Town of Tieton v. General Ins. Co. of America
| Decision Date | 04 April 1963 |
| Docket Number | No. 36243,36243 |
| Citation | 61 Wn.2d 716,380 P.2d 127 |
| Parties | TOWN OF TIETON, a municipal corporation, Respondent, v. GENERAL INSURANCE COMPANY OF AMERICA, Appellant. |
| Court | Washington Supreme Court |
Halverson, Applegate & McDonald, Walter E. Weeks, Jr., Yakima, Bruce Maines, Seattle, for appellant.
Velikanje & Moore, Yakima, for respondent.
This is an appeal from a judgment of the Superior Court for Yakima County holding appellant, General Insurance Company, liable under the provisions of a liability insurance policy issued by it to respondent, Town of Tieton, a municipal corporation of the fourth class.
Respondent town constructed a sewage lagoon adjacent to the property of David and Jean Pugsley. Located on the property is a well from which the Pugsleys obtained their domestic water supply. The sewage lagoon was constructed approximately 245 to 300 feet (estimates varied) from the Pugsley well, which is 165 feet deep and is cased to a depth of 130 feet. As a result of the operation of this sewage facility, the Pugsley well became contaminated.
Thereafter, the Pugsleys recovered a judgment against the town on the theory of nuisance and unconstitutional damaging. Respondent claims that the injury to the Pugsley well was 'caused by accident' within the meaning of the insurance policy issued by appellant, which contains the following pertinent provision:
'To pay on behalf of the insured all sums * * * imposed upon him by law; * * *
'(c) for damages because of injury to or destruction of property, including the loss of use thereof, caused by accident.'
The case was tried to the court on the basis of certain stipulated facts, documentary evidence, and testimony, the latter being both oral and by deposition. It was stipulated that contamination of the well from the lagoon was caused by seepage or infiltration through the soil after the seepage penetrated the ground water flow and percolated through the soil below at an extremely slow rate of travel. It was also stipulated that it was impossible to determine precisely when the Pugsley well became contaminated by the lagoon after its operation began.
It was further stipulated that the lagoon was designed by and constructed upon the advice and with the approval of Messrs. Gray & Osborne, professional engineers employed by respondent. The lagoon was constructed by respondent in a manner which was approved by state and local health agencies. It was operated precisely in the manner planned, expected, desired and intended, and in the same manner as numerous other sewage lagoons similarly designed and planned have operated. However, respondent did not intend that the Pugsley well would become contaminated. The record indicates that seepage is a normal and expected result of the operation of this type sewage facility. The extent of the seepage depends upon the composition of the soil and strata of the earth.
There is no dispute over the fact that the state agencies, the town, and the engineers recognized the possibility of contamination of the Pugsley well. The following is an excerpt from an October 29, 1956, memorandum from the State Department of Health to the director of the State Pollution Control Commission:
The following letter from the State Department of Health was transmitted to the town with copies to the Yakima County Health Department and to the engineering firm employed by the city:
'STATE OF WASHINGTON
'DEPARTMENT OF HEALTH
'Division of
'ENGINEERING AND SANITATION
'Smith Tower
'Seattle 4
'November 16, 1956
'Honorable Mayor and Town Council
'Tieton, Washington
'Attention: C. J. Campbell, Clerk
'Gentlemen:
'We were glad to hear that the bids on the sewer system were well within the estimated cost and we hope that the town will be able to proceed with the project as planned.
'In reviewing the plans for the project, we noticed one item that we felt we should call to your attention so that you will fully realize the potential problem. The proposed lagoon is about five hundred feet from an existing house and this house receives its water supply from a well.
'It is impossible to tell if the percolation from the lagoon will affect the water quality of the well, but the potential hazard exists and a possibility of a damage suit against the city exists if the well does become contaminated.
'We suggest that this problem be discussed with your engineer.
'Very truly yours,
'SANITARY ENGINEERING SECTION
'R. K. McCormick
'District Engineer'
The Pugsleys, themselves, through their attorney, wrote to the mayor of Tieton complaining about the construction of the lagoon and threatening to hold the town and the public officials responsible for damages resulting from its installation. This letter complained of the invasion of the Pugsleys' property rights and the creation of a nuisance. However, the only specific fear expressed was that the lagoon would cause an unpleasant odor and attract rats and insects to the area.
Other possible sites for the proposed lagoon were considered by the town but the site that was selected was the only one large enough to accommodate the project and the others were discarded. The town first obtained a 90-day option to purchase the site upon which the lagoon was eventually constructed. This was done for the purpose, among other things, to afford the town an opportunity to investigate the possibility of contamination of the Pugsley well. From the very beginning, the hazard of contamination to this well was recognized. According to the testimony of the mayor, the town council did not discuss the above-quoted letter of November 16, 1956, from the Department of Health during the meeting at which the plan to construct the lagoon was finally approved. The mayor testified that the main basis of his and the town council's determination to assume the risk of the danger of contamination was the fact that the engineers had obtained the approval of the Pollution Control Commission and the State Health Department regarding the location and construction of the lagoon.
Robert K. McCormick, Senior Public Health Engineer for the Washington State Department of Health, who wrote the above-quoted letter to respondent warning it of the danger of contamination of the Pugsley well, also wrote a letter on behalf of the State Department of Health approving the construction of the lagoon project. (This letter was not produced at the trial.) Mr. McCormick testified that he had consulted with Milton Westin, the engineer employed by Gray & Osborne, who was in charge of the project, and that they both were of the opinion that, if it proved to be necessary because of contamination, the Pugsleys could always obtain water from the town of Tieton.
Mr. Westin testified that, after a copy of the letter of November 16, 1956, was received by Gray & Osborne, the engineering firm consulted further with the town officials concerning the possibility of contamination, and that this was done prior to the commencement of construction. Mr. Westin further testified that Gray & Osborne advised the town that the danger of contamination of the Pugsley well was very slight and that it would not be in the best interest of the town to make other arrangements to eliminate this remote possibility of contamination. (The testimony of both McCormick and Westin was by deposition.)
At this point, not only had the town purchased the lagoon site, but, according to the testimony of the mayor, there was no other suitable site available for that purpose. Strictly speaking, the town then had no choice but either to make some settlement with the Pugsleys before the lagoon was constructed or to proceed with construction and wait and see if any contamination occurred. The town officials deliberately chose the latter course and proceeded with the construction of the lagoon. This meant that they necessarily had to accept whatever hazard existed that the town might damage the Pugsley property as the result of the construction and operation of this public improvement. Private property cannot be taken or damaged for a public use without just compensation having first been made. See Art. 1, § 16, of the state constitution. 1
Cunningham v. Town of Tieton, 160 Wash.Dec. 439, 374 P.2d 375 (1962), is a case involving a factual situation identical with that existing in the lawsuit initiated by the Pugsleys. We characterized that action as 'a reverse eminent domain proceeding.' That characterization is equally appropriate to Pugsley's action.
Under the language contained in the insurance policy involved in ...
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