Just v. Land Reclamation, Ltd.
| Citation | 456 N.W.2d 570,155 Wis.2d 737 |
| Decision Date | 19 September 1990 |
| Docket Number | ERA-K,No. 88-1656,88-1656 |
| Parties | , 157 Wis.2d 507, 59 USLW 2018, 20 Envtl. L. Rep. 21,407 Thomas S. JUST and Lisa P. Just, Roger Dosemegan, John Walterman and Barbara Walterman, Eugene Modesti and Minnie Modesti, Gilbert L. Paar and Patricia A. Paar, Charles Domanico and Rosemarie Domanico, Thomas A. Richardson and Fern D. Richardson, Bud Ruter and Bernice Ruter, Ralph V. Tuinstra, Kenneth Waters and Kathy Waters, Thomas Weyker and Maye Weyker, Verlyn Almond and Mildred Almond, Terry A. Andersen and Bettye J. Andersen, William Bachand, John E. Baker, Jr. and Mary E. Baker, Gary K. Bartels and Mary A. Bartels, Marvin Bosteder and Joan Bosteder, Allen Depatie and Delores Depatie, Richard E. Ehmcke and Mary V. Ehmcke, Bob Eliades and Olympia Eliades, Gary Field and June Field, Patrick Garner and Susan Garner, Kermit Hansen and Louise Hansen, Hugh Hardin and Nellie Hardin, Donald Hess and Ethel Hess, May V. Holtz, Dennis J. Jalensky and Laurie A. Jalensky, Lloyd A. Johnson and Ellen A. Johnson, James G. Kairis and Sandra L. Kairis, Richard Kiehlbauch and Pearle F. Kiehlbauch, James Kimes and Linda Kimes, Walter C. Klingenmeyer and Betty Klingenmeyer, Joesph Kristan and Ilona Kristan, Steven H. Kroll and Judith R. Kroll, Jerome Kronenberg and Dorothy Kronenberg, Joseph Kurali and Irma Kurali, Daniel V. Larsen and Karen R. Larsen, Herman Lederhaus and Gertrude Lederhaus, Cary E. Manderfield and Kim M. Manderfield, John W. Mikkonen and Holly D. Mikkonen, Anita J. Oakes, Kenneth Pauls and Virginia Pauls, Myron Payne and Doris Payne, George Perdikaris and Georgia Perdikaris, Mark A. Porcaro, Mark Purdy and Faya Purdy, Kurt Rasmussen and Barbara Rasmussen, Melvin Rose and Nancy Rose, Irene Roselle, James Shalbrack, Robert Smith and Jean Smith, Paul C. Sorensen, Chris Spielman and Susann Spielman, Patrick Sullivan and Janice L. Sullivan, Peter F. Tillema, Dennis Wojak and Pamela A. Wojak, Kenneth Beecher and Susan Beecher, Walter Fleuchaus and Dorothy Fleuchaus, Donald Gillette and Shirley Gillette, Daniel Je |
| Court | United States State Supreme Court of Wisconsin |
Joseph J. Muratore, Sr. (argued), Joseph J. Muratore, Jr. and Joseph J. Muratore, S.C., on the briefs, Racine, for defendant-third party plaintiff-appellant-petitioner.
J. Ric Gass (argued), Vicki L. Arrowood and Kasdorf, Lewis & Swietlik, on the brief, Milwaukee, for defendant-third party plaintiff-respondent.
Gregory B. Conway and Liebmann, Conway, Olejniczak & Jerry, S.C., Green Bay, and Thomas J. Dawson, Wisconsin Public Intervenor, of counsel, and Eugene R. Anderson, Thomas G. Rozinski and Anderson, Kill, Olick & Oshinsky, New York City, of counsel, amicus curiae, for Wisconsin Public Intervenor, Chemical Mfrs. Ass'n, Wisconsin Paper Council, Wisconsin Academy of Trial Lawyers and Wisconsin's Environmental Decade.
Robert C. Burrell and Borgelt, Powell, Peterson & Frauen, Milwaukee and Thomas W. Brunner, Marilyn E. Kerst, John W. Cavilia and Wiley, Rein & Fielding, Washington, D.C., of counsel, amicus curiae, for Wisconsin Ins. Alliance and Insurance Environmental Litigation Ass'n.
