Robert E. Lee & Associates, Inc. v. Peters
| Decision Date | 19 November 1996 |
| Docket Number | No. 96-0172,96-0172 |
| Citation | 206 Wis.2d 509,557 N.W.2d 457 |
| Parties | ROBERT E. LEE & ASSOCIATES, INC., Plaintiff, v. David J. PETERS, individually, and Peters Service Center, Inc., Defendants-Third Party Plaintiffs-Counter Defendants-Fifth-Party Plaintiffs-Sixth Party Plaintiffs-Appellants, v. CARL KLEMM, INC., d/b/a Klemm Tanklines, a Wisconsin Corporation, Third Party Defendant-Fourth Party Plaintiff-Counter-Plaintiff, Great West Casualty Company, Fourth Party Defendant, Integrity Mutual Insurance Company, Fifth-Party Defendant-Respondent, d ]]]]] Richard Cisler, Sixth-Party Defendant. |
| Court | Wisconsin Court of Appeals |
On behalf of the defendants-third party plaintiffs-counter defendants-fifth-party plaintiffs-sixth party plaintiffs-appellants, David J. Peters and Peters Service Center, Inc., the cause was submitted on the briefs of Steven P. Bogart and Colleen D. Ball of Reinhart, Boerner, Van Deuren, Norris & Rieselbach, S.C. of Milwaukee.
On behalf of the fifth-party defendant-respondent, Integrity Mutual Insurance Company, the cause was submitted on the brief of Paul J. Pytlik of Otjen, Van Ert, Stangle, Lieb & Weir, S.C. of Milwaukee.
Before CANE, P.J., and LaROCQUE and MYSE, JJ.
David J. Peters and Peters Service Center, Inc., (Peters), appeal a summary judgment granted in favor of Integrity Mutual Insurance Company (Integrity). Peters asserts that Integrity's commercial property insurance policy affords coverage to Peters for costs incurred to remediate contamination on its property, and that Integrity's commercial general liability policy (CGL) obligates Integrity to indemnify and defend Peters against Klemm's counterclaim.
Integrity argues that its commercial property policy and CGL do not afford coverage to Peters. We conclude that Peters is not covered under Integrity's commercial property policy or the personal injury provision of Integrity's CGL policy, but that there is coverage for the groundwater contamination under the property damage provision of the products/completed operations form of Integrity's CGL.
The relevant facts are not disputed. David J. Peters owns and operates Peters Service Center, a gas station located in Green Bay. The gas station stores gasoline in underground storage tanks. The tank for unleaded gasoline holds 8,000 gallons of fuel.
On October 18, 1991, at 9:15 p.m., Peters measured 23.5 inches, or 1,526 gallons, of gasoline in its unleaded fuel tank. Peters ordered 6,000 gallons of unleaded gas from Grosskopf Oil, Inc., which subcontracted delivery of the gas to Klemm. Later that night, at approximately 11:45 p.m., Klemm's employee, Richard Cisler, delivered a load of gasoline to Peters. After Cisler measured 22.5 inches 1 of gasoline in Peters' unleaded fuel tank, he pumped 6,500 gallons of unleaded gasoline, 500 more gallons than Peters ordered, into the tank.
On October 19, 1991, Peters discovered gasoline in the manhole for the unleaded tank fill pipe and recognized that a gas spill had occurred. Peters promptly notified the Wisconsin Department of Natural Resources (DNR) and retained Robert E. Lee & Associates, Inc., an environmental consultant, to investigate the spill and develop a remediation plan. Lee's test results indicated that the groundwater in the vicinity of Peters Service Center was contaminated with unleaded gasoline.
The DNR investigated the spill, issued a notice of violation of § 144.76, STATS., the hazardous substance spills statute, to Klemm, and ordered Klemm to hire an environmental consultant to investigate the contamination and prepare a remediation plan. The DNR concluded that soil and groundwater contamination had occurred at the Peters site. Klemm's consultant excavated soil from the site, constructed monitoring wells and analyzed numerous soil samples. The test results indicated that the soil contamination was not the result of a single spill, but instead was caused by spills of gasoline produced prior to 1991, as well as the unleaded gasoline delivered by Klemm on October 19, 1991. 2
This appeal arises from a lawsuit filed by Lee against Peters, seeking payment for the environmental remediation services it provided to Peters. Peters filed a third-party action against Klemm, contending that Klemm was responsible for the spill. Klemm filed a fourth-party complaint against its insurer, Great West Insurance Company, and a counterclaim against Peters. Klemm subsequently joined Great West on the grounds that coverage was available to Klemm.
Klemm's counterclaim against Peters alleged that much of the contamination remediated through the cleanup was from gasoline spills predating the Klemm spill. Peters filed a fifth-party complaint against its insurer, Integrity Mutual Insurance Company, claiming that the damages alleged in the counterclaim were covered by Integrity. Integrity filed a sixth-party action against Richard Cisler, Klemm's employee.
Peters' fifth-party action against Integrity is the subject of this appeal. The allegations in Klemm's counterclaim involve the response costs incurred by Klemm to remediate the environmental contamination at the Peters site. At issue in this appeal are the applicability and interpretation of various provisions of Integrity's insurance policy.
The construction of an insurance policy presents a question of law, which we review independently of the trial court. American States Ins. Co. v. Skrobis Painting & Decor., Inc., 182 Wis.2d 445, 450, 513 N.W.2d 695, 697 (Ct.App.1994). We review summary judgments de novo. Id. Summary judgment is appropriate "if the pleadings, depositions, answers, admissions and affidavits show that there is no genuine issue of material fact and, as a matter of law, that the moving party is entitled to judgment." Id.
