Upjohn Co. v. New Hampshire Ins. Co.
| Decision Date | 30 August 1989 |
| Docket Number | No. 916075,GC-809000,Docket Nos. 98969,99012 and 99145,916075 |
| Citation | 178 Mich.App. 706,444 N.W.2d 813 |
| Parties | The UPJOHN COMPANY, a Delaware corporation; John Russell Butler, a foreign insurance underwriter; First State Insurance Company, issuing property policy, a Delaware corporation, Plaintiffs-Appellees, v. NEW HAMPSHIRE INSURANCE COMPANY, a New Hampshire corporation; Granite State Insurance Company, a New Hampshire corporation; the Insurance Company of the State of Pennsylvania, a foreign corporation; and First State Insurance Company, issuing excess liability policy, a Delaware corporation, jointly and severally, Defendants, and Allstate Insurance Company, successor to Northbrook Excess and Surplus Insurance Company, an Illinois corporation, Defendant-Appellant, and Insurance Environmental Litigation Association, Amicus Curiae. The UPJOHN COMPANY, a Delaware corporation; John Russell Butler, a foreign insurance underwriter; First State Insurance Company, issuing property policy, a Delaware corporation, Plaintiffs-Appellees, v. NEW HAMPSHIRE INSURANCE COMPANY, a New Hampshire corporation; Allstate Insurance Company, successor to Northbrook Excess and Surplus Insurance Company, an Illinois corporation; the Insurance Company of the State of Pennsylvania, a foreign corporation; and First State Insurance Company, issuing excess liability policy, a Delaware corporation, jointly and severally, Defendants, and Granite State Insurance Company, a New Hampshire corporation, Defendant-Appellant, and Insurance Environment Litigation Association, Amicus Curiae. The UPJOHN COMPANY, a Delaware corporation; John Russell Butler, a foreign insurance underwriter; First State Insurance Company, issuing property policy, a Delaware corporation, Plaintiffs-Appellants, v. NEW HAMPSHIRE INSURANCE COMPANY, a New Hampshire corporation; Granite State Insurance Company, a New Hampshire corporation; Allstate Insurance Company, successor to Northbrook Excess and Surplus Insurance Company, an Illinois corporation, jointly and severally, Defendants, and the Insurance Company of the State of Pennsylvan |
| Court | Court of Appeal of Michigan — District of US |
Garan, Lucow, Miller, Seward, Cooper & Becker, P.C. by Thomas W. Emery and Robert D. Goldstein, Detroit, and Phillip J. McGuire, Chicago, Ill., of counsel, for Allstate Ins. Co.
Buesser, Buesser, Blank, Lynch, Fryhoff & Graham by William R. Buesser and Neil K. Disney, Bloomfield Hills, for First State Ins. Co.
Butzel, Long, Gust, Klein & Van Zile by Keefe A. Brooks, Detroit, and Piper & Marbury by Thomas W. Brunner, Jeffrey F. Liss, and John W. Cavilia, Washington, D.C., of counsel, for Ins. Environmental Litigation Ass'n, amicus curiae.
Denenberg, Tuffley, Bocan, Jamieson, Black, Hopkins & Ewald, P.C. by Julius Denenberg, William G. Jamieson, George F. Curran, III, and Dana L. Ramsay, Southfield, for plaintiffs.
Zamplas, Paskin, Nagi, Baxter, Johnson & Walker, P.C. by Dennis Zamplas, Jeannette A. Paskin, and William J. Selinsky, Troy, for New Hampshire Ins. Co., Granite State Ins. Co., and the Ins. Co. of State of Pa.
Before J.H. GILLIS, P.J., and SHEPHERD and SAWYER, JJ.
In case number 98969, defendant-appellant Allstate Insurance Company, successor to Northbrook Excess and Surplus Insurance Company (NESCO), appeals as of right from the circuit court's order granting plaintiffs' motion for summary disposition pursuant to MCR 2.116(C)(10). In case number 99012, defendant-appellant Granite State Insurance Company appeals as of right from the circuit court's order granting plaintiffs' motion for summary disposition pursuant to MCR 2.116(C)(10). In case number 99145, plaintiffs-appellants appeal as of right from the circuit court's order granting defendants-appellees' motion for summary disposition pursuant to MCR 2.116(C)(10). We affirm in case numbers 98969 and 99145, but modify, in part, in case number 99012.
