Spinx Oil Co., Inc. v. Federated Mut. Ins. Co., 23801
| Decision Date | 02 June 1992 |
| Docket Number | No. 23801,23801 |
| Citation | 310 S.C. 477,427 S.E.2d 649 |
| Parties | SPINX OIL COMPANY, INC., Respondent-Appellant, v. FEDERATED MUTUAL INSURANCE COMPANY, Appellant-Respondent. . Heard |
| Court | South Carolina Supreme Court |
Bradford W. Wyche and J. Theodore Gentry, both of Wyche, Burgess, Freeman & Parham, P.A., Greenville, for appellant-respondent.
Robert E. Hoskins and Paul J. Foster, Jr., both of Foster, Plaxco and Foster, Greenville, for respondent-appellant.
Appellant-Respondent Federated Mutual Insurance Company (Federated) appeals the master-in-equity's final order declaring Federated liable under its policy of insurance for environmental cleanup of pollutants at certain of Respondent-Appellant Spinx Oil Company, Inc.'s, (Spinx Oil) gas station sites. Spinx Oil appeals the master's denial of attorney's fees. We affirm.
Federated provided comprehensive general liability coverage to Spinx Oil from the 1970's until 1984, when Spinx Oil obtained coverage from another insurer. As a result of negotiations between Stewart Spinks, the owner of Spinx Oil, and Tom McGrath, agent of Federated Mutual, Federated resumed general comprehensive liability coverage of Spinx Oil gas station sites from December 31, 1986, until December 31, 1990.
In September of 1989, Spinx Oil sold five gas station sites to British Petroleum Company (BP). When an environmental assessment conducted by BP prior to closing the sale revealed soil and groundwater contamination at each of the five sites, Spinx Oil notified Federated.
On March 6, 1990, Federated denied liability on four of the sites alleging that it had not received notice from Spinks of a pollution incident after the retroactive date as required under the terms of the policy of insurance. Federated asserted the further reason that in their investigation, Spinx Oil personnel had indicated that no pollution incident had occurred since the retroactive date.
Spinx Oil instituted this action seeking a declaration of coverage and attorney's fees. By order dated May 20, 1991, the case was referred to the master with authorization and direction to take all action necessary for entry of final judgment, directly appealable to this Court.
On June 12, 1991, the parties stipulated, inter alia, that Federated had issued to Spinx Oil a policy of insurance in which the five sites in question were listed; that environmental contamination was present at all listed sites; that Spinx Oil timely notified Federated of its claims under the policy; and that the cause of contamination at the four contested sites or when such contamination first occurred could not be determined.
During the proceedings before the master, Spinks testified that representations made by McGrath induced him to reinsure with Federated, including specific pollution liability coverage and the incentive that if Spinks signed up immediately, no on-site inspection would be required as a prerequisite to coverage. Federated did not refute Spinks' direct testimony through cross-examination and did not offer McGrath as a witness.
On August 9, 1991, the master issued his order finding Federated liable for cleanup coverage of the contested sites. The master concluded that the policy, in and of itself, was not dispositive of the issues under the limited facts and circumstances of the case and made no specific factual or legal findings with regard to contractual issues raised. Based upon the pleadings, exhibits and testimony, the master found that Federated offered Spinks a significant inducement in order to get its business and that Spinks accepted the offer; thus, Federated was bound by the inducements it made. The master found that no evidence had been submitted upon which to base attorney's fees, and declined to award Spinx Oil attorney's fees.
On August 23, 1991, Federated filed a motion for reconsideration, alteration of judgment, or a new trial. On August 26, 1991, Spinx Oil filed a countermotion in which it sought reconsideration of the denial of attorney's fees. The master issued an order on September 23, 1991, in which he denied both motions. This appeal followed.
First, Federated argues that the terms of the insurance policy are not ambiguous, and the master erred in considering parol evidence.
In disallowing coverage, Federated relied upon Policy Endorsement CG-F-9 (7/87), which affords reimbursement to the insured for "clean-up costs" initiated at the "insured site" ... provided "[t]he insured gives us immediate notice of any actual or suspected 'pollution incident' that commences on or after the Retroactive date shown in the declarations ..." The policy defines "pollution incident" as the "emission, discharge, release or escape of pollutants into or upon land, [or] water, provided that such emission, discharge, release or escape results in 'environmental damage'."
The master found that the terms of the policy were ambiguous with regard to the facts and circumstances of this case and relied upon evidence reflecting pre-contractual...
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