Several general principles guide the interpretation of an insurance policy in Wisconsin. The court must construe the words of the policy's provisions as would a reasonable person in the position of the insured. School District of Shorewood v. Wausau Ins. Cos., 170 Wis.2d 347, 367, 488 N.W.2d 82, 88-89 (1992). In order to determine whether the insurer has a duty to defend the claim, the court must compare the allegations in the complaint against the insured to the terms of the policy. Id. at 364-65, 488 N.W.2d at 87-88. The court must narrowly construe policy exclusions against the insurer and resolve any ambiguities in the policy in favor of coverage. Smith v. Atlantic Mut. Ins. Co., 155 Wis.2d 808, 811, 456 N.W.2d 597, 598 (1990).
Peters argues that Integrity's commercial property policy affords insurance coverage because the damage caused to Peters was a loss related to a vehicle when Klemm unloaded the gasoline from his truck. We disagree. At issue are the following provisions regarding the cleanup and removal of pollutants:
We will pay your expense to extract "pollutants" from land or water at the described premises if the release, discharge or dispersal of the "pollutants" is caused by or results from a Covered Cause of Loss that occurs during the policy period.
"Pollutants" are defined in the policy as "any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste."
The policy's Cause of Loss-Special Form expressly excludes the following occurrences from coverage:
Release, discharge or dispersal of "pollutants" unless the release, discharge or dispersal is itself caused by any of the "specified causes of loss". But if loss or damage by a Covered Cause of Loss results, we will pay for the resulting damage caused by the "specified cause of loss".
"Specified Cause of Loss" means the following: Fire; lightning; explosion; windstorm or hail; smoke; aircraft or vehicles; riot or civil commotion; vandalism; leakage from fire extinguishing equipment, sinkhole collapse; volcanic action; falling objects; weight of snow, ice or sleet; water damage. (Emphasis added.)
Although Integrity's commercial property policy does not define "vehicles," Wisconsin courts have interpreted vehicular insurance provisions on a number of occasions. In some of these cases, the courts have adopted a broad interpretation of the terms "arising out of the use of a vehicle." For example, our supreme court determined that the accidental shooting of an insured passing motorist by a disabled deer hunter who was seated in the bed of his pickup truck arose out of the use of the truck for purposes of underinsured motorist insurance coverage. Thompson v. State Farm Mut. Auto. Ins. Co., 161 Wis.2d 450, 463, 468 N.W.2d 432, 437 (1991); see also Kemp v. Feltz, 174 Wis.2d 406, 417, 497 N.W.2d 751, 756 (Ct.App.1993). 3
However, Integrity's commercial property policy does not refer to conduct "arising out of the use of" a vehicle. Instead, the policy refers to a vehicle as a "specified cause of loss." We recognize a significant difference between damages "arising out of" the use of a vehicle and damages "caused by" a vehicle. As stated by our supreme court, "The words 'arising out of the use' are very broad, general and comprehensive terms, and we believe they should generally be accorded a reasonably liberal construction." Tomlin v. State Farm Mut. Auto. Liab. Ins. Co., 95 Wis.2d 215, 225, 290 N.W.2d 285, 290-91 (1980).
These words are commonly understood to mean "originating from, growing out of, or flowing from, and require only that there be some causal relationship between the injury and the risk for which coverage is provided." However, this causal relationship is not of the type which would ordinarily be necessary to warrant a finding of "proximate cause" or "substantial factor" as those terms are used in imposing liability for negligent conduct. Rather, the focus of this "causation" inquiry is on the risk for which coverage has been afforded.
Garcia v. Regent Ins. Co., 167 Wis.2d 287, 294-95, 481 N.W.2d 660, 663-64 (Ct.App.1992) (citing ...
To continue reading
Request your trial
-
Johnson Controls v. Employers Ins. of Wausau
...and Leflar: Wisconsin's Choice of Law Melting Pot, 81 Marq. L. Rev. 761, 761 (1998). 44. Compare Robert E. Lee & Assocs., Inc. v. Peters, 206 Wis. 2d 509, 521, 557 N.W.2d 457 (Ct. App. 1996) ("the effect of Edgerton is not to deny any and all coverage to an insured whenever a case involves ......
-
Towns v. Northern Sec. Ins. Co.
...third party when it "entered the groundwater," which was held by the state as trustee for the people); Robert E. Lee & Assocs. v. Peters, 206 Wis.2d 509, 557 N.W.2d 457, 462 (Ct.App.1996) (holding that coverage of cleanup costs for pollution on insured's site causing groundwater contaminati......
-
Wisconsin Power & Light Co. v. Century Indem. Co.
...or contribution would be deemed claims for damages within the meaning of the CGL. See also Robert E. Lee & Associates, Inc. v. Peters, 206 Wis.2d 508, 557 N.W.2d 457, 462 (1996); Sauk County v. Employers Ins., supra, 550 N.W.2d at 442-43; cf. Patrons Oxford Mutual Ins. Co. v. Marois, supra,......
-
Liebovich v. Minnesota Ins. Co.
...exclusion in the policy, "a result that the parties could not have possibly intended." In Robert E. Lee & Associates, Inc. v. Peters, 206 Wis.2d 509, 524, 557 N.W.2d 457 (Ct.App. 1996), we rejected coverage for groundwater contamination under a much narrower and more specific policy term: "......
-
The Troublesome Trend Of D&O, E&O Pollution Exclusions
...as less scrupulous insurance companies have been known to attempt. See, for example, Robert E. Lee & Assocs. Inc. v. Peters, 557 N.W.2d 457 (Wis. App. 1996), which found that the "absolute" pollution exclusion is not applicable to products/completed These issues take on added urgency in......