|
COURT OF APPEALS DECISION DATED AND RELEASED September 12, 1996 |
NOTICE |
|
A party may file with the
Supreme Court a petition to review an adverse decision by the Court of
Appeals. See § 808.10 and
Rule 809.62, Stats. |
This opinion is subject to
further editing. If published, the
official version will appear in the bound volume of the Official Reports. |
No. 95-1334
STATE
OF WISCONSIN IN COURT OF
APPEALS
DISTRICT I
GENERAL CASUALTY
COMPANY OF WISCONSIN,
Plaintiff-Respondent,
v.
THE GETZEN COMPANY,
Defendant-Appellant,
SENTRY INSURANCE, a
mutual company,
NORTHBROOK PROPERTY
AND CASUALTY INSURANCE COMPANY,
NORTHBROOK NATIONAL
INSURANCE COMPANY,
THE AETNA CASUALTY
& SURETY COMPANY,
and CINCINNATI
INSURANCE COMPANY,
Defendants.
APPEAL from a judgment
of the circuit court for Milwaukee County:
WILLIAM D. GARDNER, Judge. Reversed
and cause remanded.
Before Wedemeyer, P.J.,
Fine, J, and Michael T. Sullivan, Reserve Judge.
PER CURIAM. The Getzen Company, a brass musical
instrument manufacturer and repairer, appeals from a summary judgment granted
in favor of General Casualty Company of Wisconsin, Getzen's general
comprehensive liability insurer.[1] General Casualty commenced a declaratory
judgment action requesting that the trial court find that General Casualty had
no duty to indemnify Getzen as a result of the Wisconsin Department of Natural
Resources's remediation orders in connection with alleged environmental
contamination on Getzen's property. The
trial court concluded as a matter of law that under the terms of the commercial
umbrella liability policies at issue in this case, General Casualty had “no duty
to defend the Getzen Company where an environmental clean-up was ordered by a
governmental agency.” We agree with
Getzen's argument that the trial court erred in concluding that the umbrella
policies precluded General Casualty's duty to indemnify Getzen. Accordingly, we reverse and remand the
matter to the trial court for further proceedings consistent with this opinion.
I.
Background.
Getzen allegedly
discharged hazardous waste at its Walworth County facility from approximately
1959 through 1983. In February 1990,
the Department of Natural Resources received an anonymous complaint concerning
the alleged hazardous waste disposal practiced at the site. Over the next two years, the Department
issued various notices to Getzen concerning Getzen's noncompliance with
regulations at the site.[2] A March 1992 Department order required
Getzen to close and remediate the site in accordance with Wisconsin hazardous
waste management regulations. Finally,
on August 14, 1992, the Department conditionally approved a closure plan for
the Getzen site.
General Casualty issued
various underlying general comprehensive liability insurance policies to Getzen
between 1978 and 1984. General Casualty
also issued to Getzen commercial umbrella liability policies that were in
effect from 1980 to 1984. Getzen first
notified General Casualty of the Department proceedings on February 13, 1992,
when Getzen's insurance agent forwarded a Notice of Incompleteness dated
October 29, 1991, from the Department to Getzen. The 1991 notice threatened further enforcement action if Getzen
did not immediately submit a closure plan in accordance with the Department
requirements. By letter dated March 17,
1992, General Casualty responded by saying that since no suit had been brought,
General Casualty's duty to defend had not been triggered. It also advised Getzen that further
investigation would be necessary to determine whether any of the insurance
policies covered the costs of complying with the Department's orders. In a letter dated April 16, 1992, Getzen
formally demanded that General Casualty provide a defense.