Plaintiffs in this case are property owners in Racine county who live near a landfill site operated by Land Reclamation, Ltd. (LRL). The plaintiffs' complaint alleges that the landfill was the source of unexpected and unintended pollution causing them bodily injury and property damage. The liability insurance policy issued by Bituminous Casualty Corporation (Bituminous) to LRL excluded pollution damages unless such damages were "sudden and accidental."
The court of appeals, agreed with Bituminous that the word "sudden" in the phrase "sudden and accidental" unambiguously means abrupt and immediate and therefore the damages alleged do not come within the coverage of the policy. The property owners argue that their damages are covered by the policy because the word "sudden" is ambiguous and may reasonably mean unexpected and unintended. The phrase is not defined in the policy. Recognized dictionaries differ in the primary meaning of the word. The insurance industry itself has attached different meanings to the word at different times.
We conclude that the word is reasonably susceptible to different meanings and is therefore ambiguous. It is a long standing principle of law that any ambiguity in an insurance contract must be construed in favor of the insured, particularly when such ambiguity appears, as it does here, in an exclusionary clause. We therefore hold that unexpected and unintended pollution damages are not excluded from coverage in the insurance policy. The decision of the court of appeals is reversed, and the matter is remanded to the trial court for further proceedings.
The LRL landfill is licensed for operation as a sanitary landfill by the Wisconsin Department of Natural Resources. In 1987, the plaintiffs commenced this action against LRL. Subsequently, Bituminous was pleaded into the action in the plaintiffs' second amended complaint.
Plaintiffs generally allege that over the course of time LRL operated the landfill negligently and in violation of federal, state and local law, rules, ordinances and regulations, resulting in water contamination, noise, dust, smells and blowing garbage. Individual plaintiffs also allege assorted medical problems and a local increase in the pest population. The allegations do not pinpoint any specific dates of discharges within the policy period.
Bituminous issued comprehensive general liability, comprehensive catastrophe liability and commercial umbrella liability policies to LRL from 1971 until September 1, 1986. The policies contained the following language in exclusion (f), the pollution exclusion:
This insurance does not apply:
. . . . .
(f) 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....
All of the policies issued by Bituminous to LRL afforded coverage for damages caused by an "occurrence." The final set of policies, covering periods from 1980 through 1986, defined "occurrence" as: "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[.]" 1
The policies also included a duty to defend clause. In July 1987, Bituminous originally undertook to defend LRL, but it withdrew in January, 1988, denying coverage for the allegations in the lawsuit citing the applicable policy provisions, and, in particular, exclusion (f), the policy's pollution exclusion. Bituminous then filed a motion for summary judgment in July, 1988, on grounds that the applicable policy provisions did not provide coverage for LRL for the facts as alleged in the plaintiffs' complaint and the facts of the case.
The trial court granted Bituminous' motion for summary judgment. In its memorandum decision dated August 3, 1988, the trial court cited three Wisconsin cases as controlling, Clark v. London & Lancashire Indemnity Co., 21 Wis.2d 268, 124 N.W.2d 29 (1963); City of Milwaukee v. Allied Smelting Corp., 117 Wis.2d 377, 344 N.W.2d 523 (Ct.App.1983); and State v. Mauthe, 142 Wis.2d 620, 419 N.W.2d 279 (Ct.App.1987) . Based on these cases, the trial court found that the term "sudden and accidental" did not apply to pollution damage occurring over a substantial period of time. The trial court then determined, based on this construction, that the record in this case did not contain any allegations of any events which raised genuine issues of material fact that could result in coverage. LRL appealed, and the plaintiffs joined LRL as intervenors on the appeal.
The court of appeals affirmed the trial court's grant of summary judgment concluding that the phrase "sudden and accidental" unambiguously means accidental and immediate. LRL petitioned this court for review pursuant to sec. 808.10, Stats., and we granted the petition.
The dispositive issue in this case is one of contract interpretation. The insurance policy itself does not define the meaning of the terms "sudden and accidental." The interpretation of words or clauses in an insurance contract is a question of law which this court decides independently of the decisions of the lower courts. Garriguenc v. Love, 67 Wis.2d 130, 133, 226 N.W.2d 414 (1975).
In interpreting the definition of the phrase "sudden and accidental," we must first determine whether the language is ambiguous when used in the context of the policy's exclusionary clause. 2 Words or phrases in a contract are ambiguous when they are susceptible to more than one reasonable interpretation. Katze v. Randolph & Scott Mut. Fire Ins., 116 Wis.2d 206, 213, 341 N.W.2d 689, 692 (1984). If we determine that the phrase is ambiguous, we must construe the ambiguity...
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