On August 13, 1982, plaintiff The Upjohn Company began its annual production of Clindamycin, an antibiotic, in Puerto Rico. As a result, two by-products, carbon tetrachloride and acetonitrile, were produced. The by-product mixture was sixty-five percent carbon tetrachloride and thirty-five percent acetonitrile. These toxic by-products were pumped into an underground tank FA-129 for storage. Tank FA-129 had been in use since May 29, 1974, and had not been used since the previous year's Clindamycin production. Tank FA-129 had a ten-thousand-gallon capacity. Each weekday, an Upjohn employee measured the tank's level by using a stick. The employee recorded the level of material in the tank on a sheet and turned the sheet over to his supervisor. The supervisor reviewed the sheet to determine if the tank was full and should be emptied. Prior to August 16, 1982, the tank level remained constant at ten inches, approximately 475 gallons.
On August 16, 1982, Upjohn pumped approximately 1,700 gallons of by-product material into tank FA-129. That day, the tank level was three inches, approximately eighty gallons. On August 18, 19, 24, 25, 26, 30 and 31 as well as on September 1, 1982, approximately 1,700 gallons of by-products were added daily to tank FA-129. The following chart shows the tank levels:
Level in inches Approximate gallons
------------------- -----------------------
August 16 3 80
17 11.5 585
18 11.5 585
19 10.5 511
20 16 945
23 8 342
24 8 342
25 10.5 511
26 8 342
27 8 342
30 8.5 375
31 15.5 903
September 1 25 1794
2 18.5 1167
3 10.5 511
The daily readings and the amount of by-product material produced were reconciled once a month pursuant to Upjohn policy. On September 3, 1982, the suspicious readings were "noticed" and no further by-products were emptied into that tank.
Later, the tank was emptied and a subsequent visual inspection revealed holes in the tank. The inside of the tank was corroded.
Upjohn believed that approximately 15,000 gallons of by-products had leaked from tank FA-129. The by-products moved into the soil beneath Upjohn's property as well as into the ground water below.
Upjohn monitored a nearby well belonging to the A.H. Robins Company. That well was not contaminated when it was built in 1981, but was found to be contaminated with carbon tetrachloride within weeks of the incident. Once the contamination was confirmed, Upjohn supplied water to the A.H. Robins Company as well as to the surrounding communities.
Subsequently, Upjohn developed a new technology which it used to remove carbon tetrachloride from its subsoil before it reached the ground water. This technology proved to be highly successful. Upjohn also used another process to decontaminate the tainted ground water.
Plaintiffs John Russell Butler and First State Insurance Company, issuing property policy GC-809000, are Upjohn's property insurers and have reimbursed Upjohn for some of its losses. Upjohn and its property insurers, as Upjohn subrogees, sued defendants, which are Upjohn's liability or excess liability insurers, claiming coverage under those policies.
Plaintiffs moved for summary disposition pursuant to MCR 2.116(C)(9) and (10). Almost all defendants then moved for summary disposition pursuant to MCR 2.116(C)(8) and (10). The circuit court held that the contamination was an occurrence under defendants' policies and that coverage was not precluded by the pollution exclusions contained therein. Moreover, the circuit court rejected Allstate's claim that property insurance was "other insurance" under Allstate's policy. The circuit court also held that Upjohn's cleanup costs were recoverable as damages under defendants' policies; however, the circuit court noted that defendants were not liable for damages to Upjohn's own property. Finally, the circuit court held that defendants, The Insurance Company of the State of Pennsylvania and First State Insurance Company, issuing excess liability policy number 916075, were not liable because the occurrence took place before September 30, 1982, the effective date of those policies.
A motion for summary disposition under MCR 2.116(C)(10) tests the factual support for a claim. Boyle v. Odette, 168 Mich.App. 737, 742, 425 N.W.2d 472 (1988). Summary disposition is appropriate under this subrule only if the court is satisfied that it is impossible for the nonmoving party's claim to be supported at trial because of a deficiency which cannot be overcome. The trial court must give the benefit of any reasonable doubt to the nonmoving party. Id. at 742-743, 425 N.W.2d 472. This Court is liberal in finding a genuine issue of material fact. Id. at 743, 425 N.W.2d 472. Nevertheless, where the opposing party fails to come forward with evidence, beyond its allegations or denials in the pleadings, to establish the existence of a material factual dispute, the motion is properly granted. Id.; MCR 2.116(G)(4).
Both Granite and Allstate claim that the circuit court erred when it held that there was no genuine issue of material fact that the leakage was an occurrence under their policies. Granite and Allstate...
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