On May 5, 1993, General
Casualty filed a suit seeking a declaratory judgment that General Casualty had
no duty to defend Getzen or cover Getzen's costs arising from compliance with
the Department's orders. Getzen filed
an answer and a counterclaim alleging that, based on the insurance policies,
General Casualty had a duty to defend and indemnify Getzen; Getzen also alleged
breach of contract and bad faith on the part of General Casualty. Based on our supreme court's recent decision
in City of Edgerton v. General Casualty Co. of Wisconsin, 184
Wis.2d 750, 517 N.W.2d 463 (1994), the trial court granted General Casualty's
motion for summary judgment and ruled that General Casualty had no duty to
defend or indemnify Getzen. The trial
court also dismissed Getzen's counterclaim.
Getzen appeals from the judgment incorporating the trial court's rulings
on these issues.
II.
Analysis.
Getzen argues that the
trial court erred in its application of the City of Edgerton
decision to the umbrella liability policies in this case. Getzen further argues that the issue
presented in this appeal is limited solely to the “scope of coverage,” in other
words, General Casualty's “duty to indemnify” Getzen, that is provided in the umbrella
policies' coverage provisions and is broader than the policies' “duty to
defend” provisions. Getzen contends
that the trial court inappropriately focused on “both the defense and coverage
aspects of the Edgerton decision in denying Getzen ... coverage
under the Umbrella Policies,” because the dispositive policy language at issue
in the Edgerton decision “does not appear in the coverage
provision of the Umbrella Policies issued to Getzen.” We agree that umbrella policies coverage provisions are the
appropriate focus of this appeal and further that under the specific coverage
language of these policies City of Edgerton is not
controlling. Accordingly, the trial
court inappropriately granted summary judgment to General Casualty.
“The methodology for
reviewing summary judgment motions has been recited many times and need not be
repeated here.” Spic & Span,
Inc. v. Continental Casualty Co., Nos. 95-1572 & 95-1917, slip op.
at 5 (Wis. Ct. App. June 25, 1996). We
do note that our review of the trial court's summary judgment ruling is de
novo. Bay View Packing Co. v.
Taff, 198 Wis.2d 654, 673, 543 N.W.2d 522, 528 (Ct. App. 1995). Further, “[t]he interpretation of an
insurance policy presents a question of law that we review independently of the
trial court.” Spic & Span,
Inc., slip op. at 5.
The relevant coverage
language in the umbrella policies provides:
I. Coverage: The company hereby agrees, subject to the
limitations, terms and conditions hereinafter mentioned to indemnify the
Insured for all sums which the Insured shall be obligated to pay by reason of
the liability
(a) imposed upon the Insured by law, or
...
for ultimate net loss on account of:
...
(b) property damage
...
caused
by or arising out of each occurrence happening anywhere in the world, during
the policy period.[3]
Getzen
essentially argues that irrespective of the policies' duty to defend
provisions, General Casualty still has an obligation to indemnify Getzen under
the language of the above coverage provision.
We agree.
The “duty to defend”
provision provides that General Casualty will “defend any suit against the
Insured seeking damages on account of ... property damage ... even if any of
the allegations of the suit are groundless, false or fraudulent.” Under this language, General Casualty's
“duty to defend” is not triggered because, under City of Edgerton,
the Department's environmental remediation order does not constitute a “suit
... seeking damages.” See City
of Edgerton, 184 Wis.2d at 758, 517 N.W.2d at 468.
The coverage provisions
of the policy, however, are much broader than the “duty to defend”
provisions. The language provides that
General Casualty “agrees ... to indemnify [Getzen] for all sums which [Getzen]
shall be obligated to pay by reason of the liability ... imposed upon [Getzen]
by law.” Hence, the plain language of
the umbrella policies provide for indemnification beyond that triggered by
“suits ... seeking damages.” Further,
the Department's environmental remediation orders are clearly a “liability ...
imposed upon ... by law,” and thus fall within the coverage of the
policies. Weyerhaeuser Co. v.
Aetna Casualty & Sur. Co., 874 P.2d 142 (Wash. 1994), which also
involved an insurance claim for environmental contamination remediation, is
persuasive on this point. The policy at
issue provided indemnification to the assured “for all sums which the Assured
shall be obligated to pay by reason of the liability, (a) imposed upon the
Assured by law.” Id. at
145‑46. In a well-reasoned opinion,
the Washington Supreme Court determined that the provisions of the policy
covered property damage where the insured and the environmental agency
cooperated in a pollution cleanup effort.
