Wagner v. Milwaukee Mut. Ins. Co., 87-2144
| Decision Date | 28 June 1988 |
| Docket Number | No. 87-2144,87-2144 |
| Citation | 427 N.W.2d 854,145 Wis.2d 609 |
| Parties | Howard WAGNER, d/b/a Citgo Quick Mart, Plaintiff-Appellant, v. MILWAUKEE MUTUAL INSURANCE COMPANY, Defendant-Respondent. |
| Court | Wisconsin Court of Appeals |
Review Denied.
Paul J. Payant of Sommer, Olk & Schroeder, Antigo, for plaintiff-appellant.
David A. Piehler of Terwilliger, Wakeen, Piehler & Conway, S.C., Wausau, for defendant-respondent.
Before CANE, P.J., and LaROCQUE and MYSE, JJ.
Howard Wagner appeals a summary judgment dismissing his complaint and all causes of action against his insurer Milwaukee Mutual Insurance Company. Wagner contends that under the terms of a multiperil insurance policy issued to him by Milwaukee Mutual, he is entitled to recover the costs of locating a gasoline leak on his property and venting a municipal sewer line that the leaking gasoline had contaminated. The Department of Natural Resources charged these costs to Wagner pursuant to sec. 144.76(3), Stats. Because we conclude that such loss is covered under the insurance policy, we reverse and remand to the trial court for further proceedings consistent with this opinion.
While the underlying facts are not well-developed, the record discloses the following: Wagner owns a gasoline service station known as Citgo Quick Mart, located in the Village of Wittenberg. He had purchased a multiperil insurance policy covering this business from Milwaukee Mutual. This policy was in effect during the times relevant to this action. In February, 1981, a third party installed a canopy at the service station. During the installation, footings for the canopy were poured on top of pipes connecting the underground gasoline tanks to the service station pumps. This apparently cracked one of the pipes, causing gasoline to leak into the surrounding soil.
By June, 1984, gasoline odors were detected in private residences as well as the sanitary sewer line in the Village of Wittenberg. Complaints were made to the DNR, which then hired a company to determine the location of the leak. The company discovered that the gasoline was coming from a leak in a pipe located on Wagner's property, and that it was necessary to vent the gasoline from the sewer line. The total cost for locating the leak and venting the sewer was $7,593.39. Wagner was in turn billed for the cost of the clean-up pursuant to sec. 144.76(3) 1 and now seeks to recover those costs from Milwaukee Mutual.
Construction of an insurance policy presents a question of law that may be appropriately decided on summary judgment. Kennedy v. Washington Nat'l Ins. Co., 136 Wis.2d 425, 428, 401 N.W.2d 842, 844 (Ct.App.1987). This court will reverse a trial court's decision granting summary judgment only if the trial court incorrectly decided a legal issue or material facts were in dispute. Arnold v. Shawano County Agric. Soc'y, 111 Wis.2d 203, 209, 330 N.W.2d 773, 776 (1983). Because the parties have agreed that the basic facts are undisputed, this court need only address whether the trial court properly resolved the question of law regarding coverage. 2 We are not bound by the trial court's decision on questions of law. Backhaus v. Krueger, 126 Wis.2d 178, 180, 376 N.W.2d 377, 378 (Ct.App.1985).
Milwaukee Mutual concedes that the damage to the pipe itself is covered under the terms of its policy, but disputes the claim that the cost of locating and cleaning up the gasoline leak is also an insured loss. While various issues were raised in the briefs, during oral argument both parties agreed that this case can be resolved by determining whether the loss arising from the cost of cleaning up the gasoline in the sewer was covered property damage as defined in the liability portion of the insurance policy 3 and, if so, whether such losses are excluded by the policy's pollution exclusion clause.
Section II of the insurance policy insures against liability for property damage to the property of third parties. The policy defines property damage as:
(1) physical injury to or destruction of tangible property which occurs during the policy period, including the loss of use thereof at any time resulting therefrom, or
(2) loss of use of tangible property which has not been physically injured or destroyed provided such loss of use is caused by an occurrence during the policy period.
Milwaukee Mutual argues that the presence of gasoline in increasing amounts in the sewer line is not physical injury or destruction of tangible property under subpara. (1), and that while unpleasant odors may have been emitted from the sewer, the sewers were never closed down and consequently there was no loss of use of the sewer line during the policy period under subpara. (2). Because we conclude that there was property damage as defined in subpara. (2), we do not need to address whether the presence of the gasoline in the sewer was a physical injury to tangible property under subpara. (1).
Milwaukee Mutual argues that for the loss of use of tangible property to meet the definition of property damage in subpara. (2) the property must be rendered totally and completely unusable. The language of the policy does not so provide. Where policy terms are unambiguous, this court merely applies those terms rather than engaging in construction. Herwig v. Enerson & Eggen, 98 Wis.2d 38, 40, 295 N.W.2d 201, 203 (Ct.App.1980).
The language of subpara. (2) provides that even when tangible property has not been physically injured, there may nonetheless be property damage in the form of loss of use "provided such loss of use is caused by an occurrence during the policy period." Loss of use does not require abandonment of the property for any use, nor total and complete loss of use. Rather, the policy merely specifies that there must be a loss of use caused by an occurrence during the policy period. No one argues that the rupture of the pipe was not an occurrence as that term is defined in the policy or that it did not take place during the policy period.
The presence of gasoline fumes and liquid in the sewer created a dangerous condition, susceptible to either fire or explosion. This condition affected the use and safety of the sewer line and could not be ignored. Because the sewer lines could not be used without returning them to an uncontaminated state, the contamination constitutes a loss of use under the policy and the clean-up cost is a covered loss.
We next address whether the policy's pollution exclusion clause applies so as to deny coverage. The pollution exclusion clause excludes liability coverage for:
[B]odily injury or property damage arising out of the discharge, dispersal, release, or escape of smoke, vapors, soot, fumes, acids, alkalis, toxic chemicals, liquids or gases, waste materials or other irritants, contaminants or pollutants into or upon land, the atmosphere or any water course or body of water; but this exclusion does not apply if such discharge, dispersal, release or escape is sudden and accidental. (Emphasis added.)
The discharge of gasoline into the ground and sewer system is clearly the discharge of a pollutant as described in this clause. Therefore, the dispositive issue becomes whether the discharge was "sudden and accidental."
Milwaukee Mutual does not claim that the discharge was not accidental. However,...
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