Plantation Pipe Line Co. v. Stonewall Ins. Co.

Decision Date20 November 2015
Docket NumberNo. A15A1359.,A15A1359.
Citation780 S.E.2d 501
CourtGeorgia Court of Appeals

Shattuck Ely, Atlanta, Thomas Kennedy Bick, for Appellant.

Paul Parker, Decatur, Nanette Laura Wesley, Atlanta, Wayne S. Karbal, Paula M. Wellons, Ashbrooke Tullis, for Appellee.

ELLINGTON, Presiding Judge.

Plantation Pipe Line Company filed this action in the Superior Court of Fulton County against five of its excess liability insurers, including Stonewall Insurance Company. Plantation and Stonewall filed cross-motions for summary judgment on the issue whether Plantation complied with a notice provision in the policy at issue. The trial court granted Stonewall's motion and denied Plantation's cross-motion. Plantation appeals, contending the trial court erred in concluding as a matter of law that it failed to give Stonewall timely notice of the occurrence at issue and thereby forfeited coverage under the Stonewall policy.1 For the reasons explained below, we affirm in part and reverse in part.

Summary judgment is proper "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law [.]" OCGA § 9–11–56(c).

Summary judgments enjoy no presumption of correctness on appeal, and an appellate court must satisfy itself de novo that the requirements of OCGA § 9–11–56(c) have been met. In our de novo review of the grant [or denial] of a motion for summary judgment, we must view the evidence, and all reasonable inferences drawn therefrom, in the light most favorable to the nonmovant.

(Citations and punctuation omitted.) Cowart v. Widener, 287 Ga. 622, 624(1)(a), 697 S.E.2d 779 (2010). When, as in this case, the parties file cross-motions for summary judgment, "each party must show [that] there is no genuine issue of material fact regarding the resolution of [the essential] points of inquiry and that each, respectively, is entitled to summary judgment; either party, to prevail by summary judgment, must bear its burden of proof." Morgan Enterprises, Inc. v. Gordon Gillett Business Realty, 196 Ga.App. 112, 395 S.E.2d 303 (1990). See also Wells Fargo Bank v. Twenty Six Properties, LLC, 325 Ga.App. 662, 754 S.E.2d 630 (2014) (accord). A grant of summary judgment must be affirmed if it is right for any reason, including for an alternate ground that the trial court chose not to address in granting summary judgment, so long as the movant raised the issue in the trial court and the nonmovant had a fair opportunity to respond. Georgia–Pacific, LLC v. Fields, 293 Ga. 499, 504(2), 748 S.E.2d 407 (2013) ; City of Gainesville v. Dodd, 275 Ga. 834, 839, 573 S.E.2d 369 (2002) ; Abellera v. Williamson, 274 Ga. 324, 326(2), 553 S.E.2d 806 (2001). The record shows the following undisputed facts.

The "occurrence" at issue took place on April 2, 1976, when turbine fuel was found to have leaked from a Plantation pipeline located in Cabarrus County, North Carolina. Plantation repaired the pipeline within 24 hours and compensated the only affected landowner $50 without resorting to insurance. More than thirty years later, on April 3, 2007, one of Plantation's workers found contaminated soil during maintenance of Plantation's pipeline, and the contamination was traced to the April 1976 leak. Three years later, on April 8, 2010, Plantation's claims manager, Mark Winkler, sent written notice to Stonewall that its policy was likely to be implicated by third-party claims arising from the contamination discovered in April 2007. Stonewall denied liability, based, inter alia, on its assertion that Plantation's written notice was not "prompt" as required by the policy.

The record shows that, at the time the initial leak occurred in Cabarrus County in April 1976, Plantation, had $1,000,000 in primary coverage under a comprehensive general liability policy issued by American Reinsurance Company (subject to a self-insured retention of $100,000), and had excess coverage, including $1 million under an umbrella policy issued by Lexington Insurance Company. In late 1975, Stonewall Insurance Company2 issued an "Excess Umbrella Liability Insurance" policy to Plantation for the period of November 30, 1975, through November 30, 1976, and agreed to indemnify Plantation for loss in excess of the limits of liability of specified underlying insurance. The declarations page shows that the excess umbrella policy was in the amount of "$1,000,000 part of $4,000,000 excess of $1,000,000 excess of underlying insurance."