Id. at 149‑50.
General Casualty
contends that the limited “duty to defend” provisions abort the broader duty to
indemnify provisions, because there can be no duty to indemnify in a drop-down
situation like this—absent a concomitant duty to defend. We disagree.
General Casualty argues
that the coverage and defense provisions must be read together as a unit. With this we agree, but we reject General
Casualty's overall analysis because a plain reading of both provisions makes it
evident that nothing in the duty to defend clause restricts the scope of
coverage clause. In reaching this
conclusion, we employ the maxim that the policy should be considered as a
whole, with effect given to all of its provisions. Grotelueschen v. American Fam. Mut. Ins. Co., 171
Wis.2d 437, 451, 492 N.W.2d 131, 136 (1992) (coverage will be found if the
policy terms provide).
Finally, General
Casualty argues that it may not be held to indemnify against an uncontemplated
risk. The unambiguous terms of the
umbrella policies implicate one of two situations: (1) when the underlying
policy applies to an occurrence but the damages exceed the limits of the
policy; and (2) when the underlying policy does not apply to the
occurrence and the terms of the insuring agreement have been met. General Casualty argues that here the
underlying insurance does not apply to the occurrence because, under City
of Edgerton, no coverage is afforded as a matter of law; that is, no
lawsuit was commenced. Logically,
General Casualty continues, one must look to the duty to defend provision to
determine whether the umbrella policies apply.
We disagree because the
duty to defend provision is entirely unrelated to General Casualty's duty of
coverage or indemnification. General
Casualty, however, has a right to participate in a defense because it has a duty
to indemnify Getzen, although it may have no duty to defend Getzen. See, e.g., Glatz v. General Accident,
Fire & Life Assurance Corp., 175 Wis. 42, 47-48, 183 N.W. 683,
685 (1921).
Accordingly, because
General Casualty has a duty to indemnify under the policy, summary judgment
should not have been granted. We
reverse and remand the matter to the trial court for further proceedings
consistent with this opinion.[4]
By the Court.—Judgment
reversed and cause remanded.
This opinion will not be
published. See Rule 809.23(1)(b)5, Stats.
[1] Several other insurance companies were joined as defendants, but each of these companies has settled with Getzen and, accordingly, are not parties to this appeal.
[2] In August 1990, the Department issued a notice to Getzen for noncompliance with hazardous waste management regulations. In approximately October 1990, the Department took samples of residue from the waste burn pile area at the site and, based on those results, issued a notice of violation requiring Getzen to stop burning in the burn pile area. In March 1991 the Department issued a notice of violation requiring Getzen to perform soil testing in the burn pile area and remediate existing contamination. In February 1992, the Department issued a notice of violation ordering Getzen to stop discharging sump water onto the ground.
[3]
The defense provision of the umbrella policy provides, in relevant part:
II.Defense, Settlement and
Supplementary Payments:
When Underlying Insurance Does
Not Apply to an Occurrence:
With respect to any occurrence
not covered by the underlying insurance listed in Item 3 of the Declarations,
or any other underlying insurance applicable to the insured, but covered by
this policy except for the amount specified in Item 4 of the Declarations, the
company will, in addition to the amount of the ultimate net loss payable:
(a) defend any
suit against the Insured seeking damages on account of personal injury,
property damage or advertising liability, even if any of the allegations of the
suit are groundless, false or fraudulent, and may make such investigation and
settlement of any claim or suit as it deems expedient;
(b) pay all
expenses incurred by the company, all costs taxed against the insured in any
suit defended by the company and all interest on the entire amount of any
judgment therein which accrues after entry of the judgment and before the
company has paid or tendered or deposited in court that part of the judgment
which does not exceed the limit of the company's liability thereon; ....