Flynn, Jeffrey O. Davis and Keith A. Bruett, of Quarles & Brady LLP, Milwaukee and John P. Kennedy of Johnson Controls, Inc., Milwaukee.
On behalf of the defendant-respondent First State Insurance Company, the cause was submitted on the brief of Paul J. Pytlik and Michelle M. Stoeck of Hills Legal Group, Ltd., Waukesha.
On behalf of the defendant-respondent Employers Insurance of Wausau, the cause was submitted on the brief of Timothy J. Muldowney and Todd G. Smith of La Follette Godfrey & Kahn, Madison and Keith A. Dotseth and Patrick J. Boley of Larson King, LLP, St. Paul, Minnesota and Michael J. Cohen of Meissner Tierney Fisher & Nichols, S.C., Milwaukee.
On behalf of the defendant-respondent Transamerica Premier Insurance Company, the cause was submitted on the brief of Edwin J. Hull, III and David P. Cutler of Cutler & Hull, Chicago, Illinois.
On behalf of the defendant-respondent American Employers' Insurance Company, the cause was submitted on the brief of Robert C. Moore and Christian D. Ambler of Stone & Moore, Chartered, Chicago, Illinois.
On behalf of the defendants-respondents American Home Assurance Company, AIU Insurance Company, Granite State Insurance Company, Landmark Insurance Company, and National Union Fire Insurance Company of Pittsburgh, PA, the cause was submitted on the brief of Blaise S. Curet of Sinnott, Dito, Moura & Puebla P.C., San Francisco, California and Jeffrey A. Schmeckpeper of Kasdorf, Lewis & Swietlik, S.C., Milwaukee.
On behalf of the defendant-respondent The Travelers Indemnity Company, the cause was submitted on the brief of Barry R. Ostrager, David J. Woll and Jonathan K. Youngwood of Simpson Thacher & Bartlett, New York, New York and Janice A. Rhodes of Kravit, Gass, Hovel & Leitner, S.C., Milwaukee. Before Wedemeyer, P.J., Fine and Curley, JJ.
¶ 1.
Johnson Controls, Inc. appeals from an order and a judgment wherein the trial court found that no insurance coverage existed for twenty-one environmentally contaminated landfill sites. Johnson Controls claims the trial court erred when it ruled that all of the sites at issue do not involve "damages." Johnson Controls concedes that ten of the twenty-one sites do not fall into a category which triggers insurance coverage, but argues that the remaining eleven sites should be covered by insurance. Because the trial court's findings of fact (that all twenty-one sites are not covered by the insurance policies) are not clearly erroneous, we affirm.
¶ 2. In 1989, Johnson Controls brought suit against Employers Insurance of Wausau and a host of other insurance companies, seeking coverage for costs it incurred relating to the environmental cleanup of twenty-one contaminated landfill sites.2 Before the suit was resolved, the Wisconsin Supreme Court decided City of Edgerton v. General Casualty Co., 184 Wis. 2d 750, 517 N.W.2d 463 (1994). In Edgerton, the supreme court concluded that there was no coverage provided for an insured who cleans up an environmentally contaminated site which it either owns or does not own, pursuant to a government directive or request under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. §§ 9601, et seq. ("CERCLA"), or its state counterparts. Edgerton,184 Wis. 2d at 782-86.
¶ 3. As a result, the insurance companies in this case filed motions seeking summary judgment. The trial court granted the motions and dismissed the case as to all sites. Johnson Controls appealed the various judgments and orders.
¶ 4. We decided the appeal on October 13, 1998, and remanded the matter "for the entry of a global judgment, broken down into subparts that recite: (1) the property involved; (2) the insurance company or companies and the relevant dates of their policies that relate to that property; and (3) the result required by this opinion." Johnson Controls, Inc. v. Employers Ins. of Wausau, Nos. 95-1796 & 95-2591, unpublished slip op. at 5 (Wis. Ct. App. Oct. 13, 1998) (Johnson Controls I). On remand, the trial court complied with our directive and found that elements were present at each of the twenty-one sites so that each fell into a category where no coverage was provided. Johnson Controls appeals from that order.
[1]
¶ 5. In the first appeal of this case, we set forth four categories to describe the sites and related situations involved.3 The first category consists of an insured who is responsible for cleaning up the contamination at a site pursuant to a directive issued by a government under CERCLA or its state counterparts. The costs of this remediation are not "damages." Edgerton, 184 Wis. 2d at 782-86. Although Johnson Controls believes that Edgerton was decided wrongly, we are obligated to follow its dictates. There is no insurance coverage in connection with remediation of sites that fall under the first category.
[2]
¶ 6. The second category consists of an insured who is responsible for at least part of the contamination of a site that it does not own, but has not been directed by a government to remediate the site. A governmental agency has, however, directed others responsible for the contamination — either the site's owner or those who also polluted the property — to clean it up and they, in turn, sue the insured to recover the cleanup costs attributable to the insured. This situation is governed by General Casualty Co. v. Hills, 209 Wis. 2d 167, 561 N.W.2d 718 (1997), which held that an action by a non-governmental entity seeking those costs is a suit for "damages," for which there is coverage under the comprehensive general liability policies. Id. at 180. "[U]nlike Edgerton, neither the [Environmental Protection Agency] nor [Wisconsin Department of Natural Resources] have [sic] requested or directed [the insured/polluter] to develop a remediation plan or incur remediation and response costs under CERCLA or an equivalent state statute." Id. See also Wisconsin Pub. Serv. Corp. v. Heritage Mut. Ins. Co., 209 Wis. 2d 160, 561 N.W.2d 726 (1997)
(); Spic & Span, Inc. v. Continental Cas. Co., 203 Wis. 2d 118, 552 N.W.2d 435 (Ct. App. 1996) (). Under Hills, there is insurance coverage in connection with this second category of sites.
[3]
¶ 7. The third category presents a situation where the insured is responsible for at least part of the contamination of a site that it does not own, and has been directed by a government to remediate the site, but has not done so. The insured is sued by the government to recover money it spent to clean up the site. There is no insurance coverage in connection with the scenarios encompassed by category three. Regent Ins. Co. v. City of Manitowoc, 205 Wis. 2d 450, 463, 556 N.W.2d 405 (Ct. App. 1996) (). Johnson Controls argues that the supreme court's decision in Hills overruled Regent. We rejected this argument when we first considered the appeal, and we reject it again here for the reasons explained in our earlier opinion.4 As noted, the vitality of Regent was reaffirmed post-Hills by Hydrite Chemical Co. v. Aetna Casualty & Surety Co., 220 Wis. 2d 26, 39 n.5, 582 N.W.2d 423 (Ct. App. 1998).
[4]
¶ 8. The fourth category encompasses situations where the insured is responsible for at least part of the contamination of a site that it does not own, and has been directed by a government entity to remediate the...
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