A notice provision in the Stonewall policy provided:

When an occurrence takes place which, in the opinion of the insured, involves or may involve liability on the part of the company, prompt written notice shall be given by or on behalf of the insured to the company or its authorized agents.... Failure to so notify the company of any occurrence which at the time of its happening did not, in the opinion of the insured, appear to involve this policy but which, at a later date, appears to give rise to a claim hereunder shall not prejudice such claim provided notice is then given. For purposes of this policy, the word "opinion" shall mean informed opinion or opinion formed on advice of counsel.

In terms of Plantation's knowledge of the existence of the Stonewall policy, see Division 1(b), infra, the record shows that in 2004, in connection with other litigation, Plantation hired Risk International Services, Inc. ("RIS") to reconstruct Plantation's insurance coverage for the period 1950 to 2005. Among other documents, Plantation provided RIS with an annual insurance summary that had been prepared by Plantation's legal department each year, including 1976. As one of Plantation's lawyers deposed, the company understood that "occurrence" policies should never be destroyed because such policies could continue to provide coverage for damages resulting from an occurrence during the policy period, regardless when contamination was discovered or a third-party claim was asserted against the company. Despite this, at times a policy could not be located in Plantation's files, but its existence could be inferred from "secondary evidence," such as the legal department's annual insurance summary. The annual summary for 1976 showed a "first excess umbrella" layer of coverage provided by "Lexington and other companies" with a total of $5 million, excess of Plantation's comprehensive general liability coverage of $1 million (including a $100,000 self-insured retention). In 2005, a RIS consultant prepared the requested historical coverage chart for Plantation. Consistent with the 1976 annual summary, the RIS chart showed that, at the time of the original turbine fuel leak in April 1976, Plantation had a total of $5 million in coverage in excess of its primary liability coverage of $1 million; policies from "Lexington & Other Cos." accounted for $3.5 million of the excess coverage, and two other identified companies accounted for the remaining $1.5 million. According to the RIS consultant, she could not identify those companies other than Lexington accounting for the $3.5 million portion, and she did not have access to those policies.

On June 8, 2007, Plantation's remediation contractor reported to the Environmental Department the discovery of contaminated soil in April 2007, along with the contractor's analysis that the apparent source of the contamination was the turbine fuel spill from a Plantation pipe that was first discovered on April 2, 1976. By letter dated July 18, 2007, the Environmental Department demanded that Plantation obtain a site assessment and remediation plan. Plantation initially proposed a corrective action plan of monitored natural attenuation, that is, a plan without active remediation measures.

In August 2007, Robert Dillard, Plantation's vice president for risk management and insurance, sent notice of the contamination found in April 2007 and of the Environmental Department's July 2007 demand for action to Plantation's primary insurer and to three of its excess carriers, including Lexington. By letters dated February 14, 2008, Dillard advised certain of Plantation's liability insurers that the company had spent $661,000 in 2007 for investigation and remediation related to the site and for defense costs, and anticipated remedial costs of $200,000 in 2008 and another $1.2 million after 2008 to implement long-term remediation. His estimate, which totaled $2.061 million, was based on Plantation's plan to utilize "monitored natural attenuation" as the permanent remedy for the site, which was the least expensive means of remediation.

By letter dated October 8, 2009, the Environmental Department advised Plantation that its proposed natural attenuation remedy "would not be considered in lieu of active remediation for soil and groundwater impacts." Plantation submitted a revised corrective action plan to the Environmental Department on February 15, 2010, and received informal approval of that plan in early March. Jerry Aycock, Plantation's director of remediation and emergency response, deposed that only then could Plantation develop a realistic estimate of the cost of the permanent remedy for the site, and he prepared a new remediation cost projection, dated March 18, 2010.

In February 2010, about the same time Aycock was revising Plantation's remediation cost projection in connection with the occurrence at issue in this case, Plantation's coverage counsel asked Plantation's former lawyers at the firm of Hunton & Williams to search its archives for documents related to another spill case,3 and those lawyers discovered the Stonewall policy among other documents the firm had been holding in its archives since the early 1990s. By letter dated February 16, 2010, Plantation provided RIS with documents found in the Hunton & Williams...

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